Out-Law / Your Daily Need-To-Know

Out-Law Guide 4 min. read

The UK Bribery Act 2010: principles, offences and penalties

The Bribery Act 2010 (the Act) came into force in April 2011, overhauling UK anti-bribery legislation.

The Act set out the five key UK bribery offences and introduced strict liability for commercial organisations whose service providers (called ‘associated persons’) engage in bribery unless the organisation has adequate procedures in place to prevent it.

Organisations should ensure they have effective anti-bribery measures in place to mitigate their risk.

What is the Bribery Act 2010?

The Act is the UK’s main anti-corruption law.

The Act defines a bribe as any advantage given to influence a person in the carrying out of a function, usually connected with their work or office. The intention of the briber must be either to influence the bribee to carry out that function improperly, or, with respect to non-UK public officials, to obtain a benefit or some sort of advantage or favourable treatment from that public official.

A bribe may be given indirectly, i.e. to someone else other than the person who is to be influenced – for example, a friend, relative or other person at the direction of the bribee.

The Act has extra-territorial reach. This means that the bribery does not need to take place on UK soil and non-UK companies are within the scope of the Act if they have a business in the UK or if any part of a bribery arrangement takes place within the UK.

What are the offences under the Bribery Act?

The Act contains five key offences, each of which is broadly defined:

  • Active bribery (offering to or giving a bribe to another) – an advantage offered to get the recipient to do something improper in the discharge of their functions;
  • Passive bribery (accepting or requesting a bribe) – an advantage accepted for carrying out a function improperly;
  • Bribery of a foreign (non-UK) public official – an advantage intended to influence a public official to help your business in any way;
  • “Consent or connivance” by a director or senior company officer in bribery by a company; and
  • Failure by a commercial organisation to prevent bribery on its behalf by its associated persons.

Failure to prevent bribery

The Act revolutionised corporate criminal law by making “relevant commercial organisations” criminally liable if they failed to prevent an act of bribery which was, at least in part, intended to benefit the commercial organisation, by persons associated with it.

Relevant commercial organisations are companies, partnerships and other entities incorporated or formed under UK law; and non-UK companies and other legal entities if they carry on a business, or part of a business, in the UK. Associated persons are those who perform services for the commercial organisation and may include employees, agents, consultants, contractors, subsidiary companies and joint venture (JV) partners.

Because of the new offence, and the broad definition of “associated person”, businesses may be criminally liable for the bribes offered or given not only by directors but by any person carrying out services for or on behalf of the organisation including employees, agents, consultants, JV partners, contractors, agents, subsidiaries and sister companies. Directors and officers also commit a criminal offence if they turn a blind eye to bribery.

The only defence a commercial organisation has if charged with the failure to prevent bribery offence is the defence of 'adequate procedures'. In summary, this means that an organisation has a complete defence to the failing to prevent bribery offence 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 to benefit the organisation. 

The adequate procedures defence

Under the  Act, adequate procedures should be based on the UK government’s statutory guidance (45-page / 390KB PDF). The government guidance sets out a risk-based approach to compliance around six principles, which are:

  • Principle 1: Proportionate Procedures
  • Principle 2: Top Level Commitment
  • Principle 3: Risk Assessment
  • Principle 4: Due Diligence
  • Principle 5: Communication (including Training)
  • Principle 6: Monitoring and Review

The Serious Fraud Office (SFO) has also published various policies and internal guidance documents for investigators and prosecutors considering bribery offences. Key amongst these are its Bribery Act guidance, which has guidance on adequate procedures, facilitation payments and business expenditure; and its guidance on evaluating a compliance programme.

Organisations should carefully consider the statutory and other relevant guidance when designing and reviewing their internal compliance programme. Taking professional advice is recommended.

Enforcement and penalties

There are three distinct enforcement jurisdictions within the UK: England and Wales, Northern Ireland and Scotland.

Investigations of high value bribery or complex overseas bribery may be investigated by the SFO. In other cases, investigations are taken forward by the National Crime Agency or relevant police force.

The SFO and the Scottish public prosecutor, the Crown Office and Procurator Fiscal Service (COPFS), encourage self-reporting by businesses in return for consideration being given to alternatives to prosecution, such as a Deferred Prosecution Agreement or civil settlement. There are important legal jurisdictional and commercial considerations in deciding whether to self-report, and legal advice should always be taken. 

The consequences for individuals and organisations found guilty of an offence under the Act can be serious. The maximum sentence is 10 years for individuals who commit such offences. Organisations are liable for an unlimited fine; removal of tainted proceeds; debarment from public sector contracts/tenders, as well as the disruption and cost of a law enforcement investigation; and directors may be disqualified from acting as a director for between two and fifteen years.

In England and Wales, the Sentencing Council’s Definitive Guideline for Fraud, Bribery and Money Laundering offences (58-page / 1.27MB PDF), effective from 1 October 2014, sets out a stepped process for sentence determination, which for corporate offenders is linked to their turnover.

Extension of corporate failure to prevent to other economic crimes

The Act’s offence of corporate failure to prevent bribery has been extended to failure to prevent the facilitation of tax evasion. More recently, the government has confirmed its intention to create a new corporate criminal offence of failure to prevent fraud and money laundering by amendment to the Economic Crime and Corporate Transparency Bill, currently making its way through the UK parliament.

The principle has also been adopted as a new model of corporate criminal liability in other countries.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.