Out-Law Guide | 05 Nov 2010 | 9:41 am | 3 min. read
The UK's anti-bribery legislation will be overhauled in April 2011 when the Bribery Act 2010 comes into force. The Act introduces strict liability for organisations whose agents or associates engage in bribery, unless the organisation has adequate procedures in place to prevent it.
Organisations, including universities, should have full and effective anti-bribery measures in place before April to mitigate their risk.
The Bribery Act 2010 creates four key offences:
The maximum sentence is 10 years for individuals who commit such offences. Organisations are liable for an unlimited fine. It is expected that fines are likely to be defined with reference to an organisation's annual turnover, a method used when punishing anti-competitive conduct by organisations.
There is nothing groundbreaking about the first three offences, all of which apply to individuals as opposed to commercial organisations. What is new is the strict liability offence of failing to prevent bribery.
The broad definition of 'association' means an organisation will be liable for the actions of any person carrying out services for or on behalf of the organisation, in whatever capacity. It could catch any contractors, agents or subsidiary companies.
The Act has extra-territorial reach, so the bribery does not need to take place on UK soil. Further, if the organisational failures are with the consent or connivance of any senior officers of that organisation, they too could be liable for an offence under the Act.
The only defence a commercial organisation will have if charged with bribery is the defence of 'Adequate Procedures'. In summary, this means that an organisation can escape or mitigate liability if it can show that it had sufficient safeguards in place throughout the organisation designed to prevent persons associated with it from undertaking acts of bribery.
It is this element of the legislation that has had the greatest impact. Commercial organisations now have to consider and implement policies and training on bribery and corruption as well as review their approach to hospitality, gifts and charitable donations, all of which have potential for interpretation as bribes under the new legislation.
Although the Act is focused on 'commercial organisations,' it could apply to universities, notwithstanding their position as charitable institutions. Firstly, individuals within universities could be involved in an activity which could constitute an offence under the new Act, for example in connection with the misappropriation of grants or data manipulation in funded research. Secondly, as more universities conduct international and private sector ventures, paid-for commercial research and other commercial activities to make up public funding shortfalls, there is scope for corrupt practices to become more widespread among persons 'associated' with them. These activities also increase the scope for prosecutors to treat universities as 'commercial organisations'. Consequently, a university could be charged with failing to prevent bribery.
Richard Alderman of the Serious Fraud Office warned that a 'strong anti-corruption culture' is pivotal and universities will need to ensure that they have robust systems and procedures in order to defend any prosecution under the Act.
Universities should appoint a compliance officer who can report on and assist in the implementation of preventative measures.
Obvious areas of attention include:
As long as there is an awareness of the risks, and implementation of adequate measures to guard against them, then any institution will substantially mitigate the risk of being held criminally liable for the actions of individuals. The key is to assess the risks and act accordingly.
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