Beware of sweeteners

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Beware of sweeteners

As we approach the fifth anniversary of The Bribery Act 2010, Andrew Frake from asb law looks at how and why all businesses should be up-to-date on the regulations.

A revolutionary piece of legislation, the Bribery Act 2010, codified offences of bribery and corruption empowering UK prosecutors to pursue overseas offenders and creating new offences for corporations which fail to prevent bribery, and officers of companies who allow bribery to occur within their organisations - even if they were not personally involved. 

The biggest controversy of the Bribery Act was the creation of a strict liability offence where an individual associated with a corporation commits an offence of bribery with the intention of obtaining or retaining business for the corporation. Regardless of whether any other individual within that organisation was involved or even aware of the commission of the offence, the corporation would be guilty of an offence of failing to prevent bribery and would be liable to a criminal record and a severe fine. The only defence available to the corporation is that it has taken adequate steps to prevent bribery.

 

To help achieve this, the Ministry Of Justice guidance set out 6 principles for companies to follow:

  • Proportionate procedures
  • Top-level commitment
  • Risk assessment
  • Due diligence
  • Communication (including training)
  • Monitoring and review

The critical aspect of the Act for those individuals and corporations which trade overseas is the requirement to carry out your business activities with a level of probity expected of a reasonable person in the UK. Consequently, where you engage in trading activity within a jurisdiction renowned for corruption, the expectation on you is as if you were trading in the UK.  

 

Unlike many other countries which have implemented similar legislation, the UK also prohibits any kind of facilitation payment to foreign government officials to carry out their existing duties. This created significant concerns that the Act would be detrimental to the UK’s ability to trade in developing economies.

 

Making an example

The response to the Bribery Act from large corporations was largely positive with active steps taken to implement anti-bribery policies and procedures and provide education and training for their staff. A continuation of that attitude would leave those corporations in a good position to defend an allegation that they had failed to prevent bribery in the event of an isolated incident. However, some SMEs remain under prepared with many business leaders still unaware of the act’s implications.

 

One reason for this apathy at the mid-corporate level may be the lack of high profile convictions under the Bribery Act and, for a long time, the complete failure of prosecutors to secure a single conviction of a company for failing to prevent Bribery. 

 

In February 2016, that position changed with the Serious Fraud Office securing its first corporate conviction against the international property surveyors, Sweett Group PLC which was ordered to pay a fine of £2.25M for failing to prevent an employee paying a bribe to retain business with the Al Ain Ahlia Insurance Company in the UAE. The body has promised further prosecutions in the near future.

 

The UK government also continues to explore the possibility of implementing new offences for failing to prevent a range of economic crimes beyond bribery. Consequently, the onus to tackle corruption both in the UK and overseas is being firmly placed on corporations and their officers.

 

This article was published in the Travel Trade Gazette on 30 June 2016. 


Andrew Frake, Associate, Dispute ResolutionIf you would like to discuss the implications of The Bribery Act, or any other legal concern, contact Andrew Frake, Associate.

View Andrew's profile email Andrew now

 

Published: 27 Jul 2016


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