Who are associated persons under the Bribery Act 2010?
Back in March 2011 the Ministry of Justice published their much anticipated revised guidance on the Bribery Act 2010 (“Act”) and in July 2011 the Act came into force.
The Act was brought in to extend the UK’s law against bribery by covering bribery within private sector transactions (prior to the Act UK bribery offences were confined to transactions involving public officials and agents).
Enforcement of the Act is applied as a strict liability offence, whereby only the conduct needs to be proven. Organisations and individuals found guilty of the Act could be subject to an unlimited amount of fines; and individuals could also be sentenced up to 10 years’ of imprisonment.
Who are persons associated?
Section 7 of the Act attracts the most attention for commercial organisations, as it places a burden on commercial organisations to prevent any person associated with them from bribing another person on the organisation’s behalf.
The Act’s provision of – “persons associated” – is quite far-reaching and would include instances where a commercial organisation takes on third party services, such as an agent or distributor. When an associated person is taken on and that associated person bribes another in order to obtain or retain business, or to obtain an advantage in the conduct of business, for the instructing commercial organisation an offence will have occurred under the Act.
A commercial organisation may avail itself of a statutory defence if it can show, on the balance of probabilities, that it has “adequate procedures” in place to prevent bribery on its behalf. As such, commercial organisations that fall under this Act should have in place a Code of Conduct (including an anti-bribery policy) that deals with the risks and sets out practical rules for its staff and third party agents, representatives etc. to comply with.
Under the Act the nationality or residence of the briber or of any intermediaries involved is irrelevant. Due to the extra-territorial reach of the Act there is scope for both UK companies operating overseas and foreign companies with operations in the UK being captured under the Act.
Tips to reduce your risk
Here are some top tips for Commercial organisations that are looking to take on third parties (associated persons):
- Have a code of conduct in relation to anti-bribery and anti-corruption in place for all staff and third party agents, representatives etc.
- Have adequate provisions entrenched in all contracts, which highlight the need for compliance with the Bribery Act 2010.
- Conduct risk assessments and due diligence before instructing a third party.
- Continue to monitor and review third party actions after instructing them.
- Educate all staff on the issues and risks associated to the Bribery Act 2010.
- Have company procedures and safe-guards in place to prevent bribery.
Harpreet Sandhu is a Partner and Solicitor in the Commerce & Technology Group at Nelsons Solicitors. Harpreet can be contacted by email at Harpreet.Sandhu@nelsonslaw.co.uk or telephoned on 0800 028 2049 for further information about appointing agents and distributors.
Harpreet will be speaking at both EMITA’s events as part of the Leicester Business Festival as well as on EMITA’s first webinar scheduled to take place on the 23rd January 2018. Please visit EMITA’s website for further details under ‘EMITA Events’.