The Bribery Act 2010 will come into force on 1 July 2011. The Act sets out a range of bribery related offences which could give rise to prosecution for both organisations and individuals.

The offences include:-
1.Giving bribes
2.Receiving bribes
3.Bribery of a foreign Public Official
4.Failure of commercial organisations to prevent bribery

The definition of a bribe is a broad one and can include any payment or other benefit which is intended to induce or reward the improper performance of a public function or business activity. Improper performance is further defined as being a performance (or non-performance) in breach of good faith, impartiality or a position of trust.

How does the Act Affect Housing Associations and Charities?
The first three offences could be committed by any person, including committee members, volunteers or employees, of an association or charity or a subsidiary.

There has been some uncertainty as to whether housing associations or incorporated charities could commit the fourth offence, that of failure of commercial organisations to prevent bribery  as there was uncertainty over whether either was in fact a commercial organisation.

Guidance issued by the Ministry of Justice now makes it clear that an incorporated body carrying on a business would be a commercial organisation for the purposes of the Act. Neither the Act nor its subsequent guidance contains a definition of business however it is very likely that housing associations and many incorporated charities would be deemed to fall within this category (charities that are not incorporated fall outwith the definition of commercial organisations).

Guidance however appears to have lifted the threat that normal corporate hospitality might be held to be bribery. Accordingly, genuine hospitality or similar business expenditure that is reasonable and proportionate will not be caught by the Act.

How to respond to the Act
If you can prove your organisation has adequate procedures in place to prevent persons connected from giving or receiving bribes, you will have a defence to any corporate offence charges of failing to prevent bribery.

We would recommend that you undertake risk assessments, putting in place effective policies and procedures, and train staff to ensure that appropriate procedures are in place.

Please contact our team if you would like any additional information on the Bribery Act 2010.