Due diligence of existing or prospective associated persons see Principle 4. Gifts, hospitality and promotional expenditure, charitable and political donations and demands for facilitation payments. Direct and indirect employment, including recruitment, terms and conditions, disciplinary action and remuneration.
Business relationships with all other associated persons including pre- and post-contractual agreements. Financial and commercial controls such as adequate bookkeeping, auditing and approval of expenditure. Transparency of transactions and disclosure of information. Decision making, such as delegation of authority procedures, separation of functions and the avoidance of conflicts of interest. Reporting of bribery including 'whistle blowing' procedures. Detail of the process by which the organisation plans to implement its bribery prevention procedures.
Communication of the organisation's policies and procedures, and training in their application see Principle 5. Monitoring, review and evaluation of bribery prevention procedures see Principle 6. Principle 2: 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. Commentary As in the draft guidance, this principle means that there should be top level commitment to both:. Communication of the organisation's anti-bribery stance : this will cover both internal and external communication and may include a commitment to carry out business fairly, honestly and openly, a commitment to zero tolerance towards bribery, an explanation of the consequences of breaching the policy for both employees and other associated persons, a statement of the business benefits of rejecting bribery, reference to the range of bribery prevention procedures the commercial organisation has or is putting in place, the names of key individuals and departments involved in bribery prevention procedures and reference to any collective action against bribery in, for example, the same business sector.
Involvement in developing anti-bribery procedures : this may include the selection and training of senior managers to lead anti-bribery work, leading on key measures such as a code of conduct, endorsement of all bribery prevention related publications, raising awareness and encouraging transparent dialogue throughout the organisation, engaging with associated persons and external bodies, involvement in high profile and critical decision making, assurance of risk assessment, oversight of breaches of procedures and the provision of feedback to the board or equivalent on compliance.
Principle 3: 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. Commentary The guidance states that risk assessment for bribery may be part of the organisation's general risk assessment or may form a stand alone process but in either case it should be proportionate to the organisation's size and structure and to the nature, scale and location of its activities.
Procedures will usually involve overseeing the risk assessment by top level management, ensuring appropriate resourcing, identifying internal and external information sources, due diligence enquiries see Principle 4 and accurately recording the risk assessment and its conclusions.
The extent of risk assessment should be monitored as the organisation's business changes see Principle 6. The guidance categorises external risks as follows:.
Country risk : the guidance suggests countries are high risk where there are perceived high levels of corruption and no effectively implemented anti-bribery legislation or promotion of transparent procurement and investment policies. Sectoral risk : higher risk sectors include the extractive industries and the large scale infrastructure sector.
Transaction risk : these could include charitable or political contributions, obtaining licences and permits and transactions relating to public procurement. Business opportunity risk : these could include projects which are of high value, involve many contractors or intermediaries, are not undertaken at market prices or have no clear legitimate objective. Business partnership risk : the guidance cites the use of intermediaries in transactions with foreign public officials, consortia or joint venture partners and relationships with politically exposed persons where the business relationship involves a prominent public official, as examples of high risk business partnerships.
The guidance lists common internal risks as including deficiencies in employee training, skills and knowledge, a bonus culture that rewards excessive risk taking, a lack of clarity in the policies and procedures relating to hospitality and promotional expenditure, and political or charitable contributions, a lack of financial controls and lack of a clear anti-bribery message from the top-level management.
Principle 4: 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. Commentary The guidance emphasises that due diligence should be carried our on using a proportionate, risk-based approach, so, for example, less bribery prevention due diligence is needed when appointing a person to carry out IT support than when appointing someone to act as intermediary with public officials in a high risk jurisdiction.
The Principle encourages commercial organisations to put in place due diligence procedures so that proportionate measures designed to prevent persons associated with them from bribing on their behalf can be put in place. Monitoring of associated persons should continue throughout the business relationship.
Due diligence is likely to be greater in the case of companies given the number of individuals involved but organisations should also remember to carry out due diligence in relation to their own employees who are in a position of vulnerability in relation to the potential for bribery.
Principle 5: 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. Commentary Communication will vary according to the risks faced by the relevant organisation.
Internal communications will include both a clear statement of policies and the procedures of the organisation and the procedures for raising concerns about bribery, should it be detected.
External communications may include a code of conduct and can include information on the organisation's procedures, controls and sanctions. The guidance considers various forms of training and who should undertake it. Once again, it notes that the requirement to train employees and some associated persons will be proportionate to the risks faced. Training should be continuous, and regularly monitored and evaluated. Principle 6: Monitoring and review The commercial organisation monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.
Commentary The guidance notes that as bribery risks will change from time to time policies and procedures should be kept under constant review. Financial control mechanisms are particularly important in this respect as they will help indicate the effectiveness of anti-bribery procedures. Periodic reviews should be supplied to top management and organisations should also consider external appraisal of its policies and procedures. Case Studies Appendix A to the guidance contains 11 case studies which look at how the six principles might relate to hypothetical situations.
The case studies cover:. Facilitation payments. Hospitality and promotional expenditure. Community benefits and charitable donations. The case studies are simpler that those set out in the draft guidance and in each case give a suggested list of actions that an organisation facing the situation given might consider.
Source: Bribery Act Guidance about commercial organisations preventing bribery section 9 of the Bribery Act Law stated as at Mar Resource Type Legal update: archive.
Jurisdiction United Kingdom. Section 1: offences of bribing another person. Section 6: Bribery of a foreign public official. Section 7: Failure of commercial organisations to prevent bribery. Principle 5: Communication including training. As in the previous draft guidance, the Ministry of Justice guidance recommends that policies and procedures are put in place to prevent bribery. Policies are likely to. The guidance provides a non-exhaustive list of topics that bribery prevention procedures might cover.
Areas that may be relevant to HR include. The Bribery Act will come into force on 1 July Please see our December article for details of practical steps that you may wish to take prior to implementation.
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Necessary cookies enable core functionality such as security, network management, and accessibility. Sanctions and export controls. US corporate bribery offences. Sign-in Help. Failing to prevent bribery Failing to prevent bribery Practice notes. The following Corporate Crime practice note provides comprehensive and up to date legal information covering: Failing to prevent bribery Corporate criminal liability for bribery—section 7 of the Bribery Act The adequate procedures defence section 7 defence Ministry of Justice guidance on adequate procedures SFO guidance on evaluating compliance programmes The duty on a commercial organisation to report a section 7 breach Sentence for failing to prevent bribery offences Failure to prevent bribery prosecutions—in practice SFO v Sweett Group PLC Brand-Rex Limited More Failing to prevent bribery This Practice Note considers the corporate criminal offence of failing to prevent bribery under section 7 of the Bribery Act BA Corporate criminal liability for bribery—section 7 of the Bribery Act The failing to prevent bribery offence can only be committed by relevant commercial organisations RCOs , not individuals.
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