24 February 2012
To the Members
The United Kingdom’s Bribery Act 2010 (hereafter, the ‘Act’) came into force in the UK on 1 July 2011.
While the Act is part of the national law of the UK, it also applies to foreign companies operating part of their business in the UK, such as by way of a liaison office or subsidiary, as the Japan Ship Owners’ Mutual Protection & Indemnity Association (the “Club”) does.
It is not just the Club which must comply with the Act. Correspondents handling claims etc. on our request must also comply, as must lawyers and surveyors working on our behalf.
We would like to discuss with Members the main points of the Act and how the Club has responded to it.
Main Points: The UK’s Bribery Act 2010
- Objects : Objects of prosecution by the Act are as follows :
- British Citizen and British National (Overseas).
- An individual ordinary resident in the UK (eg a member of staff of our London Liaison Office).
- A body which is incorporated under the law of any part of the UK which carries on a business (eg Japan P&I Club (UK) Services Ltd., our British registered subsidiary).
- Any other body corporate (wherever incorporated) which carries on a business or part of a business in any part of the UK (eg the Club ourselves).
- Offences: The Act stipulates bribery offences as follows :
- Section 1 (Bribing another person) :
- To offer, promise or to give a financial or other advantage (see 3. below) to another British or foreign person.
- Section 2 (Being bribed) :
- To request, agree to receive or accepts same advantage as above by British or foreign person.
- Section 6 (Bribery of foreign public officials) :
- To offer, promise or give same advantage as above to a foreign public official.
- Section 7 (Failure of commercial organisations to prevent bribery)
- This covers the case where a commercial organisation’s associated person (see 4. below) bribes another person, the relevant commercial organisation who failed to place adequate procedures designed to prevent associated person from bribing.
- Section 1 (Bribing another person) :
- Financial or other Advantage: This is deliberately not defined in the Act. The meaning is left to be decided by the common sense of the Tribunal of Fact, such as a jury.
- Associated Person: A person who performs services on behalf of a commercial organisation. The associated person may be an employee, agent, subsidiary, supplier, service provider, correspondent and so on.
- Facilitation Payment: Otherwise known as a ‘grease payment’, paid to facilitate routine government action. UK prosecuting officials have discretion to prosecute or not, regardless of volume of payment.
- Corporate Hospitality: The Act does not make corporate hospitality illegal, but such hospitality must be reasonable and proportionate. Otherwise the person providing the hospitality may be prosecuted, just as may have happened prior to the passing of the Act.
- Penalties : Individual: Imprisonment up to 10 years and/or Fine (Unlimited)
- Corporate: Fine (Unlimited)
- Prescription : There is no prescription in the Act, ie no time limits are given for the prosecution of offences committed under the Act.
The Club responses to the Act.
- In November 2011, the JPI principal office wrote to all the Club’s correspondents telling them how the Act applied to them and asking for their confirmation of compliance with it. These confirmation letters have been continuing to arrive here ever since.
- In addition to issuing this Special Circular to remind our good members of matters around the Act, we have also been briefing all our staff on its terms and are revising our in-house compliance manual.
Compliance Function, the Club
- For your reference, we hereunder illustrate the compliance function of the Club. The Compliance Committee and Internal Audit Division take the lead in compliance matters.
The staff of our underwriting dept or branch welcome any questions on the Act, and will arrange for a suitable person to answer in the shortest possible time.
Materials related to the Act are as follows :
The full text of the Act.
Our message to correspondents asking for their confirmation of compliance with the Act
The Anti-Bribery Policy of the Club as published further to the passing of the Act.
An information sheet on the Club Policy as referred to above.
The Japan Ship Owners’ Mutual Protection & Indemnity Association