After a number of postponements, the UK Ministry of Justice has finally issued its guidance on the UK Bribery Act, which clarifies and establishes a number of standards. But there are some areas of concern not covered, most noticeably the stance on organizations based outside the UK that conduct business within the commonwealth. The law goes into effect July 1, so companies have three months to clean up their business practices (where needed) to make sure they’re adequately safe-guarded. In short, the guidance addresses the scope of the legislation, how your company can be held liable for your employees’ actions, how suppliers and vendors are addressed under the law, and the differences between hospitality (not deemed as bribery, for the most part) and facilitation (deemed as bribery).
The other big ticket item addressed (and some would say, not in nearly enough detail) by the UK MoJ in the guidance has to do with “adequate procedures,” which basically refers to what your organization needs to do to deter bribery and therefore protect itself. In its short-form of the guidance, the MoJ says “adequate will depend on the bribery risks you face and the nature, size and complexity of your business.” The MoJ goes on to address six principles related to adequate procedures, including: 1) proportionality (size and scope of business); 2) executive commitment and involvement; 3) risk assessment and 4) due diligence, which balance off one another; 5) communication and awareness; and 6) ongoing monitoring and review. It’s Interesting, too, that the Act won’t require external verification of bribery prevention measures, putting the responsibility squarely on the companies themselves. And while the Act does not require external review, it still may not be a bad idea to gain a third-party assessment. Many organizations could already be covered, with only a few tweaks, by their current anti-corruption/FCPA programs.
The statement from Justice Secretary Kenneth Clarke said that the financial impact of the Act on business was duly considered and should be very small. “We don’t have to decide between tackling corruption and supporting growth. Addressing bribery is good for business because it creates the conditions for free markets to flourish.” I agree, totally. And now, UK organizations, and for good measure, those non-UK companies operating within its borders, have until summer to get their “adequate procedures” – things like codes of conduct, hotline and incident management systems, training and awareness programs, refined policies and procedures, risk assessment methodologies, and updated auditing processes – up to the task.