Unlimited fines and 10 years’ imprisonment possible for contravening Bribery Act
UK businesses face tough penalties if they attempt to bribe overseas officials following a major overhaul of anti-corruption laws.
The Bribery Act 2010, which received Royal Assent last week, increases penalties for bribery and introduces new offences of bribery of foreign public officials and corporate failure to prevent bribery. Companies are required to have “adequate processes” in place to prevent such attempts.
Contravention could lead to up to 10 years in prison or unlimited fines. The corporate offence of failure to prevent bribery is punishable by an unlimited fine.
The Act is due to come into force in stages later this year.
Will Kenyon, partner, PricewaterhouseCoopers LLP, says: “UK companies have a new set of risks to navigate with the introduction of this legislation.
“The Act introduces a new crime of ‘failure to prevent’ bribery which means that companies unable to demonstrate that they have implemented ‘adequate procedures’ to prevent corrupt practices within their ranks or by third parties on their behalf could be exposed to unlimited fines as well as other collateral consequences, such as debarment from government business.”
The chances of detection and successful prosecution are increasing due to greater cross-border collaboration between international enforcement agencies, he says.
“Many companies will need to review how they behave to avoid being caught by the Act. It is important to remember that, from an organisation’s point of view, bribery is a lot more than just a legal issue.
“It is driven by law but the real challenges are for management—implementing and maintaining the right processes, controls, governance and culture and encouraging the right values and behaviours. All companies should review their risk profile and anti-bribery programmes.”
John Smart, head of Ernst & Young’s fraud investigation dispute services team, says all UK businesses needed to take action against corruption “from the Board to the shop floor”.
“Bribery and corruption risk doesn’t only come from within, business needs to ask what is being done in its name,” he says.
“Agents, consultants, distributors, joint ventures and new acquisitions create exposures which can be difficult to assess but these are precisely the areas where the risk can be greatest. Organisations need to look carefully at the due diligence they carry out on third parties who act on their behalf.”
