Acting on bribery is now a must for all businesses
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Helen Grant, prospective
Conservative parliamentary candidate for Maidstone and the Weald,
opens the new reception facilities at Gullands solicitors in Mill
Street, Maidstone, with managing partner Richard Cripps, right, and
chairman Blair Gulland.
In April the government confirmed that the Bribery Act will come
into full force from July 1, and published further guidance to help
businesses understand how the Act will affect them.
The Act has generated much discussion and many myths have arisen
around it, the most preposterous being that corporate entertaining
will be disallowed. The good news is that corporate entertaining,
and many businesses, are largely unaffected by the legislation.
As a refresher, the Bribery Act:
* Replaces old and fragmented legislation to provide a
modern and consolidated Bribery law
* Creates offences of offering or receiving bribes either
in the UK or abroad, in the private or public sectors
* Creates a discrete offence of bribing a foreign official
in order to obtain or retain business
* Creates an offence for commercial organisations failing
to prevent bribery, but offers a defence for them to show that they
have "adequate procedures" in place
* Penalties range from fines to terms of imprisonment.
Hospitality
It is likely that the threshold required before the SFO
prosecute as a result of providing hospitality will be a high one.
Taking clients to sporting fixtures or cultural events is unlikely
to be an offence, unless the hospitality is intended to bring about
improper performance. However timing should be considered; for
example, lavish hospitality to an organisation or its members prior
to the commencement of a tendering process is quite likely to be
caught.
In relation to foreign public officials (FPO) this is more
problematic; simply paying for legitimate expenses incurred by the
FPO when promoting products or services to them would be allowed. A
test when looking at for providing hospitality to an FPO is whether
it might in itself be intended to influence his or her decision in,
say, awarding business under a tendering process. Is the
hospitality commensurate with the reasonable and proportionate
norms for the particular industry?
Facilitation payments
The government recognises that in certain parts of the world and
in certain industry sectors facilitation payments are known to be
prevalent. Facilitation payments are defined as 'unofficial
payments made to public officials in order to secure or expedite
the performance of a routine or necessary action'.
Factors tending in favour of prosecution for facilitation
payments include large or repeated payments, and payments that are
planned for and are accepted as a standard way of conducting
business.
Factors tending against prosecution include small and isolated
payments to do something routine, such as stamping a passport. It
is important that organisations have a clear and appropriate policy
setting out procedures an individual should follow if facilitation
payments are requested and are able to demonstrate that they have
been followed.
So what should businesses do?
Following widespread concern and confusion the government
decided to delay implementation of the Act and published guidance
designed to explain how business will be affected by and what they
should do to comply with the new legislation. The guidance is based
on six principles:
* Proportionate procedures
* Top-level commitment
* Risk assessment
* Due diligence
* Communication and training
* Monitoring and review.
These principles are said not to be prescriptive, but are
intended to be flexible and outcome focused. Bribery prevention
procedures should be proportionate to risk, and will vary depending
upon the size of the organisation and sector of industry in which
they operate.
This law must be taken seriously but small or medium sized
businesses which face minimal bribery risk will require relatively
minimal procedures to mitigate those risks. The starting point is
to carry out a risk assessment and to then put in place appropriate
procedures and practices within the organisation.
David Brown is a partner and head of the construction
department at Gullands Solicitors. He can be reached by email:
d.brown@gullands.com. Visit www.gullands.com for more
information.
Monday, June 13 2011
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