UK Bribery Act
STEP-IN Management Ltd.
Continued from “E-marketing (part 2)”
On 1st July 2011 the UK Bribery Act comes into force. It addresses anti-bribery and corruption (ABC) and is tough in both its geographic and activities scope.
Bribery is the payment of a financial or other benefit made in order to obtain or retain business or business advantage e.g. to effect improper performance by another person.1
Pharmaceutical companies in the UK, many of whom are US owned, may think that their operations are sufficiently compliant, governed as they are by ABPI Code and the US Foreign and Corrupt Practices Act (FCPA), and that consequently no further action need be taken. I disagree. This is because in some areas the Bribery Act goes further than FCPA (see bold below). The UK Bribery Act includes:
“…in some areas the Bribery Act goes further than FCPA…”
• Offering/ promising bribes (active bribery)
• Receiving or requesting (passive bribery)
• Failure to prevent bribery by other ‘associated persons’ acting on a company’s behalf
• Companies carrying on a business or part of a business in the UK
• Offences committed outside the UK by persons with a ‘close connection’ with the UK
• Business activities of a public nature i.e. in both public and private sectors
• Facilitation payments, to ‘grease the wheels’ or to comply with demands from officials, are never allowed (FCPA allows some exceptions)
• Promotional expenses such as hospitality, where proportionate and appropriate and no bribery takes place, are recognised as a legitimate part of doing business
• Penalties include unlimited fines and maximum ten years imprisonment
• Bribery of Foreign Public Officials (FPOs) where the FPO is neither permitted nor required, as determined by local written law, to be influenced in their decision making (for example, by proposed, additional investment in a local community project). 2
The only statutory defence, if prosecuted, is to have adequate procedures in place.
“The only statutory defence, if prosecuted, is to have adequate procedures in place.”
Procedure adequacy will need to be demonstrated in terms of scope, content, training and compliance. To do this well implies active monitoring to ensure that:
1. Appropriate training is undertaken by the right people
2. Understanding is tested at an agreed, appropriate level
3. Breaches are one-off and not trends at an individual, team, department or company level
4. Breaches are addressed in terms of disciplinary action or revision to training or supervision
5. Performance appraisal and reward reflect not just good financial results but also how targets were set and met
6. Decisions made in regard to activities where the opportunity for bribery is the greatest are fairly assessed and documented e.g. awarding contracts
7. Controls (approval levels, financial limits etc) are appropriate and applied robustly
So what should pharmaceutical companies be doing?
First they should review their ABC risk assessment and confirm or update it in terms of business functions, business partners, transactions and jurisdictions.
“I suggest companies do not develop a stand-alone UK Bribery Act procedure.”
I suggest companies do not develop a stand-alone UK Bribery Act procedure. Rather, pharmaceutical companies should review and update existing Policies and Standard Operating Procedures (SOPs) and associated training in the relevant areas. These will commonly be:
This article by no means encompasses all the content of the UK Bribery Act but aims to picks out elements of most relevance to compliance in a pharmaceutical company.
For further information go to http://www.opsi.gov.uk/acts/acts2010/ukpga_20100023_en_1
1. Improper performance is ‘performance which amounts to a breach of an expectation that a person will act in good faith, impartially, or in accordance with a position of trust’, The Bribery Act – Guidance.
2. Where the local law is silent on this, prosecutors will consider the public interest in prosecuting
The next part in this series will be published on the 6th June
About the author:
Jean is currently engaged in the development with EverydayAssess of an objective web based tool for ABC that can be used to assess both the readiness of an organisation’s ABC programme and processes plus the capability of its people against adequate processes. See http://everydayassess.com/
What problems can you foresee when the UK bribery act comes into place?