Bribery Act to come into force on 1 July 2011

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31 March 2011
Following delays due to heavy criticism from British business, the Ministry of Justice has published Guidance on the "adequate procedures" that all commercial organisations will need to put in place in order to protect themselves against committing the controversial "corporate offence" under Section 7 of the Bribery Act 2010.

The Guidance is accompanied by a Quick Start Guide which is designed to provide clarification on some of the key questions asked by smaller British businesses following publication of the draft guidance in September 2010.

The Guidance, together with the Quick Start Guide, are intended to provide a more practical and accessible guide to adequate procedures. Notable improvements over the draft guidance include:

1) Proportionality - Introduction of a new Principle 1, being that of "Proportionality", which expressly recognises that whilst some action will be required by all organisations, an elaborate risk analysis and detailed anti-corruption policies will not always be necessary.

2) Gifts and hospitality - Confirmation that bona fide gifts and hospitality (e.g. Wimbledon or the Grand Prix) which are proportionate, reasonable and which seek to improve business relations are not intended to be criminalised by the Act. In fact, the Guidance recognises that the norms applying to a particular industry sector may be taken into account in assessing whether the gifts and/or hospitality constitute a bribe.

3) Supply chains - Confirmation that an organisation must carry out due diligence on the person that performs services for it, or on its behalf, but that due diligence on persons further down the supply chain will not always be necessary.

4) Charitable bodies - Clarification that charitable and educational bodies will be caught by the Act so long as they are incorporated or are partnerships which engage in commercial activities, irrespective of the purpose for which profits are made.

5) Prosecution - Confirmation that prosecutions will only be brought where there is sufficient evidence and where there is a public interest in doing so.

The Act is now due to come into force on 1 July 2011.

Businesses that have not yet taken steps to comply with the Act will therefore need to act quickly to ensure that they have adequate procedures in place. Such actions should be proportionate and should include a risk assessment, top level anti-corruption commitment, appropriate policies and procedures, and ongoing monitoring and review.

If you would like any further information, please contact Thomas Webb on +44 (0)117 307 6976 or +44 (0)7794 030 898 or email him.

For questions about the Bribery Act 2010 please contact any member of our Bribery Act team.

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