- Implementation of U.K. Bribery Act Delayed Until April 2011
- August 17, 2010 | Author: Raymond Banoun
- Law Firm: Cadwalader, Wickersham & Taft LLP - Washington Office
The U.K. Ministry of Justice announced on July 20, 2010, that the recently enacted Bribery Act of 2010 would not come into force until April 2011, a delay of several months designed to allow a "short consultation exercise," beginning in September, to develop "guidance about procedures which commercial organisations can put in place to prevent bribery on their behalf." Official guidelines are to be published in early 2011, followed by "an adequate familiarization period," before the Act enters into force in April.1
The Ministry's consultation exercise and promise to issue guidance are of particular importance in light of the fact that the new law punishes not only bribery itself, but also the failure of commercial organizations to prevent bribery. This novel offense could apply when an employee or agent of a company bribes another person in connection with the company's business, and the company negligently fails to prevent the bribe.2 The offense of "failure to prevent bribery" applies to U.K. entities, as well as foreign companies that conduct business in the United Kingdom.3 However, the Act provides an affirmative defense for companies that demonstrate the existence of "adequate procedures designed to prevent" prohibited payments.4 In addition, the act calls for the Secretary of State to provide guidance as to what would constitute "adequate procedures" under the law.
In light of the new law's expansiveness and the importance of the "adequate procedures" defense, companies subject to the Act should welcome the opportunity to provide their comments to the Ministry. However, no one should expect the Ministry to issue a comprehensive checklist of preventative measures, as it has cautioned that its guidance will set out "broad principles and illustrative good practice examples of 'adequate procedures' rather than detailed and prescriptive standards."5 As a result, companies should not await the guidance to begin adopting or revising existing compliance policies and procedures. Instead, they should promptly identify potential internal control and compliance weaknesses, and implement remedial measures well in advance of the Act's entry into force in April 2011.
1 See "Bribery Act implementation," available at http://www.justice.gov.uk/news/newsrelease200710a.htm.
2 See U.K. Bribery Act, 2010, §§ 7-8.
3 See U.K. Bribery Act, 2010, § 7(5).
4 See U.K. Bribery Act, 2010, § 7(2).
5 See "Government Response to the Conclusions and Recommendations of the Joint Committee Report on the Draft Bribery Bill," available at http://www.justice.gov.uk/publications/docs/draft-bribery-joint-cttee-govt-response.pdf.