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Avoid falling foul of the Bribery Act

Follow our guide to making sure your company abides by the Bribery Act when doing business overseas. Andrew Frake of ASB Law explains how

Avoid falling foul of the bribery act
The Bribery Act is attracting much publicity and criticism of its radical tightening of laws relating to bribery and corruption. The corporate hospitality sector, for one, is understandably concerned. “One of the chief concerns is how this Act will impact upon the ability of UK corporates to compete on the world stage,” explains Andrew Frake, assistant solicitor at asb law LLP.

“Many companies still bestow lavish gifts on their clients and prospective clients in the hope of winning additional business,” says Frake. Indeed, in many business cultures around the globe, such gifts are considered an essential element of any campaign to win work and are commonly built into a company’s budget for promotional expenditure.

However, the Bribery Act will mean that any gifts, donations, hospitality or invitations to sporting events may be considered as bribes if they are given with the intention of influencing business decisions of third party organisations. “It is not sufficient for a commercial organisation to rely on the fact that the bribe was given by a rogue employee without their knowledge,” says Frake.

“Section 7 of the Act states that a commercial organisation will be guilty of an offence if a person associated with that organisation bribes another person with a view to gaining an advantage for that organisation. The onus is therefore on the company to prevent their staff giving or receiving such bribes.“ Below is a step-by-step guide to what your company can do to avoid falling foul of the Act.

STEP 1: Ensure that your company has a clear, strict and enforceable policy on what its employees, officers and agents are permitted to do in terms of giving and receiving gifts from people and organisations both in the UK and overseas. Specify the level of gifts that may be given without board approval and which members of staff are permitted to bestow gifts and donations. Keep the limits as restricted a possible. Make sure that this policy is made available to all of your staff and agents.

STEP 2: To complement your policy, ensure that all of your current staff and new employees undergo proper training as to what may constitute a bribe under the new Act and what warning signs they should look out for. This training should include various scenarios which may or may not give rise to an offence under the Act and with multiple-choice answers to allow them to determine for themselves whether they may be compromising themselves or their employer by way of their conduct. Each member of staff who may be in a position to offer or receive a bribe should be required to pass an assessment.

STEP 3: Keep a central record of all gifts and donations that are given by your company and ensure that this record is reviewed on a regular basis. It is important to remember that it is a defence under section 7(2) of the Act if a company can demonstrate that they had in place adequate procedures designed to prevent bribery.

STEP 4: Include as many external facing documents as possible that give a clear message that bribery is not tolerated within your organisation – for example, your standard terms and conditions and tender documents.

STEP 5: Ensure that your staff bestow no gifts or any financial advantage on any foreign official without your knowledge. Bribery of a foreign official is a specific offence under section 6 of the Act and therefore you and your staff must be particularly vigilant in this area. This includes facilitation payments designed to expedite simple bureaucratic processes (still permitted under US law).

STEP 6: The timing of a gift can be critical. Vigilance is always required but this will be even more important when dealing with a client or prospective client that is in the process of inviting tenders for work. Even a gift or donation given after the award of work to your business may be considered a bribe under the Act.

STEP 7: If your company is truly global you may need to adapt your policy to different areas or specific countries. A modest gift in a Western European country may be sufficient to amount to a bribe under the Act in a third world country in Africa. Without over-complicating your policy, make sure that this is clearly reflected.