The UK government is continuously cracking down on companies giving, authorising or receiving a bribe themselves or through an agent. Although in some countries bribes are necessary to secure contracts or business, in the UK they are now unethical and unlawful under the Bribery Act 2010 which came into force on 1st July 2011.

The Act applies to all UK based companies, businesses and individuals. Be aware that other European countries still allow bribes; if you’re competing against a European company for business you may lose out. Adequate systems should be in place to assess the risk and to ensure such payments are not made. Non-compliance will lead to fines and other severe consequences for the company and its’ directors.

What is considered a bribe?

The act introduces four new offences:

1. Bribing another person

2. Being bribed

3. Bribing a foreign public official

4. Corporate offence of failing to prevent bribery

Facilitation payments  This includes unofficial payments made to other companies, individuals or public officials to win contracts. Using a middle man to broker a deal does not alleviate responsibility. Examples of a facilitation payment could be a building contractor paying a councillor to get planning permission, or commission paid to an employee of one of your suppliers.

Excessive Corporate hospitality   This includes excessive hospitality or gifts to other companies, individuals or public officials. The decisive factor is whether it is for legitimate business purposes and proportionate or reasonable. Examples of excessive corporate hospitality could be a lavish party when the customer could have simply attended your premises or gifts of gold watches.

Corporate offence of failing to prevent bribery  You need to report bribes which you become aware of. Ignorance is not an excuse as your systems should ensure that no employee has the ability to pay a bribe. This includes failing to prevent or report a bribe that doesn’t come from you or your business, for example, if you lose a contract and suspect a competitor of making a bribe.

What do I have to do?

As well as setting up systems to prevent bribes, the following guidance has been given:

  • The board of directors, owners or equivalent body must establish a culture in which bribery is never acceptable.
  • An organisation must regularly assess and understand the risks of corruption that it faces.
  • Carrying out risk-based due diligence on an organisation's business partners is an essential aspect of managing the risks of bribery.
  • Policies and procedures must be embedded and understood throughout the organisation through internal and external communication and training.
  • Organisations should consider internal processes needed to review anti-bribery policies.

Therefore it is important that you can demonstrate that your business has some sort of safeguard against any of this taking place.

There is also a brief Ministry of Justice guide which can help you identify how high a risk you have.  This can be found on: http://www.justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pd

For further information and advice please contact your Principal Adviser on (01474) 853 856