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What can you do to protect your business from risk and prosecution under the Bribery Act?

02 May 2014

Neil Dwyer, Head of the Employment team at Hay & Kilner, is helping businesses take action to comply with the Bribery Act.

As the three year mark approaches since the Bribery Act was introduced, now is a good time to review matters. In response to the new law, many businesses commenced steps to ensure compliance, without implementing them fully and some did nothing at all. It appears that the absence of publicised enforcement action has caused good intentions to be left on the back burner.

There are signs that all that is about to change and businesses now need to act to put preventative measures in place.

Whilst Bribery Act prosecutions were initially slow, they have picked up pace over the past year. In August last year the Serious Fraud Office (SFO) brought its first prosecution under the Act against three individuals who were charged with offences of making and accepting a financial advantage. In March this year, five individuals appeared in Birmingham Crown Court on Bribery Act offences and in April the National Crime Agency arrested thirteen individuals for corruption. There are indications more prosecutions are in the pipeline.

By way of a reminder, the Bribery Act created new criminal offences of:

  • offering or receiving bribes;
  • failure to prevent a bribe being paid on behalf of a commercial organisation; and
  • bribery of foreign public officials.

As an employer you can be held responsible for acts of bribery committed by “associated persons”, which includes your employees, agents or contractors.

How can an employer defend itself?

A defence is available to employers who have adequate procedures in place to prevent bribery.

Guidance requires businesses to focus on six high-level principles and advocates a “risk-based proportionate and common-sense approach to the design of policies and procedures“. With this in mind, at Board or Senior Management team level employers should carry out the following tasks:

  • Conduct a risk assessment of all activities to identify where a risk of bribery may arise;
  • Confirm top-level commitment to establishing a culture within which corruption is eliminated and appoint a senior officer to be directly responsible for overseeing the anti-corruption programme;
  • Carry out a due diligence assessment before any major business relationship or project;
  • Prepare clear policies and procedures to minimise the opportunity for corruption. This is to clarify the approach that those responsible should take when negotiating contracts, and because bribes can be disguised as legitimate business expenses, there should be a clear policy on gifts and entertainment;
  • Ensure effective implementation and the policy must be publicised to employees and all “associated persons” with financial controls in place to minimise the risk of bribery; and
  • Monitor and review the policy on a regular basis.

In carrying out these steps, your business will be in a better position to avoid risk and prosecution.

Is there any benefit from “corporate self-reporting”?

The previously held assumption that self-reported misconduct would lead to a civil settlement being offered rather than criminal prosecution has been changed by new guidance, which states that self-reporting will not automatically avoid this. Instead, to be relevant, it must form part of a “genuinely proactive approach” adopted by your corporate management team.

Hay & Kilner’s employment team offers a free audit and gives advice on implementing the correct protective policies.

Please contact Neil Dwyer or Sarah Hall for further information or advice.