CORPORATE COMPLIANCE IN THE UK: NAVIGATING LEGAL REQUIREMENTS – PART 2

29 Sep 2023, 42 mins ago

UK Bribery Act 2010: Anti-Bribery & Corruption Regulations in the UK

The UK’s bribery laws are widely considered to be among the most stringent and comprehensive anti-corruption regulations in the world. Notably, the UK has made significant strides in recent years to enhance the effectiveness of combating bribery and corruption, both within public and private domains. This blog is the second in a series (following our first blog on anti-money laundering compliance linked here) delving into various aspects of corporate compliance and offering actionable strategies to help ensure that your company remains in full alignment with the current legislation in force.

The UK Bribery Act 2010 (UKBA)

The UK Bribery Act 2010 (UKBA) came into force in 2011, introducing a robust framework aimed at preventing and prosecuting bribery and corruption offences. Companies operating in the UK should be aware of key aspects of the UKBA and ensure that corresponding anti-bribery and corruption (ABC) policies are implemented.

What is bribery?

Bribery is the act of giving or receiving an improper benefit (financial or otherwise) in order to influence decisions and/or reward illicit actions, usually for personal gain or advantage.

UKBA Main Offences

The UKBA outlines four main offences:

1. Offering or giving bribes (section 1 UKBA)

Active Bribery involves offering, promising, or giving bribes. This provision applies to individuals and companies and covers both public and private sectors.

2. Requesting or receiving bribes (section 2 UKBA)

Passive Bribery involves requesting, accepting, or receiving bribes by individuals. Similarly to Section 1, this provision applies broadly.

3. Bribing a foreign public official (section 6 UKBA)

This provision refers to bribery involving individuals who hold public office in foreign countries.

4. Failure by a commercial organisation to prevent bribery (section 7 UKBA)

Beyond addressing individual wrongdoing, the UKBA introduced a corporate offence of failure to prevent bribery; under this provision, companies can be held criminally responsible for bribery committed by their employees and/or agents, unless they can demonstrate that they had “adequate procedures” in place to prevent such conduct.

Defence against corporate liability under Section 7 UKBA

“Adequate procedures” can serve as a defence against corporate liability under section 7 of the UKBA. These procedures refer to the measures and controls that organisations are expected to have in place as part of their bribery and corruption prevention efforts. This means that the onus is on companies to demonstrate that they have taken reasonable steps to discourage involvement in such illegal activities. The UK Ministry of Justice has published official guidance on what constitutes “adequate procedures” to assist organisations in implementing effective ABC measures.

To successfully rely on this defence, the procedures in question must meet certain criteria:

  • Proportionality: the procedures must be proportionate to the bribery risks each organisation faces. What is considered “adequate” can vary depending on the size, nature, and complexity of the organisation. Smaller companies may have simpler procedures, while larger multinational corporations may require more extensive and sophisticated anti-bribery programmes. The key is to tailor these procedures to the organisation’s specific risks and circumstances and to demonstrate a genuine commitment to preventing bribery and corruption.
  • Effective implementation: the procedures must be effectively implemented and enforced (i.e., practiced and followed) throughout the organisation.
  • Top-level commitment: active involvement from senior management and leadership personnel should be visible and communicated throughout the organisation.
  • Due diligence: adequate procedures include conducting due diligence (i.e., assessing integrity, reputation, etc.) on associated persons such as agents, suppliers, subsidiaries and other third parties, to ensure that they are not involved in corrupt activities.
  • Training: companies should provide regular ABC training to employees at all levels and ensure that staff members are aware of all communication channels for reporting concerns.  As part of ABC training, firms should address the issue of gifts and entertainment. Gifts and entertainment are often part of the business culture, and it can be difficult for staff to know what is appropriate and what is not. As such, firms should seek to prevent the giving or receiving of gifts, hospitality and/or paying of expenses where it might influence (or be perceived to influence) a business decision.
  • Enforcement: a clear and consistent approach in the enforcement of ABC policies is needed, including the scope of disciplinary actions for breaches of said policies.
  • Regular review: company policies and procedures on ABC should be regularly reviewed and updated to ensure they are adapted to changing circumstances and emerging risks. Apart from ensuring that compliance measures remain adequate, regular reviews also help to showcase an organisation’s consistent intention of tackling bribery and corruption.

UKBA Extraterritorial Reach

Another noteworthy aspect of the UKBA is its wide jurisdictional reach, allowing it to apply not only to offences committed within the UK, but also to bribery that occurs abroad, as long as the offender has a close connection to the UK (including on the basis that the individual is a UK national or resident). This extraterritorial application underscores the UKBA’s commitment to combating international bribery and corruption.

Individuals and companies operating within the UK, as well as foreign companies with a connection to the UK (i.e., an office in the UK), must be aware of their obligations under this legislation. Given the complexity and expansive reach of the UKBA, consistent attention is required to ensure the implementation and maintenance of effective ABC compliance measures. Engaging legal professionals with expertise in ABC compliance can greatly assist your efforts.

At Gherson, our specialist financial crime lawyers can provide tailored advice catered to your specific industry. We can help you prepare, implement and maintain adequate compliance measures; this includes providing firm-wide training and assisting with the establishment, review, and revision of policies and procedures that align with your specific needs.

How Gherson can assist

Gherson’s regulatory, white-collar and investigations team are highly experienced in providing assistance, advice and guidance on how you can successfully navigate and adhere to legal requirements regarding corporate compliance. This includes providing a comprehensive and unparalleled range of regulatory and compliance services to prospective customers.

If you have any questions arising from this blog, please do not hesitate to contact us for advice, send us an e-mail, or, alternatively, follow us on TwitterFacebookInstagram, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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