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Bribery? What Bribery?
By Christopher J Sherliker

To give any financial or other inducement to a person to perform his or her duties improperly is an act of bribery. It always was, but when the new Act comes into force, criminal liability may fall on the business organisation for the activities of, say, an employee or agent acting on its behalf. An offence is committed under the Bribery Act even if the activity that gives rise to the bribery occurred overseas. Businesses can and should take steps to minimise the risk of prosecution.

So What Should a Business Organisation Do?

  1. Carry Out a Risk Assessment and Due Diligence
    Most businesses have little risk of falling foul of the Bribery Act. Some may have a moderate risk and others a substantial risk. It is the responsibility of every business organisation to assess and define the level of risk it might face. Businesses that operate in market sectors or countries where bribery and corruption is prevalent will face a greater risk than a small, domestic retail business.
  2. Put a Policy in Place
    You have to be able to demonstrate that the organisation will not tolerate bribery. The nature of the policy should reflect the extent to which there may be a risk. In other words, the policy must be proportionate and appropriate for the size and nature of your business and the likelihood of an offence taking place.
  3. Have Procedures in Place
    Having assessed the risk and created a policy, there must be procedures in place to reduce this risk. Again, the procedures should be proportionate for the size and nature of your business, market sector and geographical operation.
  4. Communicate and Train
    Ensure that your staff and anyone who does business on your behalf is aware of your policies and procedures, and consider whether training might be required.
  5. Review and Monitor
    Keep your policies and procedures under review and monitor their operation.
  6. Do not Panic
    Take the threats posed by the Bribery Act seriously, but be sensible. It is not necessary to go overboard. To avoid prosecution you will have to be able to demonstrate that you have made a risk assessment and that you have clear policies and procedures to prevent bribery occurring. “Proportionality” is the key word.

What about the Freebies?

Rest easy. It is not the intention to put a stop to genuine hospitality or promotional spending that is reasonable and proportionate for the sort of business you undertake. The business lunch, tickets to sporting or cultural events and other gifts intended to reflect good business relations may still be given and received.

Facilitation payments, however, are bribes.

A Final Thought

When discussing the Bribery Act with a client recently who carries on business in The Philippines, the client commented, “…they don’t call them manila envelopes for nothing!”. No more it would seem.

Added: 19th May 2011

Christopher J Sherliker is a partner for Silverman Sherliker LLP who provide legal solutions across a spectrum of requirements.  Find out more about Silverman Sherliker LLP.

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