Bribery

The Bribery Act 2010 has wide ranging and serious implications for all business, large or small. Failure to take appropriate steps to evidence a business has appropriate policies and procedures to prevent bribery may have disastrous consequences, especially in an environment where governments worldwide are in the mood to regulate and enforce.  Due to our years of practical experience Blackhawk can assist your organisation with cost effective training in Bribery Act compliance, preparing policies and procedures, due diligence and ongoing monitoring.

What you need to know

There are 4 key offences in the Act, which relate to :-

* bribery of another person

* accepting a bribe

* bribing a foreign official

* failing to prevent bribery

We deliberately highlight the last of the above offences, as this is perhaps the area of biggest potential danger for most businesses and also constitutes the method by which a business can protect itself from possible prosecution (please see further below)

Penalties

Up to 12 months or a fine on summary conviction. Up to 10 years imprisonment on indictment and unlimited corporate fines which results in potential criminally responsibility for bribery by business partners worldwide if your business was intended to benefit or benefits, directly or indirectly. It also appears likely that any business or individual convicted will be prohibited from succeeding in applying for a public sector contract.

Wide ranging implications

All businesses, however large or small will be responsible for adequately vetting suppliers, agent or contractor to be satisfied that such third parties also comply with the Act, irrespective of location. As a result, businesses are advised to run due diligence tests on trading partners.

Mitigating the risk

Thus far the Ministry has set down six Principles for Bribery Prevention as good international practices but it should be remembered that every business will need to tailor its policies and procedures so that they are proportionate to the nature, scale and complexity of its activities. Clearly there are a huge variety of circumstances; small and medium sized organizations will face different challenges compared to large multi-national enterprises.

The key principles are :-

  • The need for risk assessment to determine whether a business has the in-house expertise to deal with obligations in the Bribery Act or whether external professional consultants should be employed to do so.

  • Assessment of internal risks which could include deficiencies in employee knowledge of a company’s business profile and understanding of associated bribery and corruption risks and the company’s compensation structure or lack of clarity in the policy on gifts, entertaining and travel expenses.
  • Country specific  risks

  • Transaction specific risk

  • Partnership risks – this risk could include those involving foreign business partners located in higher-risk jurisdictions, associations with prominent public office holders, insufficient knowledge or transparency of third party processes and controls.
  • A business will need to demonstrate “top level commitment” to preventing bribery by creating a culture where bribery is never acceptable, ensuring the organisation has a policy on bribery which is clearly communicated to all levels of management, the workforce and any relevant external parties.
  • Adopting a zero tolerance policy towards bribery and corruption and publicly announcing the consequences of engaging in such prohibited behaviour for employees and management.
  • Extending this proscription to all business partners through anti-bribery and corruption terms and conditions in contracts with business partners and to avoid doing business with others who do not commit to doing business without bribery. This requirement would mandate that a top-level statement may be made public and communicated to subsidiaries and business partners.

Bribery is a common occurrence – some recent examples

  • Allegations against Deutsche Telekom head Rene Obermann in relation to allegations that some of the company’s Eastern European businesses used bribes to influence regulators
  • Allegations made against Daimler Benz which resulted in the company admitting bribery and paying out $185 million to the US Justice Department and the Securities & Exchange Commission

For more information about how we can help with cost effective guidance or services related to the Bribery Act and anti-corruption, please get in touch.