The Bribery Act 2010
All businesses and individuals now need to be aware of new bribery legislation which came into force on 1st July this year.
The Bribery Act describes actions which involve “a financial or other advantage” being offered or received in exchange for “a business function or decision to be carried out improperly” as being potentially criminal.
The Bribery Act outlines four main criminal offences. The first two are fairly self-explanatory – the offence of bribing someone else, or the offence being bribed. It is the next two offences which have made much news in the business community. One relates to bribery of foreign public officials. But the offence which should be of particular importance to commercial organisations relates to an organisation’s failure to prevent bribery, which is punishable by unlimited fines, being disbarred from public procurement, or directors being disqualified for up to 15 years.
A company or organisation will be liable under the Act if an employee or agent performing services on its behalf pays a bribe with the intention of obtaining or retaining business or a business advantage to that company. However, the company would not be liable if it can demonstrate in its defence that it had sufficient anti-bribery policies in place.
There has been much speculation about corporate hospitality and whether this is an offence under the Act. The government’s guidance on the Act states that bona fide hospitality and promotional or other business expenditure which seeks to improve the image of a commercial organisation, or establish cordial relations, is recognised as an established and important part of doing business and it is not the intention of the Act to criminalise such behaviour. Therefore taking clients to Wimbledon or to Formula 1 Grand Prix to get to know the client better would not fall foul of the Act. But, whilst the Guidance endorses reasonable and proportionate hospitality and expenditure, any extremely lavish expenditure may be viewed as bribery and a potential offence under the Act.
Businesses need to check that they have correct procedures in place to protect them and their staff from allegations of bribery. It may well be the case that an exclusive foreign trip at your client’s expense will be a thing of the past!
For more information on the Bribery Act please contact Wayne McBean on 01582 513303.