The potential consequences of being found guilty of an offence under the soon-to-be-operational Bribery Act 2016 make it imperative that both individuals and entities are aware of the provisions of the legislation.

The Act, which becomes operational September 1, applies to all Bermudians, Bermuda residents and entities incorporated or registered in Bermuda. On conviction, individuals can face imprisonment for a term of up to 15 years, or an unlimited fine, or both. Commercial organisations can receive an unlimited fine.

The Act is largely based on the United Kingdom’s Bribery Act 2010 and consolidates various existing anti-corruption laws into one clear international standard for combatting bribery.

Bribery involves “intending to influence the actions of a person by way of a bribe”. The main offences under the Act are:

• Offering, promising or giving a financial or other advantage to another person.

• Requesting, agreeing to receive or accepting a financial or other advantage.

• Bribing a foreign public official.

• Failure of public officials to report bribery.

• Interfering with such duty to report bribery.

• Failure of relevant commercial organisations to prevent bribery.

The territorial reach of the Act is broad and goes beyond just Bermudians, Bermuda residents and Bermuda entities. The Act applies to bribery that takes place in Bermuda and bribery that takes place outside of Bermuda (which would form an offence if the bribery was carried out in Bermuda) where the person has a close connection with Bermuda.

A person who commits bribery has a close connection with Bermuda if they:

• Commit the offence while in Bermuda.

• Hold Bermudian status or are a permanent resident of Bermuda.

• Are ordinarily resident in Bermuda.

• Or are a body corporate or partnership, incorporated, formed or registered under the laws of Bermuda.

Note also that the failure of a relevant commercial organisation to prevent bribery is an offence committed irrespective of whether the offence takes place in Bermuda or elsewhere.

For the purposes of the Act, a “relevant commercial organisation”, is: (i) a body corporate or partnership incorporated or formed under the laws of Bermuda that carries on business in Bermuda or elsewhere, and (ii) any other body corporate or partnership wherever incorporated or formed that carries on a business or part of a business in Bermuda (Relevant Organisation).

For there to be an offence, an associated person must have intended to obtain or retain business or an advantage in the conduct of business for the Relevant Organisation.

An “associated person” is defined widely under the Act as a person who performs services for or on behalf of a Relevant Organisation. The concept of “associated person” covers employees, contractors, agents, joint ventures and subsidiaries of Relevant Organisations. There is no requirement for the “associated person” to have any connection with Bermuda.

Relevant Organisations will have a defence to liability if they can show that they have put in place “adequate procedures” to prevent associated persons from bribing. Pursuant to its obligations under the Act, the Ministry of Legal Affairs published guidance in June on the procedures that Relevant Organisations can put in place to ensure their practices do not fall afoul of the Act. The guidance can be found at https://www.gov.bm/sites/default/files/BRIBERY-ACT-2016-Guidance-FINAL2.pdf.

The Act also creates a new National Anti-Corruption and Bribery Committee for the purposes of advising the Minister on the detection and prevention of corruption and bribery, reviewing the operation of the Act, and evaluating the existing legislative and administrative measures in place in Bermuda to combat corruption and bribery.

The Act is an important step in modernising Bermuda’s corruption and bribery legislation as it signifies that Bermuda is committed to the global fight against corruption and bribery.

The significant extension of the Act’s territorial reach and severe penalties means that individuals connected to Bermuda or associated with a Relevant Organisation should be aware of the provisions of the Act. Additionally, Relevant Organisations must take appropriate steps to ensure adequate procedures are in place to prevent bribery in order to rely on the corporate defence.

Attorney Shannon Cann is an Associate in the Corporate Department at Appleby practising in all areas of corporate and commercial law including banking and corporate finance, mergers, amalgamations, restructuring, re-domestications and insurance law and regulation. A copy of this column is available on the firm’s web site at www.applebyglobal.com

This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer