Despite the Bribery Act 2010 coming into effect in July 2011 it is estimated that around 70% of small businesses have either not heard of the Act or do not understand its implications.
Whilst the anti corruption legislation will undoubtedly be more of a concern to larger, international companies, with strict penalties of up to 10 years imprisonment (for individuals) and unlimited fines (for organisations) even small business’s cannot afford to ignore the impact of the Act.
What is the Bribery Act 2010?
The Act essentially creates four new criminal offences; being bribed, bribing another, bribing a foreign official and failing to prevent bribery. The final offence means that your business can be liable for the actions of a third party, such as an employee or consultant, if they breach the Act, even without your knowledge.
Is there a defence?
The Ministry of Justice has been clear that provided a business has ‘adequate procedures’ in place to prevent Bribery and corruption then this will be an absolute defence for that business.
Tips for Businesses
- Risk Assessment – you should carry out a risk assessment on your business’s operations to identify areas of risk and concern. Any measure that might then be required can be tailored to specific operations – such as trade in countries identified as being high risk.
- Top level commitment – ensure that all directors and senior management are fully aware of the implications and scope of the Act – ensure that any training is recorded.
- Anti Bribery Policies – have clear anti bribery and anti corruption policies in place.
- Due Diligence – assess the risk of corruption before entering into any new business relationships. Review existing contracts that your business has in place and consider having your business’s anti bribery policies incorporated into future agreements.
- Communication – ensure any anti bribery policies are clearly communicated to any employee’s or third parties providing services to your business. Consider what training is necessary. Any communication should be accurately recorded for future reference
- Monitoring and review – review policies and procedures regularly to allow you to adapt in line with changing risks and threats.
Hospitality and Expenses
The Bribery Act is not intended to prevent genuine, proportionate hospitality and other business expenditure which is required to promote better public relations. However any such expenditure must be reasonable and in line with your business.