The United Kingdom Issues Much Anticipated Consultation on Guidance for the Bribery Act’s “Adequate Procedures” Defense

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In April 2010, the United Kingdom passed the Bribery Act, which created several new anti-corruption offenses. Of particular note, the Bribery Act included a new “strict liability” offense that imposes liability on any company with ties to the U.K. that fails to prevent persons performing services on its behalf (including employees, agents, subsidiaries, and possibly subcontractors and vendors, among others) from engaging in bribery. Provided the government can prove the underlying offense, the only way to avoid liability is to establish an “adequate procedures” defense.

Last week, the U.K. Secretary of State, through the Ministry of Justice, released its much anticipated “Consultation on Guidance,” setting forth its views on what constitutes “adequate procedures.”1 As a procedural matter, the draft guidance provides a public comment period that will close on November 8, 2010 and forecasts that final guidance will issue in early 2011, in advance of the Bribery Act becoming effective in April 2011.

Substantively, the draft guidance consists of “six broad management principles” that are designed to help companies determine what specific procedures they can put into place to minimize the risk of bribery. In the guidance, the Secretary of State notes, however, that these six principles “do not propose any particular procedures in themselves,” but instead should “be used as a flexible guide to deciding what procedures are right for an organisation.” The six principles for bribery prevention specified in the guidance are:

• Risk assessment – this is about knowing and keeping up to date with the bribery risks you face in your sector and market;

• Top level commitment – this concerns establishing a culture across the organisation in which bribery is unacceptable. If your business is small or medium sized this may not require much sophistication but the theme is making the message clear, unambiguous and regularly made to all staff and business partners;

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