Bribery Act checklist
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The Bribery Act updates the existing UK laws on bribery offences and also creates some new ones, including the strict liability corporate offence of ‘failing to prevent bribery’. Helpfully, ...

The Bribery Act updates the existing UK laws on bribery offences and also creates some new ones, including the strict liability corporate offence of ‘failing to prevent bribery’. Helpfully, however, the Government’s guidance published in support of the Act recommends certain risk-based procedures that commercial organisations should put in place to avoid being caught out by the new corporate offence.

Bribery occurs when someone offers, seeks or accepts a payment, gift or favour that influences a business outcome improperly. Designed to reform the criminal law of bribery, the 2010 Act covers the offences of bribing another person and accepting a bribe. It also expands the law to create a new offence for commercial organisations of failing to prevent bribery by associated persons acting on the organisation’s behalf anywhere in the world.

Get it wrong and the penalties are severe. Organisations prosecuted for the new corporate offence which have failed to implement a programme designed to prevent bribery could be hit with an unlimited fine and serious reputational damage. Directors, senior managers, the company secretary or other similar officers at these organisations can also face a 10-year prison sentence and/or an unlimited fine for offences under the Act. With the Act now in force, it is crucial for businesses to avoid falling foul of the new legislation.

Wragge & Co’s experts are on hand to guide organisations through the new rules and to advise on how best to mitigate the risks posed by them. In this guide they provide answers to the burning Bribery Act questions, plus useful points to consider when assessing risk. Finally, for those with an anti-bribery policy now in place, take a look at our handy checklist to identify any potential loopholes.

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Bribery Act checklist Document Transcript

  • 1. get your hands off Stay out of trouble with this essential Bribery Act checklist.BriBery act 2010 checklist
  • 2. AFTER MONTHS OF SPECULATION AND THOUSANDS OF COLUMN INCHES, THE BRIBERY ACT 2010 HAS ARRIVED. OVERHAULING EXISTING LEGISLATION, THE NEW ACT BRINGS SIGNIFICANT CHANGES. TO HELP ORGANISATIONS SEE THE WOOD FROM THE TREES, WRAGGE & CO’S SPECIALISTS HAVE PRODUCED AN ESSENTIAL CHECKLIST.the BriBery act 2010you can’t say youhaven’t Been warned So, what does the Bribery Act do? As a major new piece of legislation, it updates the existing laws on bribery offences and also creates some new ones, including the strict liability corporate offence of ‘failing to prevent bribery’. Helpfully, however, the Government’s guidance published in support of the Act recommends certain risk-based procedures that commercial organisations should put in place to avoid being caught out by the new corporate offence. Bribery occurs when someone offers, seeks or accepts a payment, gift or favour that influences a business outcome improperly. Designed to reform the criminal law of bribery, the new Act covers the offences of bribing another person and accepting a bribe. It also expands the law to create a new offence for commercial organisations of failing to prevent bribery by associated persons acting on the organisation’s behalf anywhere in the world. Get it wrong and the penalties are severe. Organisations prosecuted for the new corporate offence which have failed to implement a programme designed to prevent bribery could be hit with an unlimited fine and serious reputational damage. Directors, senior managers, the company secretary or other similar officers at these organisations can also face a 10-year prison sentence and/or an unlimited fine for offences under the Act. With the Act now in force, it is crucial for businesses to avoid falling foul of the new legislation. Wragge & Co’s experts are on hand to guide organisations through the new rules and to advise on how best to mitigate the risks posed by them.If you wish to discuss in more detail the Here, they provide answers to the burning Bribery Act questions, plus useful points to considerBribery Act 2010 and the implications to when assessing risk. Finally, for those with an anti-bribery policy now in place, take a look at our handy checklist to identify any potential loopholes.your business please contact: About Wragge & Co tom ellis • Wragge & Co is a UK-headquartered international law firm providing a full range of legal Partner services to clients worldwide. • With 125 partners operating from offices in Birmingham, Brussels, Guangzhou, London and Munich, plus affiliated offices in Abu Dhabi and Paris, Wragge & Co has the resource +44 (0)870 730 2832 tom_ellis@wragge.com and expertise to handle the largest instructions. • The firm provides a full service to clients worldwide, including hundreds of public sector organisations and thousands of major companies. • Wragge & Cos dispute resolution practice is one of the largest of its kind in the UK. teresa edwards Associate • 185 dispute resolution lawyers include experts in contract and commercial, construction, mediation and arbitration, regulatory litigation, IT, professional negligence, insurance and volume debt recovery. Elsewhere in the firm are teams specialising in dispute resolution for employment, pensions, +44 (0)121 685 3854 intellectual property (IP) and real estate. teresa_edwards@wragge.com
  • 3. FREqUENTLY ASKED qUESTIONSWhat does the Act do? What is the new corporate offence?The Act provides four bribery offences: the The Act introduces a new, strict liabilityoffering or paying of a bribe, the requesting offence for any commercial organisation ofor receiving of a bribe, bribing a foreign failing to prevent associated persons frompublic official, and a corporate offence of paying bribes anywhere in the world withfailing to prevent associated persons from the intention of obtaining or retainingpaying bribes. business or a business advantage for that commercial organisation.This is a very wide- ranging offence and could present realWhy is this being done now? difficulties for those who operate in high-riskThe Act represents a long overdue overhaul jurisdictions in which bribery and corruptionand consolidation of the UKs bribery are endemic.legislation (which previously dated from theturn of the last century).The timing of theAct is widely rumoured to stem from Is there a defence?international political pressure being brought There is a defence to the corporate offence.on the UK Government by the United As explained in this document, it is aStates as a reaction to some high-profile defence for a commercial organisation toinquiries which have been abandoned, such prove that it has in place adequateas that into BAe Systems. It is also a reaction procedures designed to prevent bribery byto the difficulty experienced by the Serious associated persons.Fraud Office in securing a conviction againstcompanies suspected of paying bribes. How does this compare with the US Foreign Corrupt Practices Act?How is bribery defined? Where the FCPA accepts that facilitationBribery is given a wide definition in the Act payments (small bribes requested by someand involves the promise, giving, request, foreign officials intended to “grease theacceptance or receipt of a financial or other wheels” for the performance of officialadvantage to induce or reward a person functions) are a part of doing business inwith respect to the improper performance some parts of the world and thereforeof a relevant function or activity.This is excludes them from the scope of the USperformance that breaches the expectations legislation, the Act considers them to beof good faith or impartiality, bribes and therefore makes them illegal.Theor breaches a position of trust. Act arguably imposes some of the toughest anti-bribery laws anywhere in the world.Is any of this new?The standard bribery offences of paying or When did the Act come into force?receiving a bribe have long been a criminal Friday, 1 July 2011.offence and the Act simply serves to codifythose offences in a clear, albeit broad, Does it have retrospective effect?manner. However, the two new offences No.The act is not retrospective, butintroduced by the Act are the specific applies to events which take place fromoffence of bribing a foreign public official and 1 July 2011 onwards.the new strict liability corporate offence.
  • 4. anti-BriBery policy checklist The policy should open with a clear and unequivocal statement of the company’s anti-bribery stance. Zero tolerance is the recommended standard. The policy should contain a clear definition of bribery (in compliance with the Act and any other relevant anti-bribery legislation to which the company or its associates may be subject). The scope of the policy should extend to all internal and external relationships and include all group entitiesIntroduction over which the company has control. The policy should refer to the risk assessment undertaken by the company and identify the areas of the policy which are intended to address particular identified risks. The policy should be a public document and be made available on the company’s website or on demand from the company. The policy should require that high-level training on the Bribery Act and the policy be rolled out to all employees. The policy should provide for bespoke training to be rolled out to key/senior and/or high-risk employees. The policy should provide that training on the Bribery Act and the policy be given to material overseas contractors/agents etc.Training policy The policy should require that a record of the training given be maintained and reviewed to ensure that everyone has the most up-to-date training. The policy should establish a process by which refresher training is provided where necessary and, in any event, following any new risk assessment or changes to the policy. The policy should put in place relevant thresholds with respect to: (a) The value of hospitality offered/received; and (b) quotas (e.g. to ensure that individuals do not offer or receive disproportionate levels of hospitality), pursuant to which the hospitality is either permitted, or permitted subject to necessary authorisations, or prohibited. The policy should set out clearly the levels of authorisation which are required, depending on theCorporate hospitality value/recipient/other relevant considerations.policy The policy should put in place a reporting requirement for all hospitality given and received, and require that an appropriate register of hospitality (given and received) should be maintained. The policy should make a regular review of the staff ’s adherence to the policy a mandatory requirement (perhaps in conjunction with staff performance reviews). The policy should make it a disciplinary offence for staff to fail to comply with the policy. The policy should put in place relevant thresholds with respect to: (a) The value of donations; (b) quotas (e.g. to oversee the cumulative effect of donations). pursuant to which the donation is either permitted, or permitted subject to necessary authorisations, or prohibited.Charitable/political The policy should set out clearly the levels of authorisation which are required, depending on thedonations policy value/recipient/other relevant considerations. The policy should put in place a reporting requirement for all charitable/political donations given, and an appropriate register of charitable/political donations should be maintained. The policy should make a regular review of the staff ’s adherence to the policy a mandatory requirement. The policy should make it a disciplinary offence for staff to fail to adhere to the policy. There should be a policy that no facilitation payments be made by or on behalf of the company (either to foreign public officials or to any other third party). The policy should ensure that bespoke training is provided to anyone potentially exposed to demands forFacilitation payments facilitation payments.policy The policy should put in place processes for the reporting and recording of any demands for facilitation payments and any payments made. If appropriate, the policy should require that a bespoke risk assessment be done for any relevant jurisdiction in which facilitation payments are regularly demanded.
  • 5. These checklists provide a number of genericconsiderations which are intended to assist commercialorganisations with the process of assessing their riskprofile and preparing an appropriate anti-bribery policy.Each organisation will have its own unique risks and thesuggestions set out here will not necessarily deal witheach and every issue which an organisation may face. The policy should require that financial books and records be subject to regular and spot-check audits to identify any bribery-related anomalies. The policy should establish specific levels of authorisation for high-risk/value transactions (to include any risk areas identified in the risk assessment). Financial controls policy The policy should set out clearly the necessary authorisation process for expenses claims, including the implementation of threshold levels and/or special requirements for expenses which relate to high-risk markets/jurisdictions/teams/individuals. The policy should provide for a robust record-keeping policy. The policy should make it a requirement that due diligence be undertaken on (at least) all material overseas contractors (to include past conduct, reputation of principals and anti-bribery credentials). The policy should make it a requirement that overseas contractors/agents and staff who operate overseas are Overseas business policy given bespoke training on bribery risks. The policy should make it mandatory for contractual anti-bribery provisions to be incorporated in all material overseas relationships (to include termination rights for a breach thereof). The policy should require that staff confirm (on a regular basis and after any policy change or material development) that they understand and will adhere to the policy. The policy should be incorporated by reference into employee handbooks. Staff/employee policy The policy should clearly explain that it is a disciplinary offence for an employee to fail to comply with any aspect of the policy. Sanctions for breach should be clearly identified and communicated to all staff. The policy should establish confidential whistle blowing/reporting channels to permit staff to report any issues or grounds for suspicion. The policy should require that contractual anti-bribery provisions be incorporated in all material supplier, sub- contractor and agency contracts (to include termination rights for a breach thereof). Supplier/sub-contractor/ The policy should set out a requirement for a minimum level of due diligence to be undertaken into suppliers, agent policy sub-contractors and agents before the company enters into any form of binding relationship with them. The policy should make it a mandatory requirement for suppliers, sub-contractors and agents to confirm that they understand and will adhere to the policy. The policy should set out the requirements for an on-going risk assessment programme. The policy should require that the board consider the risk assessment programme on a regular basis. Risk assessment The policy should set out the events on the occurrence of which a mandatory review of the risk assessment must be undertaken (e.g. discovery of an offence, move to new business sector/country, material growth, significant acquisition or merger, increased market risk). The policy must put in place a system for the regular monitoring of compliance of high-risk individuals. The policy should provide that spot-check audits be undertaken to review compliance with the policy. The policy should provide a programme for checking that its requirements have been implemented effectively and Monitoring and are being followed. implementation The policy should make it clear that the Board has responsibility for overseeing the implementation of the anti- bribery programme and that the programme will be a regular agenda item for board meetings. The policy should set out a clear ‘ownership’ structure for the anti-bribery programme (e.g. compliance function, board committee, legal team). The policy should set out a specific action plan where a bribery offence or suspicious circumstances are discovered. The policy should require the immediate involvement from any internal legal function in the investigation and, if appropriate, external legal counsel. Reaction plan The policy should require that a thorough investigation be undertaken as quickly as possible and that the conclusions from that investigation be provided to the board. The policy should set out clearly the sanctions which are to be applied in response to bribery-related incidents.
  • 6. risk assessment checklist Where is the organisation incorporated? Is it part of a group of companies?Organisation Where is overall management located? What is the global spread of the organisation’s subsidiaries and/or parents? In what markets/business sectors does the organisation operate? Is part of its business undertaken in the UK?The business Does the business involve import/export? Are any of these markets/business sectors known to have general or specific bribery risks? What (if anything) has been done to mitigate these risks? Are there any high-value/particularly significant transactions that the organisation enters into on a regular/irregular basis?Transactions Do any transactions involve intermediaries, agents, representatives, consortia, JV partners? Does the organisation depend on a few high-value transactions or a mix of transactions? In which countries does the organisation operate its business? Does the organisation have any overseas subsidiaries or parent companies? Does the organisation operate its business overseas through agents or representatives?The locations Are any jurisdictions in which the organisation operates known to be high-risk jurisdictions for bribery and corruption? What (if anything) has been done to mitigate or deal with these risks? Who is responsible for overseeing compliance within the organisation? Is management at a group or company or country level?The management Does management have oversight of all things done on behalf of the organisation or is oversight delegated to committees or local management? Is there a clear and coherent anti-bribery message coming from management? Does the organisation use agents or representatives for sales/promotional activities? Does the organisation have any joint venture partners?The contractors/ Does the organisation impose an anti-bribery policy on its contractual partners?agents/partners What (if any) due diligence has been undertaken into the organisation’s contractual partners? What are the sanctions (if any) against a contractual partner for breach of a bribery policy? Has the organisation faced any bribery incidents in the past?Known bribery risks If so, where, when and by whom? What has been done to prevent such incidents happening again – and has this been successful? Does the organisation have a clear anti-bribery message? What general compliance policies does the company already have in place? Does it have a specific policy regarding bribery? Is there a policy on corporate hospitality/promotional expense/charitable donation/sponsorship?The policies Have the relevant policies been implemented and enforced? How are the relevant policies communicated internally or externally? Are staff required to acknowledge that they have read, understood and will adhere to the policy? What disciplinary sanctions are there for breach of policy? Have they been applied consistently?
  • 7. These checklists provide a number of genericconsiderations which are intended to assist commercialorganisations with the process of assessing their riskprofile and preparing an appropriate anti-bribery policy.Each organisation will have its own unique risks and thesuggestions set out here will not necessarily deal witheach and every issue which an organisation may face. What training has been given to staff on bribery? What training is planned? Training Is any bespoke training intended for high-risk individuals? Is bribery training compulsory for all staff or just some? What is the organisation’s budget for corporate hospitality? Does the company allow ‘off book’ accounting? Have there been any instances in the past of ‘off book’ accounting? Financial controls Has the organisation ever accounted or budgeted for facilitation payments? What financial controls are imposed on expenses (e.g. must they be documented/explained)? Are regular audits/spot checks undertaken to identify anomalies/suspicious transactions? How and to whom are anomalies reported? Does the organisation interact with any domestic public officials in its business? Interaction with Does the organisation need any public licences to operate its business? government/public Does the organisation do any public sector contract work? authorities (UK) Are staff who come into contact with public officials given any particular training? Does the organisation interact with any foreign public officials in its business? Interaction with Does the organisation export anything to or import from foreign countries? government/public Does the organisation need any public licences to operate its business in foreign countries? authorities (foreign) Does the organisation do any public sector contract work in foreign countries? Are staff who come into contact with foreign public officials given any particular training? Does the organisation have a policy on corporate hospitality/promotional expense? Is there a reporting requirement for hospitality received? Is there a financial level at which hospitality must be refused by staff? Corporate Does the organisation impose quotas on the value of hospitality which can be given to a particular hospitality/promotional person/entity/organisation? expense policy Is an authorisation process required for either the receipt or the giving of hospitality? How much does the company spend on hospitality? Are there any staff who receive a disproportionate amount of hospitality compared with their equivalent colleagues? Staff - remuneration Do any members of staff have their remuneration/bonuses linked with high-value or public contracts? and bonuses Do any members of staff have a level of responsibility/influence that is disproportionate to their salary? Who has prepared this risk assessment? Where has the information contained in this risk assessment come from? Risk assessment When was this risk assessment prepared? When will it next be reviewed/updated? What are the triggers for an unscheduled review?
  • 8. t +44 (0) 870 903 1000f +44 (0) 870 904 1099mail@wragge.comwww.wragge.com