The Bribery Act was scheduled for implementation in April 2011. That was predicated on publication of guidance to UK businesses on how to prevent bribery taking place in February. That guidance has been delayed, creating a knock on delay of the implementation of the Act itself. There has been a great deal of uninformed comment about the reason for the delay, including the suggestion in some quarters that the Act itself will be altered, or watered down, or even scrapped. None of these things will happen. The Bribery Act, because it is a statute, can only be altered by another statute. More importantly the Government is obliged by International Treaty to enact effective anti bribery legislation, and the Bribery Act is it. It is not going away.
What is of considerable interest, and probably of considerable importance, is that the reason for the delay is the drafting of the guidance. Under s9 of the Act, the Secretary of State must publish guidance about procedures to be put in place to prevent bribery. Those are the procedures that provide a defence to a company if a person or entity associated with that company bribes to win business for it. If a company is presented with the fact that there has been bribery on its behalf, whether it knew about it or not, it may escape conviction if it can show on the balance of probabilities that it had in place adequate procedures which were designed to prevent bribery. The fact that bribery takes place does not automatically mean that the procedures were not adequate, but their lack of effectiveness is likely to be part of the consideration of whether the procedures were adequate or not.
The first draft of the guidelines was what was described as “principle based”. That meant there was a description of what adequate procedures should look like, but not a list of what would or would not be regarded as adequate. The principle based guidance set out that for procedures to be adequate they had to be based on risk assessment, on due diligence into commercial partners, they had to be clear, practical and effective, they required constant monitoring and review, and, above all, had be led from the top. There has been enormous pressure from bodies such as the CBI, and other interest based lobbying groups, complaining that much more is needed than general expressions of principle which do little to assist an individual business trying to implement Bribery Act compliance in its own individual market and trading circumstances.
It seems likely that the delay in producing the draft guidance is because there may be some movement away from purely principle based guidance to something more practical. Which would be very much welcomed, but will need very careful scrutiny so that its effect and authority is clear and easy to understand. That guidance is now expected in May to enable implementation of the Act in, probably, September. When that guidance is published we will offer further insight and advice in this newsletter on how to avoid the traps for the
Dan Stowers, Partner