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Bribery Act Essentials for 2012 CICES 28 February 2012 Barry Vitou & Neil McInnes Outline • What is a bribe? • What is the new law? – Key provisions – ‘Adequate Procedures’ defence • How do you identify your corruption risks? • Specific issues and hot topics – Gifts and Hospitality – Facilitation Payments • What are the regulators up to? Spotting bungs • Serious Fraud Office cases – The “after sales service fee” – The “Professional Education” fund – Gifts to spouses – Offshore structures and agents • Closer to home – “10 x £50” notes – An electronics gadget – A family holiday to Italy – Getting the house re-wired • SFO Corruption Indicators Bribery Act on a page • In force 1 July 2011 – wide jurisdictional reach • Corporate offence of failure to prevent bribery – Associated person liability – Defence of adequate procedures • Other offences replace existing UK corruption laws: – Bribing another person – Being bribed – Bribing a foreign public official – Director and Senior Officer liabilities • A commonsense definition? • Sentencing powers, Proceeds of Crime, debarment and other sanctions Not perfect, but adequate • Having ‘adequate procedures’ in place is a full defence to the new corporate offence of failure to prevent bribery • Government Guidance published on 30 March 2011 • What is ‘adequate’ will depend on the circumstances: – Proportionate to bribery risks faced by an organisation – Nature, scale and complexity of organisation’s activities also relevant – Procedures should be “clear, practical, accessible, effectively implemented, and enforced” Six principles for happy compliance Proportionate Procedures Communication (Including Training) Due Diligence Monitoring and Review Top level commitment Risk Assessment Capturing your corruption risk Country risks Agents and Intermediaries Sector risks Risk Assessment Internal structures and procedures Transaction risks Business Partnership risks The Grand Prix and Wimbledon. Tick? • Corporate Hospitality – Hospitality intended to induce improper performance? or – reasonable public relations, enhance knowledge of your organisation etc? • Gifts and Incentives • What the SFO have said : http://thebriberyact.com/corporate-hospitality/ Grease payments • What are facilitation payments? • How to spot them? • How to resist them? • What organisations are doing to protect themselves • What the SFO have said : http://thebriberyact.com/facilitation-payments/ Jail time and following the money • Lessons from the US • Current UK enforcement approach – Proceeds of Crime Act – Self-reporting and whistleblowing – Criminal prosecutions • Priorities for the new SFO Director? – The non-UK corporate? – The complicit senior officer? Contacts Barry Vitou, Partner 020 7490 6501 [email protected] Neil McInnes, Senior Associate, Barrister 020 7490 6407 [email protected] Working hard to make it easier LONDON DUBAI BEIJING SHANGHAI HONG KONG SINGAPORE OTHER UK LOCATIONS: BIRMINGHAM BRISTOL EDINBURGH GLASGOW LEEDS MANCHESTER International: T +44 (0)20 7418 7000 UK: T 0845 300 32 32 Pinsent Masons LLP is a limited liability partnership registered in England & Wales (registered number: OC333653) authorised and regulated by the Solicitors Regulation Authority. The word 'partner', used in relation to the LLP, refers to a member of the LLP or an employee or consultant of the LLP or any affiliated firm who is a lawyer with equivalent standing and qualifications. A list of the members of the LLP, and of those non-members who are designated as partners, is displayed at the LLP's registered office: 30 Crown Place, London EC2A 4ES, United Kingdom. We use 'Pinsent Masons' to refer to Pinsent Masons LLP and affiliated entities that practise under the name 'Pinsent Masons' or a name that incorporates those words. Reference to 'Pinsent Masons' is to Pinsent Masons LLP and/or one or more of those affiliated entities as the context requires. Further information about us is available at www.pinsentmasons.com. © Pinsent Masons LLP 2011 www.pinsentmasons.com