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An introductory guide to the Bribery Act

Is the Act in force yet?
No. The Act received Royal Assent on 8 April 2010 and, after some delay, is now planned to come into force on 1 July 2011.

April 2011

Acts and to enable the Government to tackle bribery more effectively.

In brief, what does the Act do?

The Act clarifies offences of bribing another person, and of being bribed. It brings in new offences of bribing foreign public officials, and the failing of commercial organisations to prevent bribery a new corporate offence. It also provides for prosecutions and heavy penalties against those breaching the legislation. From a business perspective, probably the most troubling aspect of the Act is that commercial organisations will be guilty of an offence if they fail to prevent bribery. For organisations dealing with foreign public sectors, section 6 of the Act is particularly troublesome because the new offence of bribery of a foreign public official is very widely drafted. The offence in this section has no requirement that any influence of the foreign public official be corrupt, improper or dishonest and so many actions ordinarily considered to be appropriate are likely to be caught. Recent guidance has, however, provided a degree of reassurance. The Act prohibits all bribes. This includes facilitation payments, generally seen as smaller payments demanded by providers of services in certain countries to facilitate services such as connecting a telephone or obtaining a visa. Certain countries, such as the US, have robust anti-corruption legislation (the Foreign Corrupt Practices Act), but carve-out facilitation payments, thereby permitting them. The Bribery Act 2010 is drafted without any facilitation payments carve out. As such they will be treated as bribes. Recent guidance has confirmed that such payments will be "bribes", however the guidance also indicates that a somewhat less rigid approach will be taken by enforcement agencies. Unfortunately, organisations and individuals will have to rely upon the discretion of enforcement agencies and this is not ideal. The full Act is available at: http://www.opsi.gov.uk/acts/acts2010/pdf/ukpga_2010 0023_en.pdf We have set out the text of key provisions of the Act, together with a brief commentary on them, at Appendix 1 to this Introductory Guide.

If the Act is not in force yet can you ignore it?

No. As the Act will come into force within the next three months, in July 2011. You should use this time to put in place appropriate procedures to limit your exposure. See below.

Why has the Act been brought in?

The UK has, for some time, been criticised by the international business community for not addressing corruption appropriately. The Organisation for Economic Cooperation and Development (OECD) is the international organisation supported by most developed countries with the aim of encouraging free trade. The OECD stands strongly against corruption and its convention against bribery came into effect in 1999. Transparency International (TI) is an independent global coalition against corruption. Both OECD and TI have long been critical of the UK's failure to properly tackle corruption. The OECD has been disappointed and seriously concerned about the UKs failure to improve the countrys position on corruption. TIs Progress Report of 2008 into the OECD Anti-Bribery Convention found that there was little or no enforcement in the UK. TI cite that despite carrying out some twenty investigations, the UK had not brought forward one single case. That position was exacerbated by the UKs termination of the investigation of bribery allegations against BAE Systems on the Al Yamamah project - the OECD were highly critical and TI described this as a setback for the Convention. One of the problems that the UK has faced was that it had a legacy of old, disjointed and often ineffective legislation. The law was embodied in legislation including the Public Bodies Corrupt Practices Act 1889, and the Prevention of Corruption Acts of 1906 and 1916. The new Bribery Act 2010 has been brought in to replace these earlier

What are the consequences of breaching the In addition to setting out the Government policy, the Guidance provides six principles and a series of case Act?
Penalties include criminal conviction with fines and imprisonment of up to 10 years. Senior officers of companies and partnerships can be personally liable if offences are committed with their consent or connivance. Depending upon the business sector, official Regulators may also be able to impose fines under pre-existing legislation. Organisations convicted of corruption could also be permanently debarred from tendering for public sector contracts under the Public Contracts Regulations 2006. Business reputation is increasingly important in the commercial world, and a conviction under the Act could be very damaging. Even if a party is ultimately found to be not guilty, a prosecution under the Act is likely to adversely affect the reputation of any business and organisations will wish to ensure that they do not draw adverse media attention in this regard. If bribes have been paid, or if an organisation has concerns that they have been paid, organisations will need to be aware of their obligations under the Proceeds of Crime Act 2002 and under the Money Laundering Regulations. The legislation will likely require that a Suspicious Activity Report is submitted to the Serious Organised Crime Agency.

studies intended to help organisations put in place adequate anti-bribery procedures. The Ministry has also produced a shorter "Quick start guide".

In parallel with the Ministry of Justice publishing its Guidance, the Serious Fraud Office has also published guidance regarding prosecutions. This provides some useful insight into how the Serious Fraud Office will treat offences. The Serious Fraud Office guidance is available at: http://www.sfo.gov.uk/media/167348/bribery%20act% 20joint%20prosecution%20guidance.pdf

Adequate procedures
Now that the final Guidance is available, it is recommended that organisations start to put in place procedures as early as possible. In summary, the final Guidance sets out six principles for bribery prevention and these are set out here, and commented on in more detail below. The Guidance explains that the six principles are general principles only and that the principles are outcome-focussed and flexible. The six principles in the Guidance are: Proportionate Procedures A commercial organisations procedures to prevent bribery by persons associated with it are proportionate to the bribery risks it faces and to the nature, scale and complexity of the commercial organisations activities. They are also clear, practical, accessible, effectively implemented and enforced. Top level commitment The top level management of a commercial organisation (be it a board of directors, the owners or any other equivalent body or person) are committed to preventing bribery by persons associated with it. They foster a culture within the organisation in which bribery is never acceptable. Risk assessment The commercial organisation assesses the nature and extent of its exposure to potential external and internal risks of bribery on its behalf by persons associated with it. The assessment is periodic, informed and documented. Due diligence The commercial organisation applies due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organisation, in order to mitigate identified bribery risks. Communication (including training) The commercial organisation seeks to ensure that its bribery prevention policies and procedures are embedded and understood throughout the organisation through internal and external communication, including training, that is proportionate to the risks it faces.

What should you do?

All organisations will need to respond to the new Act. Although the section 7 offence of failing to prevent bribery applies only to commercial organisations, other aspects of the Act apply equally to the public and private sector. Initially some commentators suggested that this section of the Act was not intended to apply to public sector bodies. However, recent guidance makes clear that the section is to apply to any body engaging in commercial activities. With the Localism Bill progressing through Parliament there is some likelihood that more local authorities will trade certain of their services and so there is potential for section 7 to impact the public sector significantly. There is a statutory defence to the section 7 offence for organisations having 'adequate procedures' to prevent bribery, so it is vital that organisations take steps to review existing policies and procedures, or implement new ones. Recently, on 30 March 2011, the Ministry of Justice published the long overdue final version of its Guidance "The Bribery Act 2010 - Guidance about procedures which relevant commercial organisations can put in place to prevent persons associated with them from bribing (section 9 of the Bribery Act 2010)". The full Guidance is available at: http://www.justice.gov.uk/guidance/docs/bribery-act2010-guidance.pdf

Monitoring and review The commercial organisation monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.

The Guidance now stresses commitment to a zero tolerance approach to bribery from the top of the organisation.

Risk assessment
Depending upon relevant risk factors, some organisations will need to do more than others to properly protect themselves. Organisations will wish to consider a wide range of matters in determining their risk exposure and how they should respond to the Act. These will include the following areas: Country risk - If your organisation operates internationally, examine the countries worked in. TI produces annual reports, including a Corruption Perceptions Index, ranking countries records for corruption. For example, New Zealand, Denmark, Singapore and Sweden gain best marks; worst marks go to Iraq, Sudan, Myanmar, Afghanistan and Somalia. The lower the ranking of the country, the more you will wish to ensure that appropriate anti-bribery measures are in place. Sectoral risk - Certain sectors of the economy are more susceptible to bribery than others. TI, the independent global coalition against corruption, produces an annual Bribe Payers Index. The index ranks the various sectors examined. Top 5 worst sectors for bribery are: public works contracts and construction; real estate and property development; oil and gas; heavy manufacturing; mining. Organisations operating in these areas will want to be better prepared at stopping bribery. A full listing of the Bribe Payers Index is available at www.transparency.org Transaction risk - Consider the types of transaction that your organisation is involved in and how your products or services are procured. Do these create an environment where there are increased opportunities for bribery or an enhanced likelihood that bribery will occur? For example, procurement and supply chain management are areas where bribery is widely reported. If your organisation is involved in making charitable or political donations, again corruption can occur. Also, where licences, permits or other approvals are required there can be temptations to seek or give bribes. Business opportunity risk - the Guidance indicates that such risks might arise in high value projects or in projects involving many contractors or intermediaries. Also, where projects are not apparently undertaken at market prices or where projects do not have clear legitimate objectives this should give rise to a need for closer scrutiny. Business partnership risk if your organisation operates with other business partners, you will wish to ensure that they also operate adequate anti-bribery procedures. This will include contractors, consultants, agents and joint venture partners, particularly if

Proportionate procedures
This principle was newly introduced into the final Guidance and proportionality is a new theme throughout. Key points include the following: Adequate bribery prevention procedures ought to be proportionate to the bribery risks that the organisation faces. The initial risk assessment is therefore important as this will inform the scale of bribery prevention procedures required. The level of risk that an organisation faces will depend upon a number of factors including: size; nature; complexity of business; and type and nature of persons doing business with it. Helpfully, there is now a recognition that applying procedures retrospectively is not straightforward and the Guidance indicates that new procedures should be put in place over time adopting a risk-based approach and with due allowance for what is practicable and the level of control over existing arrangements. The Guidance provides an indication of what might be included within appropriate bribery prevention procedures.

Top level commitment

It is vital that any procedures to counter bribery are visibly and actively promoted from the very top of your organisation. Your Chief Executive, Managing Director or Senior Partner should actively demonstrate their own personal commitment to anti-corruption procedures. There needs to be a clear and unambiguous commitment to counter bribery from the very top, through the entire senior management team. The commitment must be seen as being genuine and not merely ticking the box or going through the motions. Junior employees have to have a genuine belief that senior management are committed to an anti-bribery culture. The response of senior management to alleged and actual breaches of internal policies and procedures will be of paramount importance. Policies must be enforced, and be seen to be enforced. Top-level management will be involved in communicating the organisation's anti-bribery stance and involvement in developing bribery prevention procedures.

operating in high risk jurisdictions or in high risk sectors or when having dealings with foreign public officials. You should consider requiring that any contracts with business partners secure their commitment to antibribery procedures and provide for appropriate review and reporting. It is important that organisations put in place ongoing risk reviews and monitoring and that this is not treated as a one off.

encouraged to raise concerns to the appropriate managers without fear. The encouragement of internal reporting is a key to establishing good anti-bribery procedures. In terms of external communications, organisations will wish to promote their policies and procedures with statements or codes of conduct. This has the advantage of reassuring those that organisations already deal with and demonstrates to new clients and contacts that the organisation takes anti-bribery seriously and is committed to operating with a zero-tolerance approach to bribery. Effective procedures will encompass training, and the level of training will vary depending upon the risk assessment and any identified approach required for the commercial organisation. The Guidance emphasises that the level of training will need to be proportionate to risks identified. The type of training and level of training will vary depending upon perceived risks. It will not be sufficient to have "one off" training, and training is likely to need to be continuous, regularly monitored and evaluated. Depending upon the nature of potential risks, it may be appropriate to have associated persons participate in anti-bribery training also.

Due diligence
The Guidance indicates that due diligence is firmly established as an element of corporate good governance and it is envisaged that due diligence related to bribery prevention will often form part of a wider due diligence framework. The aim of this principle is to encourage commercial organisations to put in place due diligence procedures that adequately inform the application of proportionate measures designed to prevent persons associated with them from bribing on their behalf. The Guidance recognises that an organisation may not have full skills internally, and so due diligence procedures can be undertaken internally or by external consultants. The Guidance also recognises that the appropriate level of due diligence to prevent bribery will vary enormously depending on the risks arising from the particular relationship. It points out that particular care is needed when entering in to certain business relationships and gives as an example a situation where local law or convention dictates the use of local agents in circumstances where it may be difficult for a commercial organisation to extricate itself from a business relationship once established. It also notes that there are important due diligence implications in relation to the merger of commercial organisations or the acquisition of one by another.

Monitoring and review

Once appropriate policies and procures are in place, the Guidance recommends that organisations monitor and review their effectiveness and also the need to review and revise policies and procedures. The Guidance is clear that organisation cannot simply put a series of policies and procedures in place and leave these on the shelf. Once drafted, policies and procedures are to be live documents that develop and evolve over time. Risks that commercial organisations face will change over time and so it will be important to reassess whether or not policies, procedures and approach is still valid. Further, the landscape around bribery and anti-bribery approaches is likely to develop significantly once the Act is in force. For example, we can expect to see regular questions as to organisations' anti-bribery policies and procedures in Pre Qualification Questionnaires, or when organisations are in tender negotiations. Organisations may well need to react and respond to these new developments. The Guidance refers to various factors influencing the need to monitor, review and evaluate amending an organisations approach. These include: internal financial controls; staff surveys and questionnaires; feedback from training; periodic review from top-level management and new information from relevant trade bodies and regulators.

Communication (including training)

This principle focuses on the commercial organisation ensuring that bribery prevention policies and procedures are embedded and understood throughout the organisation through internal and external communication, including training, that is proportionate to the risks it faces. This is about enhancing awareness and deterring wrongful acts. The Guidance recognises that the content, language and tone of internal communications may well need to be very different from those for external communications. Further, the nature of communication will vary enormously between commercial organisations in accordance with the different bribery risks faced, the size of the organisation and the scale and nature of its activities. It is important that internal communications convey the "tone from the top" and focus on the implementation of policies and procedures, particularly on employees. It is also important to establish internal reporting, or "whistleblowing", procedures so that employees can be

Further information
If you would like any further information relating to the Bribery Act 2010, or help with carrying out a risk assessment or setting up procedures, please contact: Richard Cooke 01245 211375 | richard-cooke@birketts.co.uk Leah Finnegan 01473 406275 | leah-finnegan@birketts.co.uk

Introductory Guide published April 2011.

The information provided in this guide is only intended to provide a general overview. It does not purport to be comprehensive or to provide legal or other advice. It is not a substitute for obtaining specific advice on any particular facts. Birketts accepts no responsibility for any loss which may arise from reliance on information contained in this guide or those sites to which links are provided. Birketts LLP 2011

Birketts LLP For a full list of our services see www.birketts.co.uk

Registered office: 24-26 Museum Street Ipswich IP1 1HZ t 01473 23 23 00 f 01473 23 05 24 Kingfisher House 1 Gilders Way Norwich NR3 1UB t 01603 23 23 00 f 01603 23 05 33 Daedalus House Thirty Station Road Cambridge CB1 2RE t 01223 32 66 00 f 01223 32 66 29 Brierly Place New London Road Chelmsford CM2 0AP t 01245 21 12 11 f 01245 35 47 64

Birketts 2011. Regulated by the Solicitors Regulation Authority. Birketts LLP is constituted as a limited liability partnership in accordance with the Limited Liability Partnerships Act 2000. Where we refer to a partner of Birketts LLP, whether in this document or in any other correspondence or communication with you, the term partner means a member of Birketts LLP, and shall not be construed as indicating that the members of Birketts LLP are carrying on in business in partnership within the meaning of the Partnership Act 1890.

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Appendix 1 - Key provisions of the Act

What are the main offences? Bribing another person
The Act sets out at section 1 the offences of bribing another person: Offences of bribing another person A person (P) is guilty of an offence if either of the following cases applies: Case 1 is where: P offers, promises or gives a financial or other advantage to another person; and P intends the advantage: - to induce a person to perform improperly a relevant function or activity; or - to reward a person for the improper performance of such action or activity. Case 2 is where: (a) P offers, promises or gives a financial or other advantage to another person; and (b) P knows or believes that the acceptance of the advantage would itself constitute the improper performance of a relevant function or activity. At section 1(4), the Act is clear that: In case 1 it does not matter whether the person to whom the advantage is offered, promised or given is the same person as the person who is to perform, or has performed, the function or activity concerned. At section 1(5), the Act states: In cases 1 and 2 it does not matter whether the advantage is offered, promised or given by P directly or through a third party. Commentary on Section 1 A person can be an individual, a body corporate or a Scottish partnership. The term relevant function or activity is explained at section 3 of the Act: Function or activity to which bribe relates For the purposes of this Act a function or activity is a relevant function or activity if: (a) it falls within subsection (2); and (b) meets one or more of conditions A to C. The following functions and activities fall within this subsection (a) (b) (c) (d) any function of a public nature; any activity connected with a business; any activity performed in the course of a persons employment; any activity performed by or on behalf of a body of persons (whether corporate or unincorporate).

Condition A is that a person performing the function or activity is expected to perform it in good faith. Condition B is that a person performing the function or activity is expected to perform it impartially.

 Condition C is that a person performing the function or activity is in a position of trust by virtue of performing it. A function or activity is a relevant function or activity even if it: (a) has no connection with the United Kingdom; and (b) is performed in a country or territory outside the United Kingdom. The term relevant function or activity therefore includes both public sector and private sector functions and activities. The term improper performance is explained at section 4 of the Act Sections 1(4) and 1(5) cut out potential loopholes. Section 1(4) stops defences where P says that the advantage was to another person, not the person who performs the relevant function or activity. Section 1(5) stops defences where P gets a third party to make an offer, promise or gift of an advantage.

Being bribed
The Act sets out at section 2 the offences relating to being bribed: Offences relating to being bribed A person (R) is guilty of an offence if any of the following cases applies. Case 3 is where R requests, agrees to receive or accepts a financial or other advantage intending that, in consequence, a relevant function or activity should be performed improperly (whether by R or another person). Case 4 is where: (a) R requests, agrees to receive or accepts a financial or other advantage; and (b) the request, agreement or acceptance itself constitutes the improper performance by R of a relevant function or activity. Case 5 is where R requests, agrees to receive or accepts a financial or other advantage as a reward for the improper performance (whether by R or another person) of a relevant function or activity. Case 6 is where, in anticipation of or in consequence of R requesting, agreeing to receive or accepting a financial or other advantage, a relevant function or activity is performed improperly: (a) by R; or (b) by another person at Rs request or with Rs assent or acquiescence. In cases 3 to 6 it does not matter: (a) whether R requests, agrees to receive or accepts (or is to request, agree to receive or accept) the advantage directly or through a third party; or (b) whether the advantage is (or is to be) for the benefit of R or another person. In cases 4 to 6 it does not matter whether R knows or believes that the performance of the function or activity is improper. In case 6, where a person other than R is performing the function or activity, it also does not matter whether that person knows or believes that the performance of the function or activity is improper. Commentary on Section 2 Again the term relevant function or activity is explained at section 3 of the Act, see above. Sections 2(6), 2(7) and 2(8) cut out potential loopholes. Section 2(6) stops defences where R deals with a third party or where R procures the advantage for another person. Section 2(7) makes clear that in cases 4 to 6, it does not matter whether or not R knows or believes that the performance of the function or activity is improper. As section 2(7) does not refer to case 3, it would appear that R does have to know or believe that the performance of the function or activity is improper under case 3. Section 2(8) makes clear that in case 6 scenarios, where someone other than R performs the function or activity, their knowledge or belief that performance of the function or activity is improper is not relevant.

Bribery of foreign public officials

The Act sets out at section 6 the offence of bribery of a foreign public official: Bribery of foreign public officials A person (P) who bribes a foreign public official (F) is guilty of an offence if Ps intention is to influence F in Fs capacity as a foreign public official. P must also intend to obtain or retain. P bribes F if, and only if: (a) directly or through a third party, P offers, promises or gives any financial or other advantage: (i) to F; or (ii) to another person at Fs request or with Fs assent or acquiescence; and (b) F is neither permitted nor required by the written law applicable to F to be influenced in Fs capacity as a foreign public official by the offer, promise or gift. References in this section to influencing F in Fs capacity as a foreign public official mean influencing F in the performance of Fs functions as such an official, which includes: (a) any omission to exercise those functions; and (b) any use of Fs position as such an official, even if not within Fs authority. Foreign public official means an individual who: (a) holds a legislative, administrative or judicial position of any kind, whether appointed or elected, of a country or territory outside the United Kingdom (or any subdivision of such a country or territory); (b) exercises a public function: (i) for or on behalf of a country or territory outside the United Kingdom (or any subdivision of such a country or territory); or (ii) for any public agency or public enterprise of that country or territory (or subdivision); or (c) is an official or agent of a public international organisation. Public international organisation means an organisation whose members are any of the following (a) (b) (c) (d) countries or territories; governments of countries or territories; other public international organisations; a mixture of any of the above.

For the purposes of subsection (3)(b), the written law applicable to F is (a) where the performance of the functions of F which P intends to influence would be subject to the law of any part of the United Kingdom, the law of that part of the United Kingdom; (b) where paragraph (a) does not apply and F is an official or agent of a public international organisation, the applicable written rules of that organisation; (c) where paragraphs (a) and (b) do not apply, the law of the country or territory in relation to which F is a foreign public official so far as that law is contained in: (i) any written constitution, or provision made by or under legislation, applicable to the country or territory concerned;or (ii) any judicial decision which is so applicable and is evidenced in published written sources. For the purposes of this section, a trade or profession is a business. Commentary on Section 6 Whereas offences under section 1 and section 2 require there to be an improper performance of a relevant function, section 6 takes a different approach. The term foreign public official is widely defined by section 6(5). One of the definitions is by reference to a public international organisation which itself is defined at section 6(6). Under section 6(3), bribe is defined widely. It includes an offer, promise or gift of a financial or other advantage.

A person who bribes a foreign public official can be guilty of an offence under section 6 if they have an intention to influence a foreign official acting in that capacity and they intend to obtain or retain business, or obtain or retain an advantage in the conduct of business. There is no requirement here that the intention be corrupt, improper or dishonest. This drafting is therefore potentially problematic. For example: Say, P wishes to sell a new product or process to country X. That country may require that a representative sees an example of the product/process in operation. The only operating product/process is in the UK. P organises for a foreign public official to visit the UK to examine the product/process in operation. The visit involves providing reasonable transport, stay for a reasonable period of time in a reasonable hotel without inappropriate or excessive expenditure. Under pre-Bribery Act 2010 legislation such an action by P would not be unlawful, and that would be the position under most jurisdictions. There is nothing corrupt, improper or dishonest if P organises that a foreign public official visits a country to examine a product/process. However, by reference to the Bribery Act 2010: Ps intention is to influence the foreign public official in that capacity. P also intends to obtain or retain business. Alternatively, P intends to obtain or retain an advantage in the conduct of business. By section 6(3), P will have given a financial or other advantage. Therefore, technically all relevant elements exist and P will have committed an offence. By section 7, the commercial organisation will have failed to prevent bribery and will have committed an offence. By section 14, the organisations senior officers may also have committed an offence. The recent Guidance addresses this, in part. Section 26 of the Guidance states that the Government does not intend for the Act to prohibit reasonable and proportionate hospitality and promotional or other similar business expenditure intended for these purposes. Section 27 goes on to indicate that "In order to amount to a bribe under section 6 there must be an intention for a financial or other advantage to influence the official in his or her official role and thereby secure business or a business advantage. In this regard, it may be in some circumstances that hospitality or promotional expenditure in the form of travel and accommodation costs does not even amount to a financial or other advantage to the relevant official because it is a cost that would otherwise be borne by the relevant foreign Government rather than the official him or herself." It will be interesting to monitor how the enforcement agencies operate in practice, and if this guidance provide adequate comfort to organisations.

Failure of commercial organisations to prevent bribery

The Act sets out at section 7 the offence of the failure of a commercial organisation to prevent bribery: Failure of commercial organisations to prevent bribery A relevant commercial organisation (C) is guilty of an offence under this section if a person (A) associated with C bribes another person intending: (a) to obtain or retain business for C; or (b) to obtain or retain an advantage in the conduct of business for C. But it is a defence for C to prove that C had in place adequate procedures designed to prevent persons associated with C from undertaking such conduct. For the purposes of this section, A bribes another person if, and only if, A: (a) is, or would be, guilty of an offence under section 1 or 6 (whether or not A has been prosecuted for such an offence); or (b) would be guilty of such an offence if section 12(2)(c) and (4) were omitted. See section 8 for the meaning of a person associated with C and see section 9 for a duty on the Secretary of State to publish guidance. In this section: partnership means (a) a partnership within the Partnership Act 1890; or (b) a limited partnership registered under the Limited Partnerships Act 1907; or (c) a firm or entity of a similar character formed under the law of a country or territory outside the United Kingdom.

relevant commercial organisation means: (a) a body which is incorporated under the law of any part of the United Kingdom and which carries on a business (whether there or elsewhere); (b) any other body corporate (wherever incorporated) which carries on a business, or part of a business, in any part of the United Kingdom; (c) a partnership which is formed under the law of any part of the United Kingdom and which carries on a business (whether there or elsewhere); or (d) any other partnership (wherever formed) which carries on a business, or part of a business, in any part of the United Kingdom, and, for the purposes of this section, a trade or profession is a business. Commentary on Section 7 The term relevant commercial organisation is widely defined within section 7(5). The term associated person is widely defined at section 8, below. Section 7(1) is a strict liability offence that a relevant commercial organisation is guilty of an offence if any associated person commits an offence under section 1 or section 6. The relevant commercial organisation does not need to be culpable and there is no requirement for any intended dishonesty, or knowledge, for the strict liability offence to have been committed. If a section 1 or section 6 offence has been committed, the only defence to section 7(1) is that the relevant commercial organisation has put in place adequate procedures designed to prevent associated persons from making bribes (section 7(2)).

Meaning of associated person

The Act sets out at section 8 the meaning of associated person: Meaning of associated person For the purposes of section 7, a person (A) is associated with C if (disregarding any bribe under consideration) A is a person who performs services for or on behalf of C. The capacity in which A performs services for or on behalf of C does not matter. Accordingly A may (for example) be Cs employee, agent or subsidiary. Whether or not A is a person who performs services for or on behalf of C is to be determined by reference to all the relevant circumstances and not merely by reference to the nature of the relationship between A and C. But if A is an employee of C, it is to be presumed unless the contrary is shown that A is a person who performs services for or on behalf of C.

Guidance about commercial organisations preventing bribery

The Act sets out at section 9 guidance about how commercial organisations may prevent bribery: Guidance about commercial organisations preventing bribery The Secretary of State must publish guidance about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing as mentioned in section 7(1). The Secretary of State may, from time to time, publish revisions to guidance under this section or revised guidance. The Secretary of State must consult the Scottish Ministers before publishing anything under this section. Publication under this section is to be in such manner as the Secretary of State considers appropriate. Expressions used in this section have the same meaning as in section 7. Commentary on Section 9 The guidance referred to in section 9 is "The Bribery Act 2010 - Guidance about procedures which relevant commercial organisations can put in place to prevent persons associated with them from bribing (section 9 of the Bribery Act 2010)" published by the Ministry of Justice on 30 March 2011.

Offences under sections 1, 2 and 6 by bodies corporate etc. This section applies if an offence under section 1, 2 or 6 is committed by a body corporate or a Scottish partnership. If the offence is proved to have been committed with the consent or connivance of: (a) a senior officer of the body corporate or Scottish partnership; or (b) a person purporting to act in such a capacity, the senior officer or person (as well as the body corporate or partnership) is guilty of the offence and liable to be proceeded against and punished accordingly. But subsection (2) does not apply, in the case of an offence which is committed under section 1, 2 or 6 by virtue of section 12(2) to (4), to a senior officer or person purporting to act in such a capacity unless the senior officer or person has a close connection with the United Kingdom (within the meaning given by section 12(4)). In this section: director, in relation to a body corporate whose affairs are managed by its members, means a member of the body corporate. senior officer means: (a) in relation to a body corporate, a director, manager, secretary or other similar officer of the body corporate; and (b) in relation to a Scottish partnership, a partner in the partnership. Commentary on Section 14 Section 14(2) provides that where a senior officer, or a person purporting to act in such a capacity consents or connives in the committing of a section 1, section 2 or section 6 offence, then he too is guilty of an offence. This Appendix addresses key provisions of the Act only. These key provisions will need to be interpreted within the context of the whole Act. The full Act is available at http://www.opsi.gov.uk/acts/acts2010/pdf/ukpga_20100023_en.pdf.

Birketts LLP For a full list of our services see www.birketts.co.uk

Registered office: 24-26 Museum Street Ipswich IP1 1HZ t 01473 23 23 00 f 01473 23 05 24 Kingfisher House 1 Gilders Way Norwich NR3 1UB t 01603 23 23 00 f 01603 23 05 33 Daedalus House Thirty Station Road Cambridge CB1 2RE t 01223 32 66 00 f 01223 32 66 29 Brierly Place New London Road Chelmsford CM2 0AP t 01245 21 12 11 f 01245 35 47 64

Birketts 2011. Regulated by the Solicitors Regulation Authority. Birketts LLP is constituted as a limited liability partnership in accordance with the Limited Liability Partnerships Act 2000. Where we refer to a partner of Birketts LLP, whether in this document or in any other correspondence or communication with you, the term partner means a member of Birketts LLP, and shall not be construed as indicating that the members of Birketts LLP are carrying on in business in partnership within the meaning of the Partnership Act 1890.