Costly Confusion: What UK Businesses Need to Know About the Bribery Act

If you run a business or hold a directorship of a UK company, it is important that you take the time to familiarise yourself with the Bribery Act.

Whilst you may be committed to carrying out business negotiations and transactions in a transparent and wholly legal way, there are certain aspects of the Act which are open to interpretation and this can often lead to confusion.

If you find yourself in a difficult situation, you can get expert help from someone like Slater and Gordon, but in the meantime, it makes sense to understand what the Bribery Act covers and how it impacts your role as a business owner or director.

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Regulations and compliance

Companies and business owners are finding it increasingly more challenging to keep pace with seemingly endless layers of bureaucracy and a whole raft of regulations which they have to stay on the right side of.

The UK Bribery Act is an important piece of legislation and was introduced in its latest format back in 2010. The object of the act was to introduce a new wave of ethical practices that needed to be upheld amongst private and publicly held companies operating in the UK.

One of the fundamental aspects of the Bribery Act is that it sets out to criminalise the facilitation of payments to those involved and this is just one of a number of specific points which every executive should be aware of when encountering a bribery scenario.

Failure to prevent bribery

The Act states that an offence may have been committed if a bribe is paid by an “associated person” on behalf of the company to obtain or retain business or to obtain an advantage,

The term “associated person” broadly defines “anyone performing services” on behalf of the company, so even if a business owner or director does not offer a bribe themselves, they might still be implicated.

This is a challenging issue for any business which is trying to prevent bribery by third parties used to win business.

Adequate procedures

The basic interpretation to take from the Act is that failing to prevent bribery is similar to a strict liability offence.

To counteract an accusation of this nature, you would have to be able to prove that adequate procedures were in place within your business to prevent the bribery in the first place. If you take note of the guidance issued by the Ministry of Justice on this point, they emphasise that adequate procedures will have to include board-level and business-owner commitment to preventing bribery.

In order to ensure that every effort is made to achieve compliance on this aspect of the Act, due diligence and written policies that outline clear procedures and training procedures need to be in place.

Dealing with a bribery situation

There is no question that Directors, company secretaries and managers could be deemed to have committed an offence if they consent to or ignore bribery.

Lavish hospitality and gifts could be construed as bribes, although it should be stressed that the Government has stated that it has no wish to criminalise ordinary business practices, but extra care needs to be taken regarding hospitality and gifts during a formal procurement process.

Take advice specialist advice if you are unsure how you stand with the Act and also be aware that self-reporting is encouraged, under a Deferred Prosecution Agreement.

Owen Parkes is a CEO. He likes to share his industry experiences on the web. His articles are available on many workplace and business sites.

This guest post complies with my policy.

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