What is the Bribery Act?
The Bribery Act is an act of Parliament that has been implemented into UK law in order to not only prevent various forms and elements of bribery, but also to open up how firms conduct their business, and make sure appropriate safeguards are in place to avoid any dishonest activities.
What is bribery?
Bribery itself is defined as both the giving and receiving of bribes in terms of someone who facilitates, gives or receives an advantage (which is usually financial) in connection with a person performing a function improperly.
Why was the Act introduced?
The Act was introduced in response to international pressure from the Organisation for Economic Co-operation and Development (OECD) and in order to bring the UK in line with efforts in other countries, particularly the US.
It was felt that the Government should do more to ensure that companies had appropriate procedures and policies in place regarding activities that could be deemed to be bribery. Previously there were a number of different laws and regulations, both in common law and statute, and the Bribery Act is an attempt to unite them under one piece of legislation.
Following the introduction of the act, a number of guidance notes have been published in order to help businesses understand just what steps they need to take and what procedures they need to have in place to ensure compliance with the act.
Key points for all businesses are as follows:
- There is a full defence if you can show you had adequate procedures in place to prevent bribery. But you do not need to put bribery prevention procedures in place if there is no risk of bribery on your behalf. In other words, so long as you have the correct procedures in place you are unlikely to be liable under the act should a member of staff act independently.
- Hospitality is not prohibited by the Act: Firms should not be concerned that they are no longer able to take clients out on ‘entertaining’ excursions. These commonly consist of paying for a night out at a restaurant or for a day at a sporting event. Although these activities are obviously designed to increase business, they are not deemed to be a ‘bribe’ so long as they are reasonable and proportionate. Paying for a client to travel around the world on a holiday would almost certainly not be deemed reasonable and proportionate.
The Bribery Act raises the maximum jail term for bribery by an individual from seven years to ten years and has the power to impose a fine on a particular company of an unlimited scale.
A company is under a positive duty under the act to ensure there are appropriate procedures in place to prevent bribery. If these procedures have been put in place then it is unlikely a company will be punished under the act; it is therefore extremely important that companies are aware of this and act accordingly. Another key point to note is that companies must continue to ensure that any hospitality offered to potential clients is both reasonable and proportionate.