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Bribery Act 2010

Protect your organisation by acting now


Released april 2010
Introduction

The Bribery Act 2010 gained Royal Assent on 8 April 2010 and represents the most significant
change in the UK government’s approach to tackling bribery and corruption for over 100 years.
The Bribery Act 2010 replaces outdated legislation, bringing the UK in line with the OECD Anti-
Bribery Convention and aims to make the UK a better place for conducting business.


The primary focus for companies is the new offence of failure by a commercial organisa-
tion to prevent bribery. All offences carry a maximum prison sentence of 10 years, with the
exception of the offence relating to failure to prevent bribery, which carries an unlimited fine.
Where a director is convicted of bribery, they may also be disqualified from holding a director
position for up to 15 years.


The defence for a company is to be able to demonstrate that adequate procedures are in
place to prevent bribery. This puts companies’ operational procedures under the spotlight
and businesses may want to consider on a risksensitive basis what processes and controls
are implemented to mitigate bribery and corruption within their firm.


Despite a spate of recent bribery and corruption cases both in the UK and overseas, many
companies are unprepared for the Bribery Act 2010 and need to act on this as the highest
priority.



Key Influencers

Transparency International                        Serious Fraud Office
www.transparency.org.uk                           www.sfo.gov.uk
Organisation for Economic Co-operation            Ministry of Justice
and Development (OECD)                            www.justice.gov.uk
www.oecd.org                                      BIS: Department for Business, Innovation
United Nations Convention                         and Skills
www.unodc.org                                     www.bis.gov.uk
US Department of Justice
www.justice.gov




                                                LexisNexis® Bribery Act 2010
Bribery Act 2010

The Bribery Act reforms the criminal law to provide a new, modern and comprehensive
scheme of bribery offences that will enable courts and prosecutors to respond more ef-
fectively to bribery at home or abroad.


The Act will:
•	 provide a more effective legal framework to combat bribery in the public or private sectors
•	 replace the fragmented and complex offences at common law and in the Prevention of
  Corruption Acts 1889-1916
•	 create two general offences covering the offering, promising or giving of an advantage, and
  requesting, agreeing to receive or accepting of an advantage
•	 create a discrete offence of bribery of a foreign public official
•	 create a new offence of failure by a commercial organisation to prevent a bribe being paid
  for or on its behalf (it will be a defence if the organisation has adequate procedures in
  place to prevent bribery)
•	 require the Secretary of State to publish guidance about procedures that relevant com-
  mercial organisations can put in place to prevent bribery on their behalf
•	 help tackle the threat that bribery poses to economic progress and development around
  the world.


The Bill was published in draft on 25 March 2009 for pre-legislative scrutiny by a Joint Com-
mittee of both Houses of Parliament. The Bill received Royal Assent on 8 April 2010.


Source: Ministry of Justice



Penalties

Committing an offence under the Bribery Act 2010 can result in severe penalties.


An individual guilty of bribing another person, receiving a bribe or found to be bribing a foreign
official faces a maximum prison sentence of 10 years and/or an unlimited fine.


A company found guilty of failing to prevent bribery will be subject to an unlimited fine. Direc-
tors and senior executives will also be personally liable if it is found that they were directly
associated with an offence committed by their company. Where a director is convicted of
bribery, they may also be disqualified from holding a director position for up to 15 years.


Companies may also find themselves debarred from EU and US procurement lists.


The defence for a company is being able to demonstrate that adequate procedures are in
place to prevent bribery.




                                                  LexisNexis® Bribery Act 2010
Geographic reach of the Bribery Act 2010

                                           The geographic reach of the Bribery Act 2010 has serious implications for companies. The
                                           corporate offence of failing to prevent bribery is applicable across the globe to any UK regis-
                                           tered company or equivalent foreign company that has business operations within the UK.
                                           This means that a company may be found guilty of an offence even if the offence was com-
                                           mitted by an employee, foreign subsidiary, joint venture partner, agent or other third-party
                                           intermediary acting on the company’s behalf overseas.




The business impact of non-compliance
The business impact of non-compliance often does not stop when the fine has been paid:


Immediate impact                                                   Further actions
•	 Impact on share price of negative publicity                     •	 Systems and controls require review
  Association with bribery and corruption can send share price        Rewriting policies and enacting companywide staff training
  plummeting                                                       •	 Procedures for working with third-parties need to be re-
•	 Company image is one of an organisation exposed to un-             viewed
  ethical business practice                                           Implementing effective due diligence, ongoing monitoring
  Public relations / corporate communications expenditure             and audit controls
  required to fix broken reputations                               •	 Organisation is subject to further scrutiny of consultants,
•	 Impact on sales and business development                           regulators and enforcement agencies
  Customers and business partners do not want to be associ-           Stigma and costs of facilitating additional internal investiga-
  ated with tarnished brands                                          tions and audits




                                           What does this mean for UK companies?

                                           Under the new offence of failure to prevent bribery, the defence for companies is to imple-
                                           ment ‘adequate procedures’.


                                           The Ministry of Justice is expected to publish guidance in June or July covering suggested
                                           procedures that companies can consider to prevent bribery. However, this guidance is likely
                                           to be broad ranging and unlikely to reflect the different degrees of risk faced by companies
                                           large and small and the changing demands of the specific industry sectors in which they
                                           operate.


                                           Prior to the publication of government guidance, the GC100 Group of senior legal officers
                                           from selected FTSE 100 companies issued the following useful guidance which companies
                                           may want to consider:




                                                                                           LexisNexis® Bribery Act 2010
Check your company’s anti-corruption procedures
	 Board responsibility for the anti-corruptionprogramme                organisation should carry out due diligence on the country in
   The board of directors should take responsibility for the            which the business is to be conducted, on its potential busi-
   effective implementation of the company’s anti-corruption            ness partners, agents used and on the proposed project or
   programme. The board should take steps to ensure that                business transaction in order to identify as far as reasonably
   senior management is aware of its policy in respect of corrup-       possible the risk of corruption.
   tion, and accepts the programme. The Chief Executive should        	 Anti-corruption contract terms
   make a clear statement about the expected culture and the            Consideration should be given to the contracts which are
   consequences of breaching these ideals.                              entered into between the company and its business partners
	 Compliance function                                                  to contain anti-corruption contract terms, and whether or
   A senior officer should be made responsible for oversight of         not they should provide express contractual obligations and
   the anti-corruption programme. They should be provided               penalties in relation to corruption. Particular care should be
   with proper authority to implement and monitor all pro-              taken when agents are being used.
   gramme activities.                                                 	 Decision-making process
	 Anti-corruption code                                                 An organisation should formalise its decision-making proc-
   Commercial organisations should have a clear and unam-               esses, so that where a greater risk of corruption is perceived
   biguous code of conduct which includes an anticorruption             to exist, the decision is taken by a suitably senior individual
   element, should publicise this code adequately internally, and       within the organisation.
   should publish the code on its website.                            	 Financial controls
	 Risk management                                                      An organisation should ensure that it puts in place financial
   Procedures should be established to assess the likely risks of       controls to minimise the risk of the company committing a cor-
   corruption arising in an organisation’s business.                    rupt act against another individual or organisation (e.g. employ-
	 Employment procedures                                                ees, clients, business partners, sub-contractors or suppliers),
   Whilst not appropriate for all organisations, wherever possible:     or of any corrupt act being committed against the company by
   a) employees should be vetted before they are employed               another individual or organisation. This can be done through an
   to ascertain as far as is reasonable that they are the type of       organisation’s internal audit function, if one exists.
   person who is likely to comply with the company’s ethical          	 Commercial controls
   policies;                                                            An organisation should ensure that its commercial controls
   b) employment contracts should include express contractual           minimise the risk of the company committing a corrupt act
   obligations and penalties in relation to corruption;                 against another individual or organisation (e.g. employees,
   c) disciplinary procedures should be in place which, where           clients, business partners, sub-contractors or suppliers), or
   appropriate, entitle the company to take suitable disciplinary       of any corrupt act being committed against the company by
   action against an employee who commits a corrupt act.                another individual or organisation.
	 Gifts and hospitality policy                                       	 Supply chain management
   A commercial organisation should develop and implement               Wherever possible, an organisation should use procurement
   a gifts and hospitality policy whereby it provides guidance to       and contract management procedures which minimise the
   employees on its policies in relation to the giving and receiv-      opportunity for corruption by sub-contractors and suppliers
   ing of gifts and entertainment, and puts in place measures to        against the company.
   monitor this activity.                                             	 Reporting and investigation procedures
	 Training                                                             An organisation should develop and implement procedures
   It is important for commercial organisations to ensure that          (“whistleblowing”) for reporting corruption which enable em-
   their codes of conduct and other policies are properly em-           ployees to report corruption in a safe and confidential manner
   bedded throughout their businesses. Anti-corruption training         to a responsible senior officer of the company. Similarly,
   should therefore be provided, with reminders on a regular            organisations should ensure that all allegations of corruption
   basis, to all relevant employees to make them aware of the           are properly investigated by properly qualified individuals, and,
   types of corruption, the risks of engaging in corrupt activity,      where appropriate, the results of those investigations are re-
   the organisation’s anti-corruption code, and how they may            ported back to the individual who made the original complaint.
   report corruption.
	 Due diligence                                                      Source: GC100: Guidance for Assessing Whether Adequate Pro-
   Before entering into any business relationship or project, the     cedures Are in Place to Combat Bribery and Corruption




                                                                                              LexisNexis® Bribery Act 2010
How to spot bribery and corruption?

                                              Bribery and corruption adopts many guises and often companies are unaware that common
                                              business practices within a firm’s day to day operations may expose them to the risks of be-
                                              coming a victim of bribery and corruption. Worse still, are those companies who may be una-
                                              ware that they operate within a business culture that may be perceived to promote bribery
                                              and corruption. All of these factors put a firm at risk of penalties under the Bribery Act 2010.


                                              The Serious Fraud Office has issued a useful set of corruption indicators which firms should
                                              consider as part of their approach to identifying and tackling the risks of bribery and corruption.




Corruption Indicators
This list is not exhaustive and the ingenuity of those involved in corruption knows no bounds! You should beware of:


• Abnormal cash payments                                               • Missing documents or records regarding meetings or deci-
• Abnormally high commission percentage being paid to                     sions
  a particular agency. This may be split into 2 accounts for           • Payments being made through 3rd party country, i.e. goods
  same agent often in different jurisdictions                             or services supplied to country A but payment is being
• Abusing decision process or delegated powers in specific                made, usually to shell company in country B
  cases                                                                • Pressure exerted for payments to be made urgently or
• Agreeing contracts not favourable to the organisation                   ahead of schedule
  either with terms or time period                                     • Private meetings with public contractors or companies
• Avoidance of independent checks on tendering or con-                    hoping to tender for contracts
  tracting processes                                                   • Raising barriers around specific roles or departments which
• Bypassing normal tendering / contractors procedure                      are key in the tendering / contracting process
• Company procedures or guidelines not being followed                  • Unexplained preference for certain contractors during
• Individual never takes time off even if ill, or holidays, or            tendering period
  insists on dealing with specific contractors him/herself             • Unusually smooth process of cases where individual does
• Invoices being agreed in excess of contract without reason-             not have the expected level of knowledge or expertise
  able cause                                                           • The payment of, or making funds available for high value
• Lavish gifts being received                                             expenses or school fees etc on behalf of others
• Making unexpected or illogical decisions accepting projects
  or contracts                                                         Source: Serious Fraud Office




                                                  Summary

                                                  The Bribery Act 2010 requires companies to prevent bribery in their organisation,
                                                  including intermediaries and other third party agents used by companies overseas.
                                                  The defence within this part of the Act is for companies to have in place “adequate
                                                  procedures” to mitigate the risks of bribery within their business.
                                                  Guidance indicates that implementing effective systems and controls for conduct-
                                                  ing third-party due diligence and monitoring helps your business to comply with the
                                                  requirements of the Bribery Act 2010.
                                                  The LexisNexis third-party due diligence solution provides comprehensive informa-
                                                  tion to enable you to conduct the checks that can identify corrupt behaviour.




                                                                                               LexisNexis® Bribery Act 2010
Origins of the Bribery Act 2010

                                                The Bribery Act 2010 is the outcome of a lengthy legislative process covering a series of
                                                initiatives to tackle bribery and corruption within the UK and involving the participation of
                                                leading international bodies: the Organisation for Economic Co-operation and Development
                                                (OECD) and Transparency International.




December 1997                                                            March 2007
UK signs the OECD Anti-Bribery Convention, committing all                Following strong criticism by the OECD Working Group on Brib-
parties to criminalise the payment of bribes to foreign public           ery, the Government asks the Law Commission to undertake a
officials. The Government claims that existing UK laws were              further review and make proposals for a new law
compliant with the Convention; but has consistently failed each
official review of compliance by the OECD peer review process            October 2008
                                                                         OECD Working Group on Bribery issues a report that was
1998                                                                     strongly critical of the UK’s continued failure to adopt modern
Law Commission submits its first review on the law of corruption,        anti-bribery legislation that would make it fully compliant with
recommending that existing law is out of date, confusing and re-         the OECD Convention
quired wholesale reform and replacement with a new Bill, which
it annexes to its report                                                 20 November 2008
                                                                         Law Commission’s proposals, including a new draft Bribery Bill,
June 2000                                                                are published
Jack Straw MP, as Home Secretary, promises to introduce a law
to criminalise foreign bribery in order to comply with the 1997          25 March 2009
OECD Convention                                                          Ministry of Justice publishes a draft Bribery Bill for joint scrutiny


November 2001                                                            28 July 2009
New section added to the Anti-Terrorism, Crime and Security              Joint Committee of Parliament takes extensive evidence on the
Act whereby existing law on bribery is expressly extended to             draft Bill and publishes its report on 28 July 2009
foreign public officials
                                                                         19 November 2009
2003                                                                     Government’s revised Bribery Bill is introduced in the House of
Government introduces an anti-corruption Bill. This was strongly         Lords by Lord Bach; and on 20 November 2009, the Govern-
criticised by the Joint Parliamentary Committee that scrutinized         ment publishes its response to the Joint Committee’s report
the Bill. The Government rejects the Committee’s recommenda-
tions; but no further action is taken on the Bill                        February 2010
                                                                         The Bribery Bill passes the House of Lords on 8 February and has
2005                                                                     its First Reading (no debate) in the House of Commons on
Home Office embarks on a further public consultation on cor-             9 February
ruption law and only publishes its response in 2007
                                                                         8 April 2010
2006                                                                     The Bill receives Royal Assent
A private members bill drafted by Transparency International-
UK is introduced and passed in the House of Lords. This was to
demonstrate that it was possible to draft a simple but effective
anti-corruption Bill                                                     Source: Transparency International




                                                                                                 LexisNexis® Bribery Act 2010
The need for comprehensive risk and compliance tools is clear. But manual processes and
                                                     disparate policies open security gaps that leave organizations exposed. In response to client
                                                     needs, LexisNexis has assembled Integrity Solutions, an integrated compliance management
                                                     platform that gives enterprises greater control over their ethical responsibilities, their regula-
                                                     tory requirements and their overall reputations.




    LexisNexis Integrity
    Solutions includes:
    • ID Verification
    • Lexis Diligence
    • Company Dossier
    • Bridger Insight
    • Risk Monitor
    • eReputation Services




                                                     About LexisNexis®
                                                     For more than 30 years, the LexisNexis group of Reed Elsevier has provided online informa-
                                                     tion news services covering media, legal and business information. Active in more than 60
                                                     countries on six continents, LexisNexis draws upon more than 35,000 renowned sources
                                                     worldwide to deliver information targeted to user workflows for job-specific and enterprise-
                                                     wide needs.
                                                     Its Integrity Solutions serve global investment banks, top accounting and legal firms, and
                                                     leading multinational companies seeking reliable, automated and cost-effective means for
                                                     fulfilling screening, security and compliance responsibilities.




                                                                                                                          LexisNexis UK, London
                                                                                                                            T +44 (0)20 7400 29 84
                                                                                                                              E risk@lexisnexis.co.uk
                                                                                                                          W www.lexisnexis.co.uk/risk



                                                                                                           LexisNexis Benelux, Amsterdam
                                                                                                                                T +31 (0)20 485 34 56
                                                                                                                          E servicedesk@lexisnexis.nl
                                                                                                                                  W www.lexisnexis.nl



LexisNexis and the Knowledge Burst logo are registered trademarks of Reed Elsevier Properties Inc., used under license, © 2011 LexisNexis, a division of Reed
Elsevier Inc. All rights reserved.

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Protect your organisation against bribery

  • 1. Red paper Bribery Act 2010 Protect your organisation by acting now Released april 2010
  • 2. Introduction The Bribery Act 2010 gained Royal Assent on 8 April 2010 and represents the most significant change in the UK government’s approach to tackling bribery and corruption for over 100 years. The Bribery Act 2010 replaces outdated legislation, bringing the UK in line with the OECD Anti- Bribery Convention and aims to make the UK a better place for conducting business. The primary focus for companies is the new offence of failure by a commercial organisa- tion to prevent bribery. All offences carry a maximum prison sentence of 10 years, with the exception of the offence relating to failure to prevent bribery, which carries an unlimited fine. Where a director is convicted of bribery, they may also be disqualified from holding a director position for up to 15 years. The defence for a company is to be able to demonstrate that adequate procedures are in place to prevent bribery. This puts companies’ operational procedures under the spotlight and businesses may want to consider on a risksensitive basis what processes and controls are implemented to mitigate bribery and corruption within their firm. Despite a spate of recent bribery and corruption cases both in the UK and overseas, many companies are unprepared for the Bribery Act 2010 and need to act on this as the highest priority. Key Influencers Transparency International Serious Fraud Office www.transparency.org.uk www.sfo.gov.uk Organisation for Economic Co-operation Ministry of Justice and Development (OECD) www.justice.gov.uk www.oecd.org BIS: Department for Business, Innovation United Nations Convention and Skills www.unodc.org www.bis.gov.uk US Department of Justice www.justice.gov LexisNexis® Bribery Act 2010
  • 3. Bribery Act 2010 The Bribery Act reforms the criminal law to provide a new, modern and comprehensive scheme of bribery offences that will enable courts and prosecutors to respond more ef- fectively to bribery at home or abroad. The Act will: • provide a more effective legal framework to combat bribery in the public or private sectors • replace the fragmented and complex offences at common law and in the Prevention of Corruption Acts 1889-1916 • create two general offences covering the offering, promising or giving of an advantage, and requesting, agreeing to receive or accepting of an advantage • create a discrete offence of bribery of a foreign public official • create a new offence of failure by a commercial organisation to prevent a bribe being paid for or on its behalf (it will be a defence if the organisation has adequate procedures in place to prevent bribery) • require the Secretary of State to publish guidance about procedures that relevant com- mercial organisations can put in place to prevent bribery on their behalf • help tackle the threat that bribery poses to economic progress and development around the world. The Bill was published in draft on 25 March 2009 for pre-legislative scrutiny by a Joint Com- mittee of both Houses of Parliament. The Bill received Royal Assent on 8 April 2010. Source: Ministry of Justice Penalties Committing an offence under the Bribery Act 2010 can result in severe penalties. An individual guilty of bribing another person, receiving a bribe or found to be bribing a foreign official faces a maximum prison sentence of 10 years and/or an unlimited fine. A company found guilty of failing to prevent bribery will be subject to an unlimited fine. Direc- tors and senior executives will also be personally liable if it is found that they were directly associated with an offence committed by their company. Where a director is convicted of bribery, they may also be disqualified from holding a director position for up to 15 years. Companies may also find themselves debarred from EU and US procurement lists. The defence for a company is being able to demonstrate that adequate procedures are in place to prevent bribery. LexisNexis® Bribery Act 2010
  • 4. Geographic reach of the Bribery Act 2010 The geographic reach of the Bribery Act 2010 has serious implications for companies. The corporate offence of failing to prevent bribery is applicable across the globe to any UK regis- tered company or equivalent foreign company that has business operations within the UK. This means that a company may be found guilty of an offence even if the offence was com- mitted by an employee, foreign subsidiary, joint venture partner, agent or other third-party intermediary acting on the company’s behalf overseas. The business impact of non-compliance The business impact of non-compliance often does not stop when the fine has been paid: Immediate impact Further actions • Impact on share price of negative publicity • Systems and controls require review Association with bribery and corruption can send share price Rewriting policies and enacting companywide staff training plummeting • Procedures for working with third-parties need to be re- • Company image is one of an organisation exposed to un- viewed ethical business practice Implementing effective due diligence, ongoing monitoring Public relations / corporate communications expenditure and audit controls required to fix broken reputations • Organisation is subject to further scrutiny of consultants, • Impact on sales and business development regulators and enforcement agencies Customers and business partners do not want to be associ- Stigma and costs of facilitating additional internal investiga- ated with tarnished brands tions and audits What does this mean for UK companies? Under the new offence of failure to prevent bribery, the defence for companies is to imple- ment ‘adequate procedures’. The Ministry of Justice is expected to publish guidance in June or July covering suggested procedures that companies can consider to prevent bribery. However, this guidance is likely to be broad ranging and unlikely to reflect the different degrees of risk faced by companies large and small and the changing demands of the specific industry sectors in which they operate. Prior to the publication of government guidance, the GC100 Group of senior legal officers from selected FTSE 100 companies issued the following useful guidance which companies may want to consider: LexisNexis® Bribery Act 2010
  • 5. Check your company’s anti-corruption procedures  Board responsibility for the anti-corruptionprogramme organisation should carry out due diligence on the country in The board of directors should take responsibility for the which the business is to be conducted, on its potential busi- effective implementation of the company’s anti-corruption ness partners, agents used and on the proposed project or programme. The board should take steps to ensure that business transaction in order to identify as far as reasonably senior management is aware of its policy in respect of corrup- possible the risk of corruption. tion, and accepts the programme. The Chief Executive should  Anti-corruption contract terms make a clear statement about the expected culture and the Consideration should be given to the contracts which are consequences of breaching these ideals. entered into between the company and its business partners  Compliance function to contain anti-corruption contract terms, and whether or A senior officer should be made responsible for oversight of not they should provide express contractual obligations and the anti-corruption programme. They should be provided penalties in relation to corruption. Particular care should be with proper authority to implement and monitor all pro- taken when agents are being used. gramme activities.  Decision-making process  Anti-corruption code An organisation should formalise its decision-making proc- Commercial organisations should have a clear and unam- esses, so that where a greater risk of corruption is perceived biguous code of conduct which includes an anticorruption to exist, the decision is taken by a suitably senior individual element, should publicise this code adequately internally, and within the organisation. should publish the code on its website.  Financial controls  Risk management An organisation should ensure that it puts in place financial Procedures should be established to assess the likely risks of controls to minimise the risk of the company committing a cor- corruption arising in an organisation’s business. rupt act against another individual or organisation (e.g. employ-  Employment procedures ees, clients, business partners, sub-contractors or suppliers), Whilst not appropriate for all organisations, wherever possible: or of any corrupt act being committed against the company by a) employees should be vetted before they are employed another individual or organisation. This can be done through an to ascertain as far as is reasonable that they are the type of organisation’s internal audit function, if one exists. person who is likely to comply with the company’s ethical  Commercial controls policies; An organisation should ensure that its commercial controls b) employment contracts should include express contractual minimise the risk of the company committing a corrupt act obligations and penalties in relation to corruption; against another individual or organisation (e.g. employees, c) disciplinary procedures should be in place which, where clients, business partners, sub-contractors or suppliers), or appropriate, entitle the company to take suitable disciplinary of any corrupt act being committed against the company by action against an employee who commits a corrupt act. another individual or organisation.  Gifts and hospitality policy  Supply chain management A commercial organisation should develop and implement Wherever possible, an organisation should use procurement a gifts and hospitality policy whereby it provides guidance to and contract management procedures which minimise the employees on its policies in relation to the giving and receiv- opportunity for corruption by sub-contractors and suppliers ing of gifts and entertainment, and puts in place measures to against the company. monitor this activity.  Reporting and investigation procedures  Training An organisation should develop and implement procedures It is important for commercial organisations to ensure that (“whistleblowing”) for reporting corruption which enable em- their codes of conduct and other policies are properly em- ployees to report corruption in a safe and confidential manner bedded throughout their businesses. Anti-corruption training to a responsible senior officer of the company. Similarly, should therefore be provided, with reminders on a regular organisations should ensure that all allegations of corruption basis, to all relevant employees to make them aware of the are properly investigated by properly qualified individuals, and, types of corruption, the risks of engaging in corrupt activity, where appropriate, the results of those investigations are re- the organisation’s anti-corruption code, and how they may ported back to the individual who made the original complaint. report corruption.  Due diligence Source: GC100: Guidance for Assessing Whether Adequate Pro- Before entering into any business relationship or project, the cedures Are in Place to Combat Bribery and Corruption LexisNexis® Bribery Act 2010
  • 6. How to spot bribery and corruption? Bribery and corruption adopts many guises and often companies are unaware that common business practices within a firm’s day to day operations may expose them to the risks of be- coming a victim of bribery and corruption. Worse still, are those companies who may be una- ware that they operate within a business culture that may be perceived to promote bribery and corruption. All of these factors put a firm at risk of penalties under the Bribery Act 2010. The Serious Fraud Office has issued a useful set of corruption indicators which firms should consider as part of their approach to identifying and tackling the risks of bribery and corruption. Corruption Indicators This list is not exhaustive and the ingenuity of those involved in corruption knows no bounds! You should beware of: • Abnormal cash payments • Missing documents or records regarding meetings or deci- • Abnormally high commission percentage being paid to sions a particular agency. This may be split into 2 accounts for • Payments being made through 3rd party country, i.e. goods same agent often in different jurisdictions or services supplied to country A but payment is being • Abusing decision process or delegated powers in specific made, usually to shell company in country B cases • Pressure exerted for payments to be made urgently or • Agreeing contracts not favourable to the organisation ahead of schedule either with terms or time period • Private meetings with public contractors or companies • Avoidance of independent checks on tendering or con- hoping to tender for contracts tracting processes • Raising barriers around specific roles or departments which • Bypassing normal tendering / contractors procedure are key in the tendering / contracting process • Company procedures or guidelines not being followed • Unexplained preference for certain contractors during • Individual never takes time off even if ill, or holidays, or tendering period insists on dealing with specific contractors him/herself • Unusually smooth process of cases where individual does • Invoices being agreed in excess of contract without reason- not have the expected level of knowledge or expertise able cause • The payment of, or making funds available for high value • Lavish gifts being received expenses or school fees etc on behalf of others • Making unexpected or illogical decisions accepting projects or contracts Source: Serious Fraud Office Summary The Bribery Act 2010 requires companies to prevent bribery in their organisation, including intermediaries and other third party agents used by companies overseas. The defence within this part of the Act is for companies to have in place “adequate procedures” to mitigate the risks of bribery within their business. Guidance indicates that implementing effective systems and controls for conduct- ing third-party due diligence and monitoring helps your business to comply with the requirements of the Bribery Act 2010. The LexisNexis third-party due diligence solution provides comprehensive informa- tion to enable you to conduct the checks that can identify corrupt behaviour. LexisNexis® Bribery Act 2010
  • 7. Origins of the Bribery Act 2010 The Bribery Act 2010 is the outcome of a lengthy legislative process covering a series of initiatives to tackle bribery and corruption within the UK and involving the participation of leading international bodies: the Organisation for Economic Co-operation and Development (OECD) and Transparency International. December 1997 March 2007 UK signs the OECD Anti-Bribery Convention, committing all Following strong criticism by the OECD Working Group on Brib- parties to criminalise the payment of bribes to foreign public ery, the Government asks the Law Commission to undertake a officials. The Government claims that existing UK laws were further review and make proposals for a new law compliant with the Convention; but has consistently failed each official review of compliance by the OECD peer review process October 2008 OECD Working Group on Bribery issues a report that was 1998 strongly critical of the UK’s continued failure to adopt modern Law Commission submits its first review on the law of corruption, anti-bribery legislation that would make it fully compliant with recommending that existing law is out of date, confusing and re- the OECD Convention quired wholesale reform and replacement with a new Bill, which it annexes to its report 20 November 2008 Law Commission’s proposals, including a new draft Bribery Bill, June 2000 are published Jack Straw MP, as Home Secretary, promises to introduce a law to criminalise foreign bribery in order to comply with the 1997 25 March 2009 OECD Convention Ministry of Justice publishes a draft Bribery Bill for joint scrutiny November 2001 28 July 2009 New section added to the Anti-Terrorism, Crime and Security Joint Committee of Parliament takes extensive evidence on the Act whereby existing law on bribery is expressly extended to draft Bill and publishes its report on 28 July 2009 foreign public officials 19 November 2009 2003 Government’s revised Bribery Bill is introduced in the House of Government introduces an anti-corruption Bill. This was strongly Lords by Lord Bach; and on 20 November 2009, the Govern- criticised by the Joint Parliamentary Committee that scrutinized ment publishes its response to the Joint Committee’s report the Bill. The Government rejects the Committee’s recommenda- tions; but no further action is taken on the Bill February 2010 The Bribery Bill passes the House of Lords on 8 February and has 2005 its First Reading (no debate) in the House of Commons on Home Office embarks on a further public consultation on cor- 9 February ruption law and only publishes its response in 2007 8 April 2010 2006 The Bill receives Royal Assent A private members bill drafted by Transparency International- UK is introduced and passed in the House of Lords. This was to demonstrate that it was possible to draft a simple but effective anti-corruption Bill Source: Transparency International LexisNexis® Bribery Act 2010
  • 8. The need for comprehensive risk and compliance tools is clear. But manual processes and disparate policies open security gaps that leave organizations exposed. In response to client needs, LexisNexis has assembled Integrity Solutions, an integrated compliance management platform that gives enterprises greater control over their ethical responsibilities, their regula- tory requirements and their overall reputations. LexisNexis Integrity Solutions includes: • ID Verification • Lexis Diligence • Company Dossier • Bridger Insight • Risk Monitor • eReputation Services About LexisNexis® For more than 30 years, the LexisNexis group of Reed Elsevier has provided online informa- tion news services covering media, legal and business information. Active in more than 60 countries on six continents, LexisNexis draws upon more than 35,000 renowned sources worldwide to deliver information targeted to user workflows for job-specific and enterprise- wide needs. Its Integrity Solutions serve global investment banks, top accounting and legal firms, and leading multinational companies seeking reliable, automated and cost-effective means for fulfilling screening, security and compliance responsibilities. LexisNexis UK, London T +44 (0)20 7400 29 84 E risk@lexisnexis.co.uk W www.lexisnexis.co.uk/risk LexisNexis Benelux, Amsterdam T +31 (0)20 485 34 56 E servicedesk@lexisnexis.nl W www.lexisnexis.nl LexisNexis and the Knowledge Burst logo are registered trademarks of Reed Elsevier Properties Inc., used under license, © 2011 LexisNexis, a division of Reed Elsevier Inc. All rights reserved.