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On 1st July 2011, the Bribery Act (2010) came into force across the UK, making it a criminal offence for an individual or organisation to offer or receive a bribe. The offence carries a maximum prison sentence of 10 years.
A 2011 Fraud Survey poll by Ernst & Young found one employee in seven working at large UK companies said they would be prepared to offer bribes to win business, and one in six said they’d offer personal gifts to win a deal. Only a quarter of respondents said they were aware of an anti-bribery policy at their organisation.
Ernst & Young believe that organisations in the UK should be concerned that their employees have little understanding of fraud and corruption, and that the current climate of cost-cutting could increase the risk of bribery and fraud.
A bribe is described as a “financial or other advantage that is offered or requested with the intention of inducing or rewarding the improper performance of such a relevant function or activity, or with the knowledge or belief that the acceptance of such an advantage would constitute the improper performance of such a function or activity”.
A relevant function or activity is:
Where the person performing it is expected to perform it in good faith, impartially, or is in a position of trust by virtue of performing it.
The Bribery act creates four new offences:
There are also ‘confiscation’ proceedings allowed as part of the act, which means an individual/organisation can have the proceeds stemming from the criminal bribe forfeited.
The last offence (‘Failing to prevent bribery’) is a Corporate offence which in detail is ‘failure by a commercial organisation to prevent bribery that is intended to obtain or retain business, or an advantage in the conduct of business, for the organisation’. This is a crucial area for organisations as they’ll need to show they had ‘adequate procedures’ in place designed to prevent bribery by (or of) persons associated with the organisation, to have a defence against this corporate offence.
So, if a bribe occurs, the company will be expected to show it had adequate ‘bribery prevention measures’ in place. If it fails to do so, the company and its senior executives may be liable. The Act aims to punish those who make a bribe and those who turn a blind eye.
The government advise that for Employers proportionality is key – all businesses must consider the possibility of bribery, but where the business is small and bribery unlikely, they will have a lot less to do. The larger the company, and especially if the company operates in countries where bribery is more commonplace, the greater the need to assess the risk of bribery within the company and with those associated with it. The Act covers people other than employees who are associated with the company and for whose actions the company can be held liable (for example, recruitment firms, commercial agents, joint venture partners, consultants, sub-contractors and freelancers). Bribery, under the act, doesn’t have to take place in the UK (and non-UK companies are also subject to the law if they operate in the UK, regardless of where the alleged bribery took place).
The government, although not defining what these ‘adequate procedures’ are, have published guidance outlining the steps a company must take in order to demonstrate that the briber acted contrary to the company’s expectations.
There are six principles a Company needs to consider:
To minimise the risk of falling foul of the Act, Companies should have:
If you are an Employer and need ongoing professional help with any staff / freelance issues then talk to Lesley at The HR Kiosk – a Human Resources Consultancy for small businesses – our fees are low to reflect the pressures on small businesses and you can hire us for as much time as you need.
Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.