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Six principles for bribery prevention

August 05th, 2015 - Posted by Sam Hemmant in Anti-Bribery And Corruption

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The UK Bribery Act 2010, which came into force on 1st July 2011, replaced legislation dating back to 1889 and affects all businesses operating in the UK.

Offences

The offences of giving and receiving bribes and bribing foreign public officials apply to all UK corporate entities, even if they are foreign owned.  Ignorance of the law is not a defence and companies can fall foul of the legislation even if the offence was unknowingly committed by an individual within, or associated with the company.

An offence is committed by a commercial organisation when a person "associated" with it, in other words somebody who performs services for or on behalf of the organisation, bribes another person.  The definition of a bribe is something that is intended to obtain or retain business for the commercial organisation or retain an advantage in the conduct of the organisation's business.

Associated persons

The legislation necessarily gives a wide definition of "associated persons" which, in addition to employees, can include suppliers, contractors and agents.  This could therefore extend to estate agents, auctioneers, marketing agencies, private investigators and even lawyers.

While it may seem like companies cannot necessarily control the actions of its associated persons, particularly when the company has outsourced specific tasks to third parties, it is a defence if the organisation can show adequate procedures were put in place to prevent bribery being committed.

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Six principles for bribery prevention

The Ministry of Justice has issued six principles for bribery prevention that should be a crucial focus for organisations of any size, particularly if there is an increased risk by conducting business in a number of different countries, where 'facilitation payments' may be culturally accepted and even standard business practice.

1. Proportionate procedures

The policies and procedures a commercial organisation has in place to prevent bribery should be proportionate to the bribery risks the organisation faces.  Procedures should be aligned to the nature, scale and complexity of the organisation's activities, while also being clear, practical, accessible and effectively implemented and enforced.

2. Top level commitment

The top-level management of a commercial organisation is defined by the nature of the individual company.  It can be the board of directors, the owners of the company or any other equivalent body or person.  Top-level management should be demonstrably committed to preventing bribery by a person associated with it, fostering a culture within the organisation in which bribery is never acceptable.

3. Risk assessment

For any anti-bribery process to be consistently effective, the organisation must assess the nature and extent of its exposure to potential external and internal risks of bribery on its behalf by persons associated with it.  The assessment should be periodic, informed and well documented. As business operations change and evolve, so will the risk facing the organisation and it is therefore imperative for regular re-assessment to be undertaken.

4. Due diligence

Due diligence procedures must be applied, taking a proportionate and risk based approach, with regard to the individuals who perform or will perform services for or on behalf of the organisation.  This is crucial if identified bribery risks are to be mitigated.

5. Communication

Organisations need to ensure that that bribery prevention policies and procedures are embedded and understood throughout the organisation, via both internal and external communication.  Communication should include training that is proportionate to the risks the organisation faces.

6. Monitoring and review

As an overarching principle, organisations should monitor and review procedures designed to prevent bribery by persons associated with it and make improvements where necessary.

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