Background

The Bribery Act 2010 became effective from 1 July 2011 and is often described as “the toughest anti-corruption legislation in the world”, with a near universal jurisdiction allowing for the prosecution of either an individual or a Company which has links to the UK, regardless of where the offence took place.  Offences under the Act include bribery/being bribed, the bribery of foreign public officials or even the failure of a company to prevent bribery made on its behalf (e.g. an agent who “facilitates” the clearance of a consignment through Customs, since the Act includes the term “through a third party”).  Penalties for a breach of the Act are significant, including unlimited fines, imprisonment for up to 10 years, confiscation of property and the disqualification of directors from holding office in the UK.

Does it apply to companies in Thailand?

The answer to this is “yes” if the organisation registered in Thailand has business in the UK, what-ever the nationality of the local entity.  For example, one interpretation is that a US owned Company which has operations in the UK and which makes a payment to a Thai Government Official could be prosecuted under the Act, and, as mentioned above, this could be extended to third parties acting on behalf of the Company.

In reality though, the Act is most likely to apply to companies and individuals who have a “close connection’ to the UK, including British Citizens, residents of the UK or a company registered in the UK.

What may fall under the definition of the Act?

The Act incorporates a relatively wide definition of “offences”, ranging from the receipt/payment of bribes, to corporate hospitality and “facilitation payments”.  Many of the transactions which may fall under the Act may be widely accepted business practices in a number of companies and strict compliance may place companies with UK connections at a disadvantage.

Can the risks be mitigated?

The Secretary of State for Justice, Ken Clarke, issued guidance three months before the Act came into force setting out six principles to be followed by a business: -

  • Proportionate procedures;
  • Top-level commitment;
  • Risk assessment;
  • Due diligence;
  • Communication/training;
  • Monitoring and review.

In practice, this may include: -

  • Appointment of a senior person within the Company as an “Anti-Bribery & Corruption Officer” with a remit to ensure that policies and procedures are adhered to;
  • Inclusion of the Company’s policies in respect of bribery and corruption in the staff or procedures manual;
  • Provision of training to staff;
  • Ensuring that sub-contractors or agents acting on behalf of the Company are aware of the requirements of the Act and its potential implications and documentation of this action;
  • Obtaining written representations from sub-contractors or agents to the effect that they have adopted sufficient safeguards;
  • Implementation of disciplinary procedures for staff who are found to be in breach of the Company’s policies as regards bribery and corruption and incorporation of these into the working regulations;
  • Translation of the procedures into Thai language;
  • Performance of a risk assessment review to identify areas for concern/high risk divisions or activities;
  • Development of effective systems and procedures to mitigate the risk, such as a log for all entertainment or gift sponsorship expenses above a certain level or a requirement for significant outlays for such expenses to be pre-approved at a senior level;
  • Implementation of a monitoring program to ensure compliance with procedures.
  • Engagement of a professional audit firm to ensure compliance with the Act.

In conclusion, so long as a Company takes adequate steps to prevent non-compliance with the Act, it should be able to provide evidence to defend itself in the event of being charged of failing to prevent bribery or compliance with the Act.