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JULY 2011

The Bribery Act 2010 finally came into force on 1 July 2011 meaning that all organisations, no matter how big or small, should now have in place appropriate policies and procedures to ensure that bribery and corruption do not occur.

The focus of advice and guidance on this subject over the past 12 months has largely been on ensuring that your company is compliant with the new rules.  Now that the Act is in force, it is assumed that all companies will have their house in order* and so the focus has turned to other practical implications of the Bribery Act 2010.

The potential legal, financial and reputational damage that could arise from investing in or acquiring a business that is later found to have committed or been associated with acts of bribery is substantial.  There are a number of protections that can be included in the acquisition or investment documents that compensate a party for any loss caused by bribery and corruption offences committed by the other party prior to completion, but no financial remedy can fully repair the damage to a company’s reputation where it has been linked to an instance of bribery or corruption.  For this reason, it is essential that due diligence exercises include as a matter of course a full investigation into bribery and corruption.

Anti-corruption watchdog, Transparency International UK has recently published draft guidance on anti-bribery due diligence which is intended to establish best practice procedures for companies carrying out due diligence exercises in relation to mergers, acquisitions and investments, to allow them to identify any current or historical instances of bribery and where necessary minimise any damage caused as a result of such acts.

If you would like further details of the Transparency International UK guidance or would like specific advice as to how the issue of bribery and corruption should be addressed as part of your standard due diligence process, please do not hesitate to contact Rebecca Gardner (rgardner@gdlaw.co.uk) or any other member of Goodman Derrick LLP’s Corporate Team on 0207 404 0606.  The Corporate Team have experience of due diligence exercises in connection with all kinds of transactions and are available to conduct the due diligence exercise itself and produce formal reports or simply to advise as to the best procedures to adopt.

If you don’t already have anti-corruption policies and procedures in place and would like some advice as to what is required, please get in touch and we will be happy to assist