UK Bribery Act Guidance

The UK Bribery Act is “The toughest anti-corruption legislation in the world” and has implications for businesses or all sizes.

What are the risks of breaching?

  • Jail sentences of up to 10 years for individual staff members
  • Confiscation orders for individuals & companies
  • Unlimited fines for individuals & companies
  • Direct liability of company directors & managers including striking off
So we’ve probably got your attention by this point. As you can see it’s not worth being caught out..
Main examples of what constitutes a breach
Giving, offering, accepting and receiving bribes in order to behave improperly.
  • The best known is for favourable circumstances in business deals but it isn’t limited to that anything that is seen as improper behaviour
  • This is not limited to public officials it also applies between two commercial organisations
Failure to prevent bribery
  • If you don’t ensure ‘adequate and proportional’ procedures in place this is also an offence
  • Ensuring and being able to demonstrate that adequate policies and procedures are in place is a valid defence
Consenting to bribery
  • Whereby a company director or senior manager has been proven to have consented to the bribery
What constitutes bribery?
  • Cash payments are the most obvious either in order to close a deal, move to the next stage or facilitate a faster service (facilities payments)
  • Excessive gifts which are unproportionate or overly lavish
  • Offers of employment
What isn’t bribery?
You can still take clients and prospects for dinner, lunch and take them to events as before. However this should not be the condition of doing business. A good place to start is to look at what standard practices exist within your industry.
With government officials this goes further whereby there doesn’t need to be any proof that they acted improperly only that a bribe was accepted.

Who does the act apply to?

UK companies whether or not the bribery is committed in the UK or abroad.

E.g. If you have a sales rep in India and they are caught in a bribery situation then not only will you be pursued by the Indian authorities but the UK authorities will also get involved.

 

How do I get compliant?

The following six steps/principals are widely applied in organisations of all sizes:

  1. Proportionate procedures
  2. Top-Level Commitment
  3. Risk Assessment
  4. Due Diligence
  5. Communication and training
  6. Monitoring and review

 

1. Proportionate procedures

Your procedures should be proportionate to the:

  • Size of your business
  • Countries you are operating in
  • Industry you operate in
  • Number of employees

They need to be clearly implemented, practical and accessible. Everyone should know about them and be able to understand them.

 

2. Top-Level Commitment

It is required that the board and directors are committed to preventing bribery. This means that they need to show that they’ve regularly communicated in a clear and unambiguous way their postion to staff.

 

3. Risk Assessment

The risk assessment should cover both external and internal factors.

External factors such as:

  • What countries do we operate in? Some are higher risk than others the corruption perception index is a good place to start
  • How many employees do we have? More employees increases the risk
  • Industries you operate in? Pharmaceuticals, Telco, Mineral extraction, financial services are are examples of higher risk industries

Internal factors such as:

  • What are the functions and divisions of our offices? Highly incentivised sales & procurement teams are more likely to be involved in bribery than say HR
  • How well is training applied across the organisation
  • What systems are in place in order to audit understanding and your own actions

4. Due Diligence 

What 3rd parties do you work with and what sort of controls do they have in place. It’s important to understand how they do business and approach gifts & corporate hospitality.

5. Communication & Training

Policies need to be effectively communicated, they need to have been read and understood and that understanding should have been tested.  The policies should be tailored to give likely examples that could occur to those employees.

6. Monitoring & Review

To what extent are your employees following your policies and procedures. For example, how many corporate gifts have been logged as received? What sort of hospitality is being offered, how often and is it proportional.. What sort of payment authorisation controls are in place, are their spending limits and what are the procedures for going beyond these. What sort of vetting is done before hiring staff.