1. The Bribery Act 2010

2. Overview Publication of section 9 guidance and commencement of the Act
Act in force 1st July 2011
Guidance published by the Government to accompany the Act and explain it in more detail

3. Purpose
In line with (but stronger than) similar legislation such as the US Foreign Corrupt Practices Act, part of an attempt to tackle bribery on worldwide scale
Intended to create a level playing field for businesses and to align trading nations around decent ethical standards, and to punish those who seek to gain advantage through illegal/unethical means
Not intended to hinder business by clamping down on ordinary business practices and corporate hospitality

4. Impact on shipping industry
Seen as one of the most high risk industries:
Frequent dealings with foreign public officials (e.g. customs, port officials)
Frequent use of agents/brokers and other intermediaries
Business conducted in ‘high risk’ jurisdictions and those where bribery/facilitation payments may be common or accepted as normal
Transparency International corruption perception survey:
Corporate hospitality/gifts are common

5. Penalties
Company may face unlimited fines – recent UK judgment stated fines should be in the region of tens of millions of pounds or more
Company may be barred from participating in/carrying out public contracts
Individuals (most commonly senior management, board members) can be imprisoned for up to 10 years per offence/face unlimited fine
Company directors disqualified from holding directorships for up to 15 years
Reputational damage to Company
Professional fees – Siemens fined $800m, paid $900m in legal fees etc.

6. The offences Section 1 – general active offence
Section 2 – general passive offence
Section 6 – bribery of a foreign public official (FPO)
Section 7 – corporate failure to prevent
A ‘commercial organisation’ fails to prevent a person ‘associated’ with it paying a bribe (section 1 or 6) with the intention of obtaining business or business advantage for the organisation. Strict liability offence – no fault. Organisation can be guilty even if it was not aware of the offence taking place

7. The offences (cont.) ‘Relevant commercial organisation’
A body incorporated in the UK, or a body incorporated anywhere but carrying on business or part of business in the UK
HMM very likely to satisfy this criteria
‘Associated person’
A person performing services for/on behalf of a relevant commercial organisation, regardless of the capacity in which it does so
Includes employees, agents, subsidiaries and (in some cases) suppliers (vendors) and joint venture partners

8. Jurisdiction
Assuming HMM qualifies as a relevant commercial organisation (very likely), the Act has jurisdiction over all of HMM’s branches and subsidiaries worldwide. Therefore HMM will be liable for any act of bribery by any associated person anywhere in the world, not just in the UK, and even if that associated person has no link with the UK

9. Adequate procedures
The Act provides a defence against s.7 offence for commercial organisations of ‘adequate procedures’
These are designed to ensure bribery is prevented at source by educating staff sufficiently and ensuring risks to the company have been assessed and tackled
If these are in place, commercial organisations may not be liable for individual/isolated instances of bribery by those acting on their behalf
Working towards zero tolerance policy – SFO acknowledges this may take time but companies must be taking all necessary steps

10. The six principles
Proportionate procedures – appropriate to company’s size/structure and risks faced
Top-level commitment – anti-bribery message must come from CEO/ Managing Director/ Board
Risk assessment – assessing where the greatest dangers of bribery offences are likely to arise
Due diligence – checks on associated persons
Communication – educating staff/ associated persons
Monitoring and review – assessing and updating anti-bribery procedures

11. Hospitality, gifts and promotional expenditure
Act doesn’t intend to stop all corporate hospitality/gifts – recognises this is an important part of doing business
Hospitality should be proportionate and reasonable, and in line with cultural norms
Small gifts are traditional in the UK at Christmas
Hospitality/gifts should carry no influence or expectation of performance
Should never be given during contract re-negotiation or business/commercial discussions
Should never be in cash form or cash equivalent
Ethics Management team guidance on gifts – gifts up to £50 per person (£100 on special occasions), promotional expenditure (including corporate hospitality) up to £500 per occasion or £150 per person per occasion
The SFO only likely to prosecute if it’s in the public interest to do so

12. Facilitation payments
Small bribes made to facilitate routine government action
May be very common/expected in some jurisdictions. But will always be outlawed under the Act – no exemptions
The Act intends to work towards eradicating all such payments worldwide
Where individuals have no alternative but to make such payments (in fear of their personal safety) they will likely be able to rely on the defence of duress
See Anti-Corruption and Bribery Policy for steps for staff to take if confronted with demand for facilitation payment

13. Next steps See HMM Anti-Corruption and Bribery Policy
Ethics Management team homepage link - (Korean language) (English language)
If you have any questions that arise during your day to day duties, please contact either HQ Ethics Management team or EHQ Compliance Manager (EHQ Claims)

14. EU Antitrust Compliance
Recent dawn raids (including Maersk, OOCL, CMA CGM)
Different to Bribery Act in that no equivalent of ‘adequate procedures’ defence is available
Company will be guilty of an offence if any breach of the laws is found
Any member of staff can breach the laws, whether or not they were aware the were doing so, and whether or not they were in a position related to pricing/marketing/commercial decisions
Therefore it is very important that all staff are aware of the laws and what conduct they must avoid when carrying out their day to day roles
All staff should read and be familiar with HQ’s Antitrust Compliance Manual and Antitrust Compliance Manual – Procedural Guidelines