The Bribery Act 2010 is the current legislation that lays out what can be considered a bribery offence. It also requires organisations to have anti-bribery measures in place. According to the Bribery Act, there are three main offences:
- Giving a person a bribe to have them do something improperly
- Requesting, accepting or receiving a bribe as a reward for doing something improperly
- Using a bribe to influence a foreign official to gain a business advantage.
The Act requires businesses to have robust policies in place that ensure their compliance with the Bribery Act, covering the prevention of direct and indirect attempts at bribery. One example of how a business could be found guilty of a bribery offence is if payments are made or received by an associate of the business acting on their behalf. An associate could be an employee, an agent, or anyone providing a service on behalf of the business. This is the separate offence of failing to prevent bribery and the business can defend such an offence if it has adequate policies and procedures in place to prevent bribery.
If you want your business to be able to defend itself against allegations of bribery, you need to have adequate preventative measures in place. If a business is found guilty of an offence under the bribery act, there could be both criminal and financial consequences. For example, if your business is convicted, it could be banned from taking part in public tenders, which could be a huge blow if you rely on public contracts.
Wherever there are two or more SMEs together in some form of legal agreement, such as a joint venture or a franchise agreement, it is usual for the agreement to contain confirmation that the businesses have the right bribery prevention measures in place. If one of the businesses can’t meet that requirement, then they run a big risk of not being able to complete the deal.
Speaking from my experience as a solicitor, it’s common for banks to request a firm of solicitors to give their opinion on the strength of a business’s anti-bribery and corruption policy. A lot of banks won’t provide loan finance to a business unless they’re satisfied that these provisions are in place. I think that this trend is evidence of the banks’ own anti-bribery policies.
The Ministry of Justice lays out six principles to act as a guideline for businesses who are formulating their anti-bribery policies. Whenever you look to apply these principles, remember that your policies need to be proportional to the size of your business and the risk that you face. Some sectors are more vulnerable to bribery than others.
For the rest of this article, I will provide an overview of those six principles, but I recommend you read the second half of the Ministry of Justice’s guide to the Bribery Act before going any further with plans for your own business.
1. Proportionate procedures
The first principle expands on the point that I made above. It says that your policies should be suited to your individual business, and that any policies you put in place should be clear and accessible to everyone in the company. For preventative measures to be successful, they need to be known by everyone associated with your business.
2. Top level commitment
Anti-bribery starts at the top. It is down to business owners and other top-level staff to establish a culture wherein bribery is never tolerated in any form. There is also a more constructive side to this principle. The top level of a business can make it clear to the rest of the employees that the business is better off by steering clear of bribery, motivating them to seek more legitimate success.
3. Risk assessment
The third principle outlines one of the main practical ways for you to avoid bribery offences. By assessing the risks associated with any sort of business deal or undertaking, you will be better prepared for situations where the risk of bribery is high, and will hopefully be able to avoid them all together. Different situations will have different levels of risk, so make sure that your business is fully committed to high-quality risk assessments, and that you identify all the internal and external sources of information that will allow you to be more effective in this area.
4. Due diligence
Carrying out your due diligence on any business that you are looking to deal with, or any person that may become associated with you is essential. Again, the extent to which this is necessary will vary from situation to situation. Carrying out due diligence is one of the best ways of mitigating or preventing potential risk.
Your business’s anti-bribery policies have to be communicated effectively to everyone associated with you. It is a good idea to provide internal and external training for employees, and to ingrain the policies into the culture of the business. If everyone is trained to identify and avoid bribery, you will significantly reduce the risk of your business falling victim to it.
6. Monitor and review procedures
Many preventative measures will lose their effectiveness over time as the business landscape changes. By continually monitoring your policies and receiving feedback from your associates, you can ensure that your policies stay relevant. I also recommend looking to see if your industry sector has any form of anti-bribery accreditation. Such a certificate would be an important trust signal for your business, and help you to keep up with the industry’s anti-bribery standards.
Faris Dean is a commercial solicitor at Richard Nelson LLP.