Procrastinators Beware: The UK Bribery Act is Imminent

Failure to prevent bribery may the the biggest challenge for companies working towards compliance

Posted by dmontgomery in Ethics & Compliance on June 30th, 2011

As the hours count down to the implementation of the UK Bribery Act, some companies may be still getting their policies and procedures aligned with the requirements of the new Act. We asked Anthony Cole, a UK lawyer practicing in Calgary with Christine Silverberg, retired Chief of Police and lawyer of the firm Wolch, Hursh, deWit, Silverberg & Watts, what companies should be focusing on at this stage.

“The most pressing issue for companies that may find themselves subject to the UK Bribery Act is ensuring that the anti-bribery policies and procedures they have in place are sufficiently robust to protect them from liability in the event that one of their employees or agents engages in bribery,” he says.

Major Challenge of the Act

Cole identifies the offense of “failing to prevent bribery” as one of the biggest challenges for companies to consider. The Bribery Act imposes a considerable burden on companies who potentially fall within its scope, by creating a strict liability offence for commercial organizations for failing to prevent bribery. Unless the investigating authority considers a company’s policies and procedures adequate, considering the circumstances of the company and the context in which it operates, the company could face prosecution for the offence of failing to prevent bribery.

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“It seems from the Bribery Act Guidance published by the UK Ministry of Justice, and from comments made by senior UK law enforcement figures, what is required is a commitment by companies to developing a culture of zero-tolerance towards bribery in their organizations,” says Cole. “Accordingly, a good start to ensuring readiness for the UK Bribery Act is asking whether there is an existing ‘zero-tolerance’ culture towards bribery within the organization, identifying gaps if there are any, and being able to point to tangible examples of how that culture has been fostered.”

Adequate Procedures

To stave off the risk of prosecution, companies must be able to demonstrate that they have adequate systems in place to prevent bribery, says Cole.

“The cost of creating and enforcing policies and procedures that satisfy the requirement of ‘adequacy’ – in terms of both financial and human resources – is considerable, and the burden will be felt most heavily by small and medium-sized companies. As such, it may prove difficult to convince some of these companies that the price of compliance is worth paying. However, a series of successful and high-profile prosecutions under the U.K. Bribery Act may force them in to reconsidering such a risky strategy.”

Many believe that the UK Bribery Act is not without its flaws, says Cole. For many, the requirement to have “adequate procedures” in place is hopelessly vague. And while the UK Ministry of Justice has published detailed guidance, some would question the wisdom of leaving a question of criminal liability to mere “guidance”, he says. “In addition, the absence of an express exception for reasonable expenditure on corporate entertaining is an issue tackled in the Ministry of Justice Guidance, but arguably much is left to the discretion of Prosecutors,” says Cole.

Email Anthony Cole: Anthony dot cole at silverberglegal dot com

Email Christine Silverberg: christine at silverberglegal dot com


Managing Edit

Dawn Lomer is the managing editor at i-Sight Software and a Certified Fraud Examiner (CFE). She holds an Honours Bachelor of Arts in English and Philosophy from York University in Toronto. She writes about topics related to workplace investigations, ethics and compliance, data security and e-discovery for the company blog and industry publications. Through her interviews with industry experts and attendance at conferences and seminars, Dawn has developed broad knowledge of the subjects she covers.

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