Whilst the Bribery Act 2010 takes a tough stance on corruption, it is not intended to stop all forms of corporate hospitality or prevent businesses from giving gifts. So where is the line drawn between an innocent gift and a potential bribe? And how can you ensure your business acts appropriately?
Most businesses are unaware that the Bribery Act exists – until it’s too late. The distinction between a bribe and a corporate gift is sometimes unclear. Corporate gifts or hospitality are not criminalised in the Bribery Act. Those that are reasonable and proportionate are quite acceptable.
Three key factors should be considered to identify whether the gift offered is acceptable: intention, value and timing. A bottle of wine to say thank you to a customer is usually acceptable but any gift or freebie intended to induce the recipient to make a business decision in favour of the giver is definitely not okay. Consider whether the value of the gift is relatively modest for your industry. There is no specific limit to the acceptable value of a gift and a common sense judgement is required. A bottle of wine may be appropriate but an expensive bottle of vintage champagne may require closer scrutiny.
Modest gifts given around Christmas will not raise too many eyebrows. However, gifts given at the time of a tender or during a dispute could be considered a bribe, no matter how innocent they may be. Essentially, openness and transparency is vital when receiving any gifts or corporate hospitality. A clear staff policy for staff and a register to log all items is recommended. Take specialist legal guidance and make plans to protect your business from bribery. The Act defines bribery as:
“… giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so. This could cover seeking to influence a decision-maker by giving some kind of extra benefit to that decision maker, rather than by what can legitimately be offered as part of a tender process.”
To prove bribery, the prosecution must show that the hospitality or gift provided an advantage to another person and was given or offered to induce the person to not act impartially, or in the clear knowledge that accepting the gift or hospitality was improper. A business could be found guilty of failing to prevent bribery if it cannot show ‘adequate procedures’ are in place to prevent it. There are six key principles to follow:
- Proportionality – actions should be proportionate to the risks faced
- Top level commitment – the approach to prevent bribery should be led from the top
- Risk assessment – to identify level of risk
- Due diligence – the onus is on you to know who you are employing and that they can be trusted
- Communication – clearly communicate your approach to bribery to staff and others. Have a written policy statement so that everyone in your organisation knows and understands what is expected of them.
- Monitoring and review – monitored and review procedures regularly to ensure they remain adequate.
If you suspect an employee has accepted bribes, consult your legal team and investigate allegations as early as possible. Check whether your business can prove that adequate anti-bribery procedures were in place. Depending on the circumstances involved, it may be appropriate to initiate a Deferred Prosecution Agreement (DPA) to avoid a prosecution. Ultimately, the Bribery Act ensures that businesses do not gain unfair advantage through corporate gifts.