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Bribery: Taking the biscuit

13th July 2011

Bribed by a Biscuit?

Hows does the Bribery Act affect you?

What is the Bribery Act?
The Bribery Act 2010 came into force on 1 July 2011. It is intended to update the law on bribery and corruption and to simplify bribery prosecution in the UK.

Bribery can occur in all sorts of situations. In short, bribery is giving someone a financial or other advantage to influence them to perform their functions or activities improperly, or to reward them for having done so. The Act also covers “facilitation payments” which are payments to induce officials to perform functions they are obligated to perform as part of their jobs.

So giving a lavish gift to the person who is deciding whether or not your company wins a tender, to “encourage” them to remember you fondly during the tender process, would probably be a bribe. 

The Act introduces several offences including; offering or accepting a bribe, a corporate offence of failure to prevent bribery and as well as a specific offence of bribery of a foreign public official.

Does this mean we can't offer corporate hospitality?
No. The Act isn’t aimed at stopping genuine promotional activities. Provided that your expenditure on these activities is reasonable and proportionate, and intended to build business relationships, not influence business decisions, it is unlikely to be caught by the Act. So you can continue to do things like take clients to dinner, and provide them with coffee and biscuits when they come to your offices!

If the hospitality you provide is disproportionate, or seems to be a cover for a bribe, the authorities will look at what is being offered, how it is provided and the level of influence the person receiving the hospitality has in relation to any decisions affecting your business.

So how does it affect me and my business?
Individuals and commercial organizations are affected by the Act. Any individual offering, promising or giving a bribe, or asking for, receiving or agreeing to receive a bribe could be liable. Your business could be liable if a senior person commits a bribery offence.

Your business could also be liable if someone who is associated with it (e.g. an employee or an agent) bribes someone to gain a business advantage for your organization, or to gain or retain business. Your business may have a defence to this offence if you can show that you had “adequate procedures” in place to prevent bribery. These include things like appropriate policies and training and sensible risk assessment, monitoring and review. “Adequate procedures” will be different depending on the size, complexity and business of your organization, as well as the bribery risks you face. We talk more about adequate procedures in this months podcast.

Individuals convicted of bribery offences can face unlimited fines and/or prison sentences, and disqualification from acting as Company Directors. Organizations convicted of bribery offences can face an unlimited fine and may be barred from tendering for public contracts.

What do we do now?
Firstly, don’t panic! The Government has produced some useful guidance which you can get copies of here http://www.justice.gov.uk/guidance/making-and-reviewing-the-law/bribery.htm

The guidance suggests that a pragmatic approach is going to be taken to prosecutions under the Act. However, you still need to assess how the Act will affect your business, and check that you have adequate procedures in place to protect your organization. 

Podcast: Bribery Act and procedures
Listen to our podcast to hear more about the corporate offence of failure to prevent bribery and the steps you can take to protect your organisation.

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