UK BRIBERY ACT
ensure that facilitation payments are indeed permitted under local written law. In the absence of written law approval, market participants must avoid making such payments to avoid breaching the Act. Businesses should allow for extra
time in their project timelines, which may be needed if government officials are not forthcoming with the licences and approvals, due to the (legal and correct) refusal to make any facilitation payments.
Next Steps As a sector that is deemed to be
susceptible to bribery and corruption, the Serious Fraud Office (SFO), the body responsible for investing and prosecuting instances of bribery, likely will be paying especial attention to market participants operating in the energy sector. Therefore, market participants must ensure that they have put in place adequate procedures to avoid being in breach of the Act. The UK Ministry of Justice, which published guidance in 2011 on what constitutes adequate procedures (see The Six Principles opposite), stated that although the guidance was not prescriptive, it should be seen as a best practice guideline. The nature of projects involving
The Six Principles
The UK Ministry of Justice’s guidance outlines six key principles which set out what would be considered as adequate procedures:
1. Proportionate Procedures: An organisation’s procedures to prevent bribery by “associated” persons need to be proportionate to the bribery risks faced, taking into account the nature, scale and complexity of the organisation’s activities. The procedures need to be clear, practical, and accessible, and effectively implemented and enforced.
2. Top-Level Commitment: Senior management, including overseas parent company boards, are expected to foster a culture within an organisation in which bribery is never acceptable. This commitment should include the communication of the organisation’s anti-bribery stance, as well as an appropriate degree of involvement in developing bribery prevention procedures.
3. Risk Assessment: Reviews of all the risks the organisation is exposed to should be periodic, informed and documented. They should enable an organisation to accurately identify and prioritise the risks it faces, whatever the organisation’s size, activities, customers or markets.
4. Due Diligence: Every organisation should apply due diligence procedures, that take a proportionate and risk-based approach, in respect of the person who will perform services for, or on behalf of the organisation, to mitigate identified bribery risks.
5. Communication: Awareness and understanding of anti-bribery policies must be communicated internally and externally, perhaps by way of publication on the intranet and the company website respectively. In addition, training of employees, contractors and other third parties is an important part of this process.
6. Monitoring & Review: Each organisation’s board should receive regular reports, provide oversight, and modify practices where necessary, to maintain the effectiveness of implemented procedures. Monitoring will be key in ensuring procedures continue to provide organisations with a defence.
natural resources means that market participants operating in this sector must be particularly vigilant and mindful of the potential for bribery and corruption. Undertaking a thorough risk assessment and effective due diligence exercise before entering into a project will be integral to avoiding breaching the Act. Market participants should continually review and monitor any anti-bribery procedures and policies that they have put in place to ensure that they continue to be fit for purpose and reflect the participant’s most up-to-date anti-bribery policy. Such actions will not only
... market participants operating in this sector
must be particularly vigilant and mindful of the potential for bribery and corruption
serve as a defence against any actions brought by the SFO, but will also ensure that any potential for bribery and corruption is identified and eliminated as early on in the life of a project as possible. •
Prajakt Samant is a partner at McDermott Will & Emery UK LLP. His practice focuses on representing banks, hedge funds and energy and commodity companies in a variety of transactional, cross-border regulatory, compliance and risk management matters in the energy sector.
Prajakt can be contacted on +44 20 7577 6912 or E:
psamant@mwe.com
Simone Goligorsky is an associate at McDermott Will & Emery UK LLP. Her practice focuses on advising banks, financial institutions, corporate institutions, hedge funds, energy companies and utility groups on a variety of matters, including cross-border regulatory issues and commodity trading documentation negotiation.
Simone can be contacted on +44 20 7577 6985 or E:
sgoligorsky@mwe.com June 2012 91
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