BRIBERY IN THE UK: STAYING ON THE RIGHT SIDE OF THE LAW

There has been much speculation in the press as to the arrests which took place in Switzerland this week in relation to alleged bribery and corruption within FIFA. It would appear that there are two criminal investigations underway and seven top FIFA officials have been arrested in Zurich.

There are allegations that there has been bribery and corruption in relation to both the 2018 and 2022 World Cups which are to be held in Russia and Qatar respectively.

Bribery and corruption is not just an issue for FIFA but could have severe implications for your own business.

The Issue

The Bribery Act came into force on 1st July 2011. It introduced changes in the law, in that:-

  • It extends the crime of bribery to cover all private sector transactions (previously bribery offences were confined to transactions involving public officials and agents).
  • It contains a strict liability offence of failing to prevent bribery. An organisation will only have a defence to this offence if it can show that it had “adequate procedures” in place to prevent bribery.
  • The scope of the Bribery Act is massive. The offences are broadly defined and the Act has extra territorial reach.
  • The offences contained in the Bribery Act carry criminal penalties for individuals and organisations alike. For individuals, a maximum prison sentence of 10 years and/or an unlimited fine can be imposed; for companies, an unlimited fine can be imposed.

What is an Offence?

The Act contains 4 offences. Briefly put, they are:-

  • offering, promising or giving a bribe.
  • requesting, agreeing to receive or accepting a bribe.
  • bribing a foreign public official to obtain or retain business.
  • failing to prevent bribery by those acting on their behalf. (This is a strict liability offence for commercial organisations)

Is my Business at a Particular Risk?

Certain activities and operations, by their very nature, expose a business to greater risks or being involved in corruption. In particular, there is a risk that corporate hospitality might be seen as bribery. Therefore, it is advisable that lavish hospitality or gifts be avoided, both when giving and receiving. If in doubt, take advice.

Further risks involve the use of facilitation payments which are payments demanded by officials simply to secure or expedite the performance of their normal duties. Such payments are common place in some jurisdictions but the making of payments; even a small facilitation payment is likely to be an offence under the Act.

How do I protect my Business?

Although for many businesses the risk is relatively low it would be sensible to take the following steps:-

  • Conduct a risk assessment of actions within the business with a specific view on bribery and corruption.
  • Adopt a Code of Conduct or Policy Statement which sets out the businesses anti-corruption point of view.
  • If operating abroad conduct due diligence on businesses, agents and individuals whom you are dealing with.
  • Make sure that any business statements in relation to anti-corruption are clearly published, accessible and available internally and externally.
  • Consider allocating a budget to implement the anti-bribery policy.

Comment

Although there have been few prosecutions in relation to the Bribery Act it is important to remember just what constitutes an offence under the Act. The Act is far reaching. If in doubt, take advice on implementing a policy and adhere to that policy.

It is important to remember that an employer has a defence if it can show that it had in place “adequate procedures” designed to prevent bribery. There is, however, no definition or specific explanation as to what constitutes adequate procedures. Therefore it is up to each particular business to look at the way they conduct themselves and identify any particular risks.

Should you require any further advice in relation to the operation of the Bribery Act please contact Graham Laughton on 01463 239393.

Graham Laughton

Graham Laughton
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June 9, 2015