Numerous headlines have been making the news in recent months, but the coming into force of the Bribery Act 2010 (the “Act”) on 1 July needn’t be as alarming as some would have us believe. With a little thought and implementation of some sensible precautionary measures, for most companies, there is nothing to fear.
It is important that companies ensure that all relevant employees are aware of and committed to the objective of preventing bribery. An offence is committed if a company fails to prevent bribery by those acting on its behalf (this can include agents and intermediaries). There is, however, a defence if a company can demonstrate that it had “adequate procedures” in place to prevent bribery.
The following simple steps will help companies to conduct a risk assessment, and thereby ascertain whether any further measures require to be put in place:
· Does any group company operate in a sector or jurisdiction where bribery, or “facilitation payments”, are prevalent?
· Does any group company work on government sponsored projects, which would mean employees are in regular contact with public officials?
· Does any group company use agents to procure work? This is especially relevant if the group makes use of agents in jurisdictions where the group presence is limited.
· Is there any historic evidence of bribery and/or facilitation payments being made?
· What is the group’s policy in relation to corporate hospitality? Reasonable and proportionate hospitality and/or infrequent gifts are fine, so it is important that particularly lavish corporate hospitality is commensurate with the seniority of the recipient and the industry norm.
For most small, UK based companies, the outcome of this risk assessment may be that there is very little chance that the company will ever face the risk of bribery. In these instances, it will often be the case that sensible precautions will suffice, including clarifying who the company does business with, and satisfying oneself regarding the relevant individuals involved and any risks they may represent.
Regardless of the conclusions drawn from an initial risk assessment, significant events, such as M&A activity or entry into a new market, should trigger a reassessment of the risk faced by the group.
For further information please contact Catriona Brown on 0131 226 8210 or email email@example.com