Bribery Act

This information is from the Institute of Directors website.  

The Bribery Act and your business

The Bribery Act will make it necessary for small businesses to put new policies in place, and could change the way you manage client relationships and secure contracts. It was originally due to come into force this April, but is now coming into force on 1 July 2011.

What is the Bribery Act?

The Act will replace existing anti-corruption statute and common law — laws which have been decided by judges based on the outcome of cases. The Act outlines four offences of bribery and introduces a new corporate offence of bribery, and at the same time makes it easier to prosecute offenders.

In summary, the Bribery Act will:

·         Introduce a corporate offence of failure to prevent bribery by persons working on behalf of a business. A business can avoid conviction if it can show that it has adequate procedures in place to prevent bribery.

·         Make it a criminal offence to give, promise or offer a bribe and to request, agree to receive or accept a bribe either at home or abroad. The measures cover bribery of a foreign public official.

·         Increase the maximum penalty for bribery from seven to 10 years imprisonment, with an unlimited fine.

Guidance has been published to help businesses adopt procedures to prevent their employees from committing bribery, to help business owners understand the difference between bribery and hospitality, and avoid falling foul of the Act. As well as advising on anti-bribery procedures the guidance includes practical case studies on hospitality, facilitation payments and joint ventures.

How can I prepare for the Bribery Act?

Now that the guidance has been published, firms must go through a process of understanding what the Act means and what it entails. It will be a bit of a grey area for a while, until the courts have started interpreting and applying the test.

You will have to be prepared to review what you do, who you’re working alongside, who you’re contracting with and how you’re maintaining those client relationships. You will also have to make your workforce aware of what is expected of them, by including it in your published policies.

Will the Bribery Act actually have much of an impact on my firm?

It depends on the type of firm. If you do foreign business and large value contractual work requiring governmental consents then it will almost certainly have an effect on you. For firms dealing with consumers, such as retailers, it won’t have much effect at all.

If you deal with foreign companies or officials in some countries, it is the norm to pay fees to facilitate what government officials should do anyway and to speed up the process — it’s not even frowned upon. However, the Bribery Act will also apply to UK firms abroad which will mean that such facilitating payments could well be considered a bribe.

For those that negotiate deals and contracts with other companies and government officials, you will need to ensure that your hospitality is proportionate. It will still be fine to take a client for a meal at the local restaurant, but disproportionately lavish gifts may be considered an offence under the new Act.