Bribery Act 2010 toolkit

A toolkit to assist with Bribery Act 2010 compliance.

Contents

Scope of this note

This practice note explains and provides links to all resources concerning the Bribery Act 2010.

 

Understanding the Bribery Act 2010

 

Advising the board of directors

 

Achieving compliance: adequate procedures to prevent bribery

 

Addressing specific legal issues arising from the Bribery Act

We have published practice notes examining the following key issues relating to the Bribery Act:

 

Self-reporting

For an overview of the bribery and corruption self-reporting initiative in Scotland, see Practice note, Bribery and corruption: self-reporting regime in Scotland ( www.practicallaw.com/1-518-2202) . This initiative is distinct from the SFO's self-reporting regime in England, Wales and Northern Ireland.

 

Enforcement

For information on how the SFO must exercise its prosecutorial discretion, including details on the guidelines it must apply (including the Bribery Act Prosecution Guidance), and the evidential and public interest factors it must take into account, see Practice note, Bribery Act 2010: enforcement: prosecutorial discretion ( www.practicallaw.com/6-504-2191) .

 

Concerns for certain types of organisation

Multinational organisations and those conducting business outside the UK

Organisations involved in public procurement

For an examination of the potential for the mandatory and discretionary exclusion of contractors from competing for public contracts if they have been convicted of bribery or corruption, see:

For standard clauses which may be inserted into contracts with public authorities, see below, Public authorities.

Public authorities

Organisations in the construction industry

According to research carried out by Transparency International, organisations in the construction and public works industry are the most likely to pay a bribe to win business abroad (see Transparency International).

Construction standard form contracts tend to refer to bribery and corruption, and there are various industry initiatives aiming to address the problems. However, some of the practical issues hindering effective enforcement in the construction sector include:

  • The size of some construction and infrastructure projects.

  • The difficulty of tracing all payments between the various parties involved (contractors, sub-contractors and designers).

  • The bespoke nature of projects, which makes it hard to benchmark costs, and therefore harder to identify some inflated costs that may indicate corruption.

  • The number of administrative and regulatory requirements that may surround a significant project, such as planning permission (zoning) and environmental permits, which increase the opportunity for facilitation payments and other bribes to be demanded or paid.

For one example of a UK industry approach, see the UK Contractors Group (UKCG) short anti-bribery code of conduct.

JCT contracts

Clause 8.6 of the following JCT contracts addresses corruption:

  • JCT Standard Building Contract, 2005 edition, Revision 2 2009 (SBC05) and the 2011 edition (SBC11).

  • JCT Design and Build Contract, 2005 edition, Revision 2 2009 (DB05) and the 2011 edition (DB11).

  • JCT Intermediate Building Contract, 2005 edition, Revision 2 2009 (IC05) and the 2011 edition (IC11).

  • JCT Intermediate Building Contract with contractor's design, 2005 edition, Revision 2 2009 (ICD05) and the 2011 edition (IC11).

For a standard clause amending JCT clause 8.6 to address the requirements of the Bribery Act 2010, see Standard clause, Bribery Act 2010: Replacement JCT clause 8.6: Corruption ( www.practicallaw.com/1-505-9810) . (Note that, while clause 8.6 the JCT 2011 editions already refers to the Bribery Act 2010, this standard clause includes further amendments that may be appropriate.)

PLC Construction has also amended a number of standard documents to incorporate this new clause (see Legal update, New standard clause: amending JCT contracts to refer to Bribery Act 2010 ( www.practicallaw.com/0-506-0423) .

FIDIC contracts

Clause 15 (in particular, clauses 15.2 and 15.6) of the FIDIC Pink Book refer to bribery and corrupt practice, allowing the employer to terminate the contract. When FIDIC was developing the Pink Book, this was one area where it made significant changes from the FIDIC Red Book (1999). (For more information, see Practice note, FIDIC Pink Book: The MDB Harmonised Edition of the Red Book ( www.practicallaw.com/3-385-9997) .)

Organisations in the financial services sector

For an overview of the implications that the Bribery Act will have for banks and other financial institutions, see Practice note, Bribery Act 2010: compliance and enforcement issues for financial institutions ( www.practicallaw.com/6-504-4741) .

Organisations regulated by the Financial Conduct Authority (FCA) must also comply with its anti-bribery and corruption requirements:

The FCA cannot bring criminal prosecutions under the Bribery Act, so Bribery Act compliance is not specifically covered by these resources. Nevertheless, these resources are useful as the FCA's requirements are likely to be instructive for achieving Bribery Act compliance for organisations subject to them.

Other useful resources for organisations in the financial services sector are:

Charities and not-for-profit organisations

The Bribery Act is likely to apply to many charities and other not-for-profit organisations. This is made clear in the Adequate Procedures Guidance (see Legal update, Bribery Act 2010: new guidance relevant to charities ( www.practicallaw.com/5-505-5037) ).

Consequently, the Charity Commission has updated its guidelines, entitled "Protecting charities from harm (the 'compliance toolkit')" to include a new section on bribery and corruption. This provides advice to charities on issues arising out of the Bribery Act.

For more information, see Legal update, Charity Commission publishes guidance to charity trustees on Bribery Act ( www.practicallaw.com/5-507-0151) and Transparency International's guide Anti-Bribery Principles For Not-For-Profit Organisations.

 

Transactional considerations

Commercial agreements

See Practice note, Bribery Act 2010: application to commercial agreements ( www.practicallaw.com/4-506-7875) for:

  • Practical tips for carrying out risk assessments on commercial transactions and determining if a commercial agreement requires specific anti-bribery terms.

  • Discussion of the common commercial transactions which fall into scope of the section 7 offence of failing to prevent bribery by an associated person, including agency, consultancy and supply of services.

  • Analysis of commercial transactions where it is less clear whether one party could be classified as an associated person of the other under section 7, including under franchise, distribution and white label agreements.

  • Discussion of specific issues, such as what to do when acting for the associated person, supply chain relationships and seeking an indemnity from the associated person.

Mergers and acquisitions

Practice note:

Standard clauses:

Debt finance: facility (or loan) agreements

For anti-corruption and anti-bribery representations, warranties and covenants for use in a facility agreement (or loan agreement) (including integrated drafting notes explaining the law behind and commercial reasons for the clauses), see Standard clauses, Anti-corruption provisions: facility agreement ( www.practicallaw.com/5-506-0784) .

 

Recent developments

On 11 July 2016, the second DPA was completed between the SFO and a yet unnamed company. The second DPA differed from the approach taken in Standard Bank, in that the financial penalty imposed on the company was reduced from a starting point of £16.4m to prevent the company from being pushed into insolvency. For more information see Legal update, SFO reaches second deferred prosecution agreement, in which the company will pay £6.5m ( www.practicallaw.com/3-630-7747) .

On 22 February 2016, in R v Sweett, the first conviction for an offence under section 7 of the Bribery Act 2010, the SFO declined to offer the company a DPA and prosecuted. Sweett demonstrated the importance of cooperating with the SFO if a DPA is sought. For more information see Legal update, Sweett Group plc sentenced for first conviction under section 7 of the Bribery Act 2010 ( www.practicallaw.com/1-623-5431) .

On 30 November 2015, the first DPA was agreed between the SFO and ICBC Standard Bank. See Legal update, First DPA approved (Crown Court).  ( www.practicallaw.com/5-620-7445)

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