The UK Bribery Act came into force on the 1st of July 2011.  Guidance under section 9 of the Act was published by the government in March 2011. The Guidance identifies six principles with which a corporation must demonstrate compliance if it intends to rely on the statutory defence contained within section 7(2) of the Act.  If a company is not able to establish the defence, it will be held liable for the acts of all “associated persons” including employees, agents, intermediaries and joint venture partners, and subject to unlimited fines.

THE SIX PRINCIPLES

• Proportionate procedures – that a commercial organisation’s procedures to prevent bribery by persons associated with it are proportionate to the nature, scale and complexity of the organisation’s activities. They must also be clear, practical, accessible, effectively implemented and enforced
• Top-level commitment – that the top level 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. That they foster a culture within the organisation whereby bribery is never acceptable
• Risk assessment – that a commercial organisation conducts a periodic, informed and documented assessment of the nature, and extent, of its exposure to potential external and internal risks of bribery on its behalf by persons associated with it
• Due diligence – that a commercial organisation applies due diligence procedures, taking a proportionate and risk-based approach, in respect of persons who perform or will perform services for and on behalf of the organisation, in order to mitigate identified bribery risks
• Communication (including training) – that a commercial organisation seeks to ensure its bribery prevention policies and procedures are embedded and understood throughout the organisation through internal and external communication, including training, proportionate to the risks it faces
• Monitoring and review – that a commercial organisation monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary

The government has thus far been silent on the issue of successor liability in merger and acquisitions.  However, there is clear successor liability under the FCPA and, in our view, the same exposure under the Bribery Act.  Companies should therefore undertake anti-bribery due diligence on acquisition or merger targets. Full details of the guidance and the six principles can be found here.

OUR SERVICES

• Due diligence for clients entering arrangements with new agents or suppliers, or in advance of acquisitions, investments, or joint ventures
• Due diligence on “associated persons” including merger and acquisition targets, joint venture partners, agents and third party suppliers and employees
• Due diligence for clients entering arrangements with new agents or suppliers, or in advance of acquisitions, investments, or joint ventures

WHY US?

• We have more than 15 years experience in helping clients to comply with the US Foreign Corrupt Practices Act and the Federal Sentencing Guidelines on which the Bribery Act and the six principles are based
• We have conducted investigations into alleged breaches of the FCPA
• We have worked with boards, business strategy departments, general counsels’ offices, compliance departments and corporate security to help ensure that our clients identify, manage, and respond to bribery risks in developing and managing their businesses
• We have advised governments on anti-corruption policies and procedures and trained prosecutors in investigation techniques and in undertaking effective due diligence