Home | Bosses face up to 10 years in jail under new bribery laws

Bosses face up to 10 years in jail under new bribery laws

30 March 2010

Company directors could be jailed for up to 10 years if their business is caught by the proposed new Bribery Act.

Under it, firms could also be barred from trading and face heavy fines.

National law firm Shoosmiths has welcomed this much needed reform, which is set to
become law before the General Election.

At the same time it is urging firms to ‘understand the new law’ and put in place safeguards to
avoid falling victim to the far-reaching proposals.

Partner and commercial specialist Andrew Pickin said: “At long last there is to be a change
in the law. The current legislation is based on old law going back more than 100 years and
has been widely criticised for being too complex and lacking certainty.”

The Bill will become law in a climate in which the Serious Fraud Office (SFO) and the
Financial Services Authority (FSA) have been cracking down on bribery, including bribes
paid to win contracts overseas and receipt of irregular payments. 

Pickin said: “The SFO wants to focus on the real offenders, rather than those trying to
do the right thing. In practice there are likely to be few prosecutions, and for the good guys
there should be nothing significant to fear in the new laws, but it will be important to be
prepared.”

The Act introduces four new offences:
• to offer promise or give a bribe
• to request, agree to receive or accept a bribe
• a separate offence of bribery of foreign public officials
• the Corporate Offence is an entirely new offence of failure by relevant commercial organisations to prevent bribery by those working on behalf of the business – including employees, agents and subsidiaries (whether domestic or foreign)

Senior managers may be personally liable if bribery committed by companies was done with
their consent or collusion.

Pickin said: “This means personal liability for senior officers is a real risk, and it applies
whether the target business is a public or private one.”

The Corporate Offence will require all corporations to treat bribery as a serious issue and
compel them to establish systems to prevent bribery on their behalf.

They will be expected to have in place:
• a clear statement acknowledging Board responsibility for the anti-corruption programme
• risk assessment provisions
• clear policies and procedures requirements
• appropriate implementation provisions
• provisions dealing with due diligence, and relationships with business partners
• monitoring and review of actions/conduct

“Many companies will already have some of these in place,“ said Pickin, “but it is important to recognise that no one size fits all.

“Well advised companies are now reviewing their policies and procedures and considering how they might need to amend/supplement these to deal with the adequate procedures requirements.

“Every company will be different, and must consider factors such as:
• level of risk the company faces
• the geography in which it operates
• internal and external culture
• what is considered acceptable in the markets it operates in
• whether it has large scale contracts and key account relationships
• the role of introducers/intermediaries
• the role of government contracts
• who in the business is particularly exposed to risk in relation to the making of/receipt of gifts?

Pickin said: “Businesses must understand the new law, consider the policies they already have in place, and look at ways to make it clear to employees what is and is not acceptable.”

For further information please contact:
Name: Alastair Gray
Phone: 03700 864096
Email: Alastair.Gray@shoosmiths.co.uk

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