UK authorities have disposed of the first corporate offence of “failing to prevent bribery”, four years after the offence became available after Brand-Rex Limited self-reported its acceptance of responsibility for contravention of section 7 of the Bribery Act 2010 (“the Act”).

The company paid £212,800 by way of a civil recovery order, thereby avoiding criminal sanctions. The civil settlement was agreed following a self-report to the authorities, thorough investigation by independent advisers and proactive steps to avoid further offences.

The “adequate procedures” defence was not argued although Brand-Rex reportedly had ABC policies and procedures in place but did not attempt to assert that they were “adequate”; had it been able to do so successfully, the company would have had a complete defence to a charge under section 7, thereby eliminating any risk of criminal sanction.

The case highlights

1. the importance of implementing adequate procedures to prevent bribery and the benefits of being proactive in investigating and reporting breaches.
2. the risks that companies face under section 7 if they do not maintain adequate procedures to prevent bribery by associated persons.
3. the benefits of undertaking a full internal investigation into alleged wrongdoing and making a prompt self-report to the appropriate authorities, which was inevitably a major factor in avoiding criminal charges.

The key message is that prevention is better than cure. Four years after the Act came into force, now is a good time to:

1. refresh ABC risk assessments;
2. verify that policies and procedures are in fact “adequate” to meet key risks and that they have been properly implemented, especially overseas;
3. conduct refresher training for key management, staff and third parties;
4. review ABC due diligence processes in relation to existing and future business partners such as sub-contractors, agents, joint venture partners, etc, and other third parties such as acquisition targets; and
5. ensure that ABC compliance is properly resourced and that matters such as Board level engagement and messaging are sufficient and properly recorded.