5th September 2016The Bribery Act – doing business a favour?

Before the passing of the Bribery Act 2010, offering prospects or clients lavish corporate hospitality ahead of an important deal or contract might not have raised too many corporate eyebrows in some quarters. After all, there were many countries around the world where it was the accepted norm that wheels had to be oiled and palms greased in order to facilitate trade negotiations of any kind.

However, when the Act became law in July 2011, all this was set to change. Amongst its provisions it created new offences of bribing another person, accepting a bribe, and bribing a foreign public official. On its enactment it was heralded as the “toughest anti-bribery legislation in the world”.
The definition of bribery in the act is broad and includes offering, promising, giving or receiving a financial or other advantage where the intention is to encourage the recipient to act improperly in an official or business function. It doesn’t just cover cash inducements but also includes gifts, entertainment, and holidays.

Keeping within guidelines

The UK government has always made it clear that the intention of the act was not to prohibit corporate hospitality and gifts, rather to prevent inducements and bribes being offered that go well beyond what would be considered reasonable in the normal course of business.

Today, more and more businesses are demonstrating that they have anti-bribery policies and procedures in place, especially when tendering for contracts. These polices commonly include information on how the risks of bribery are reduced and controlled within the organisation, rules about accepting gifts or hospitality, guidance on conducting business and negotiating contracts, and rules on how conflict of interest is dealt with internally.

Many organisations now give staff specific training in identifying the risks, and set out the rules in their staff handbooks to ensure that all employees are aware of the standard of conduct expected of them in their business dealings. Where companies use third-party agents and external business introducers, it’s particularly important that they too understand and abide by the company’s policies.

Practical advice for businesses

Given that no business owner, large or small, wants to be sentenced to 10 years in prison for being in breach of the terms of the Act, taking a few sensible measures makes good business sense.

It’s important, especially during the negotiation of any contract, to look beyond what might be seen as gestures of good will, like gifts, business favours, ‘mates’ rates’, free advice or any advantageous deals, and to be sure that these actions aren’t being offered as a bribe.

Many organisations, especially in the corporate sector, protect their staff from bribery allegations by prohibiting the receipt of gifts of any sort. Other businesses permit their employees to accept small gifts in certain defined circumstances, but stipulate that they must be recorded in a company register kept for this purpose.

Fundamentally, every firm needs to consider what the appropriate policies are for their type of enterprise. Large multinational companies operating in many different countries and using third-party agents to negotiate deals on their behalf will have to address a wider range of potential bribery scenarios than a small-to-medium sized firm that doesn’t trade outside the UK.

During her leadership campaign, Theresa May promised she would ‘get tough on irresponsible behaviour in big business’. As the UK searches for new trading partners post-Brexit, it will be more important than ever that the UK can clearly demonstrate that it conducts business with fairness, transparency and honesty at every level.