Glossary term
Adequate Procedures Defence
Subject: Financial Crime, Bribery and Corruption
Also known as: Adequate procedures
Under UK law, the adequate procedures defence lets a company avoid liability for failing to prevent bribery by its staff or agents, if it can show it had suitable anti-bribery procedures in place when the bribe was paid.
Explanation
Under the UK Bribery Act, a company commits an offence if a person associated with it bribes someone to win business for it. The only full defence is to prove that the company had adequate procedures designed to prevent such conduct. The burden of proof lies with the company. Official guidance names six principles for judging adequacy: proportionate procedures, top-level commitment, risk assessment, due diligence, communication and training, and monitoring and review. Procedures are measured against the company's size, sector and the risks it faces, so a small domestic shop and an international engineering group are held to different standards. Other countries, such as France, Italy and Brazil, require or reward effective compliance programmes in related ways. The defence does not apply to the person who pays the bribe. Firms document their programme carefully, since a court will ask what was actually done. Courts ask what the firm actually did, so a programme backed by records protects the company and one that exists only on paper does not.
Example
A customs official is paid by an employee of an engineering firm to speed up a shipment. The firm is prosecuted, and argues it had adequate procedures. It produces its anti-bribery policy, a risk assessment of its high-risk countries, records of staff training and its checks on agents. A weaker firm without such records would find the defence hard to run.
Not to be confused with
- Compliance defence in general
- Other laws may offer different or partial defences. This one is specific to corporate liability for failing to prevent bribery.