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The new legislation is fairly draconian, potentially outlawing payments that would be regarded as legitimate in other jurisdictions - for, example, the 'facilitation' payments permissible in some circumstances under US anti-corruption laws.

Bribing another person. A person is guilty of an offence if he or she "offers, promises or gives a financial or other advantage to another person", intending that advantage "to induce the person to perform improperly a relevant function or activity" or to reward a person for such behaviour. The drafting of the offence - and indeed the Act generally - is deliberately wide.

The Act goes on to state that a function or activity is 'performed improperly' if it is performed in breach of a 'relevant expectation'. This is defined as what a reasonable person in the UK would expect in relation to the performance of the type of function or activity concerned.

Being bribed. A person is guilty of this offence if he or she requests, agrees to receive or accepts financial or other advantage intending that, in consequence, a relevant function or activity should be performed improperly.

Bribery of a foreign public official. This new, broadly drafted provision is a significant reform. Historically, it has been difficult to prosecute companies and individuals engaging in such activities outside the UK in countries where bribery may be commonplace.

Failure of commercial organisation to prevent bribery. This is the offence that will give businesses most cause for concern. A relevant commercial organisation is itself guilty of an offence if a 'person associated with that organisation' bribes another person intending to obtain or retain business. Persons associated with the organisation could in principle include employees, consultants and other agents anywhere in the world. This will be challenging for many companies that may have limited day-to-day control over the activities of such people.

Importantly, it is a defence for the organisation to prove that it had in place adequate procedures designed to prevent persons associated with it from undertaking such conduct. The UK government is due to publish guidance about what is meant by 'adequate procedures' before the Act comes into force. However, employers would be well advised to begin thinking now about how they can minimise their chances of incurring liability under the Act.

What measures should employers take?

The starting point is to carry out a risk assessment. Does the organisation operate in business sectors and/or countries which make it more likely that bribery will take place? The steps required to satisfy the 'adequate procedures' requirement are likely to depend largely on the actual risks involved.

Once the level of exposure has been established, it may be necessary to review internal procedures and policies and conduct staff training and awareness programmes.

With regard to the latter, it is crucial that senior managers are made aware of the corporate responsibility to prevent bribery and what they need to do about it. One way of focusing minds is to inform managers of the personal liability imposed by the Act on those 'consenting to' or 'conniving in' the commission of offences. It is worth also pointing out that the Act will raise the maximum custodial sentence for an individual convicted of an offence of bribery to ten years, whilst a commercial organisation failing to prevent bribery could face an unlimited fine.

Written company policies and procedures should be reviewed to ensure that they comply with the new legislative requirements. Larger companies may already have specific ethics/compliance codes and whistleblowing policies - will these be adequate under the new regime? All companies may also wish to consider adding a clause to their employment contracts which:

• spells out the key provisions of the Act;
• emphasises that breaches of those provisions may get the employee into serious trouble;
• expressly overrides any future management instructions which may breach the Act; and
• requires the employee to report any suspected breaches.

Consideration should also be given to adding a similar clause to the organisation's contracts with consultants and other agents.

This entry was written by James Storke and Nicholas Hadaway