Articles

Companies within the life sciences sector are often accustomed to operating in a highly regulated environment and have long been live to the types of risk posed by corruption and bribery.  Many within this sector may therefore believe that they have the requisite checks and balances to comply with the Bribery Act 2010 (the Act), which is expected to come into force before the end of the year.  However, a closer consideration of the scope of offences created by the Act may provide some companies with an unwelcome surprise.

The Act replaces the existing law with two general offences: an offence of bribing a person and an offence of accepting a bribe. There is also a specific offence of bribing a foreign public official and a corporate offence of failing to prevent bribery (the Corporate Offence).

 Corporate Offence should be of particular concern to companies, not least because there is no element of negligence involved, making it an offence of strict liability.  Furthermore, the offence relates to acts of bribery committed by a person 'associated' with the company, for the benefit of that company - therefore, a company could potentially incur liability due to the actions of not just its own employees but also of other related third parties, such as its agents. It is also important to bear in mind that it matters not whether the relevant act of bribery takes place at home or abroad nor does it matter whether the company is a non-UK company so long as it is operating a business (e.g. a subsidiary) in the UK.

A company will have a defence to the Corporate Offence if it can demonstrate it had in place adequate procedures to prevent acts of bribery by associated persons.  Guidance as to what constitutes 'adequate procedures' is yet to be issued by the Government.  In the meantime, many companies are looking to industry regulators, trade associations and anti-corruption organisations for direction on the type of steps they should be taking to avoid falling foul of the Act. 

Most pharmaceutical companies for example adhere to the ABPI code. However, for the purposes of the Act that is simply not enough. The ABPI code is narrow in its remit in that it only sets standards in relation to advertisement and promotion of prescription medicines. Most pharmaceutical companies especially those with a global presence have already supplemented this and other industry codes by requiring their employees and representatives to adhere to more stringent internal codes and policies including anti-bribery and anti-corruption policies and may therefore be closer to having "adequate procedures" in place. However those relying on the ABPI code and the common law provisions for bribery need to start thinking about implementing anti-bribery compliance programs.     

The following are examples of practical steps companies might wish to consider when implementing anti-bribery/anticorruption compliance programs:

• introduce a general code of conduct, together with specific internal policies covering anti-bribery/anti-corruption;
• carry out due diligence prior to the appointment of third parties engaged to undertake activities on behalf of the company;
• ensure that all staff and relevant third parties are provided with adequate training and are required to comply with the policies ; and
• incorporate language in contracts with the relevant third parties that specifically addresses bribery and corruption and reserve the right to audit performance / records of such parties.