As the net starts to close, the Bribery Act prosecutions begin

As we have written before, the Bribery Act 2010 is a law with undoubted teeth. Fines are potentially unlimited, and custodial sentences can be up to ten years.

And the liability is personal, not just corporate: in other words, the fines are paid by individual directors and company officers, and it is individual directors and company officers who must serve the jail time.

Nor is ignorance a defence: even if they didn’t know that bribes were being paid or accepted, directors can still be potentially liable. And senior company officers who knew—but turned a blind eye—are much, much more culpable.

So right now, directors at AIM-listed international construction industry consultants Sweett Group are probably breathing a sigh of relief.

That said, they didn’t get off lightly.

The cost of non-compliance

In February, the firm was fined £2.5 million for an act of bribery in connection with a hotel construction project in Abu Dhabi. And in addition to its own not inconsiderable defence costs, there was a £95,000 bill for prosecution costs.

Put another way, at a stroke, a sum well in excess of a normal year’s profit was wiped out.

One observer has spoken of the firm’s “breath-taking naïvety in attempting to cover its tracks”, and remarked that individual directors were lucky to escape more serious personal consequences.

And Sweett Group, experts say, will probably be followed by many more hapless firms, as momentum gathers. Already, in early April, a civil action has been settled by Glasgow-based logistics firm Braid Logistics, which has paid £2.2 million to the Crown after discovering corrupt payments being made by members of its staff.

What to do?

What these cases highlight is that two cosy assumptions—both very prevalent in boardrooms—are very much mistaken.

First, that enforcement will be directed at larger businesses, and that smaller companies can therefore relax.

And second, that putting a Bribery Act policy in place will somehow magically make the problem go away.

Because enforcement is being directed at smaller companies, as well as large ones. And Bribery Act compliance requires a lot more than a merely having a policy: it’s necessary to ensure than compliance is instilled deep in the organisation’s culture.

As a test—given that your business may already have a Bribery Act policy in place—ask a few employees at random to explain it to you. Or ask a salesperson what they’d do if a potential customer asked to be taken to dinner at his favourite restaurant.

How we can help

Here at The Legal Director, Bribery Act compliance isn’t a hypothetical service offering, to be pulled off the shelf should a client ask for it.

Instead, we have expertise that has been finely-honed on maintaining compliance with the United States’ Foreign Corrupt Practices Act, upon which the United Kingdom’s own Bribery Act is modelled.

And in particular, we can help you with three distinct aspect of Bribery Act compliance:

  1. An audit of your present state of Bribery Act compliance, including a ‘red flag’ review of risks such as (say) overseas distributors or agents
  2. Advice, training and policy preparation in respect of bribery and related areas, such as corporate hospitality and gifts
  3. Specific advice and help if non-compliance has already become an issue.

Don’t delay

The Bribery Act isn’t going away. You can’t assume that you’re too small for the enforcement authorities to be bothered with. And—critically—you can’t assume that compliance with the Bribery Act will somehow just happen, and that everyone in the business shares the same strong moral compass.

Here at The Legal Director, we specialise in providing clear-cut legal advice in business-friendly language. And providing it affordably, to suit a business’s own needs and workloads.

So for straightforward advice on Bribery Act compliance, or for help in delivering that compliance, email Rob Atkinson at robert.atkinson@thelegaldirector.co.uk or call us at any time on 020 3755 5099. 

   

Posted Sunday, May 1st, 2016 by Warren Ryland

 

 


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