A survey by KPMG in 2011 found that 71% of companies believe that there are some places in the world where business cannot be done without engaging in bribery and corruption.
The Bribery Act came into force on 1st July 2011 and was designed to overhaul pre-existing bribery laws. The Act creates offences that carry a prison term of up to 10 years and unlimited fines.
On 31 August 2011, the CPS announced its first prosecution under the Act. It is alleged that a court employee offered to influence the court proceedings for a motoring offence if he was paid £500. If proven, the employee would be guilty of an offence under the Act. The hearing is due to take place in October 2011.
To paraphrase the main offence under the Act, a person is guilty of bribery if they provide to someone a financial or other advantage to encourage them to act improperly, or to reward them for already having done so.
This wide definition had caused some concern among businesses as to whether corporate hospitality would be covered. As a result the implementation was delayed from April to July 2011.
Where a senior member of an organisation (such as a Director, Company Secretary and even a senior manager) commits a bribery offence, that person’s activities are attributed to the organisation and there is no defence.
Where a less senior member of staff pays a bribe to get business, keep business or gain a business advantage, the employer will have a full defence if they can show that they had adequate procedures in place to prevent bribery.
Organisations wishing to protect themselves will therefore need to put in place “adequate procedures”. Procedures will need to be proportionate to the bribery risks faced by the business, and its size and resources.
If, for example you operate in an overseas market where bribery is known to be commonplace, you would need to go much further than a small organisation which operates in markets where bribery is uncommon. Measures such as carrying out due diligence on trading partners and providing relevant training to staff should be considered.
The Government has issued guidance stating that they do not intend that genuine hospitality or similar expenditure which is reasonable and proportionate should be caught by the Act unless the hospitality was a cover for bribing. Clearly each instance would be judged on its individual facts but, the general view is that hospitality which is reasonable and proportionate given the sort of business you do is unlikely to constitute bribery under the Act.
SME’s can obtain more guidance from the Transparency International website. A pdf version of some guiding principles specifically adapted for SME’s can be downloaded from the Business Principles for Countering Bribery page of the site.
Debenhams Ottaway can also help you to conduct risk assessments and prepare policies and procedures to protect your business.
We can carry out Audits of all your Employment documentation and procedures to ensure compliance with current laws and best practice. We offer businesses a free review of contracts and policies as part of the Employer Support Service which fully protects your business against the financial exposure of an employment dispute for an agreed monthly fee. Click here for further details.
For further advice and information, please contact Louise Attrup on 01727 735 663 or via email on la@dolegal.co.uk
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