Author: Azizur Rahman
29 November 2016
3 min read
Prevention is better than cure. And nowhere is that more obviously the case than with bribery.
If you prevent bribery, your business can flourish without the burden of illegal expenditure and the constant threat of investigation, prosecution and possible conviction. Curing such a problem can prove costly in terms of time, money and reputation.
In the UK, the Bribery Act 2010 has become arguably the toughest piece of legislation in the world when it comes to tackling corruption. There have not yet been many Bribery Act prosecutions but that is likely to change as the authorities complete more investigations and become more familiar with using it.
Anyone looking to make sure they are not prosecuted under the Act may have noticed that the International Standards Organisation has issued the first ever global standard for anti-bribery compliance programmes. This standard, known as ISO 37001, provides guidance on introducing and maintaining anti-bribery systems in the workplace.
There is an argument that says those that need anti-bribery procedures should already have them. But that does not appear to be the case.
Research just published by the Henley Business School found that more than 85% of UK managers operating internationally are using bribery as a normal practice in what are called “emerging markets’’.
The dangers of this are clear. The Bribery Act covers all companies based in, or with a close connection to, the UK. They can be prosecuted under the Act in the UK for bribery that was carried out on their behalf anywhere in the world by their staff, intermediaries, third parties or trading partners. Penalties of up to ten years in jail and unlimited fines do not appear to be preventing managers using bribery, at least according to the researchers at Henley.
But such activity by managers is putting their companies at risk; even if they believe they are merely maintaining a business relationship rather than obtaining a particular reward. Companies have to be looking at preventing this. The question is how.
Companies need to be aware of all the risks of bribery in the business sectors and countries where they operate.
Being aware of the risk is only part of a company’s responsibility. Section 7 of the Bribery Act makes it an offence to fail to prevent bribery. This is why it is so important for a company to have its vulnerability to bribery assessed and then appropriate staff training and anti-bribery procedures introduced. The training has to be in-depth, ongoing, subject to regular monitoring and review and communicated and implemented to all staff. If the upper echelons of a company are not seen to be taking action against bribery, there is little chance of the rest of the workforce taking prevention seriously.
As it takes two parties to be involved in bribery, a company must carry out thorough due diligence on any individuals or organisations it trades with.
Some people reading this – possibly some of Henley Business School’s 85% - may wonder how they can meet the demands of the Bribery Act. Legal advice is available and should be sought whenever necessary.
Ignorance of the law is no defence. If your company employs a manager who makes up part of that 85%, you need to seek legal assistance immediately. You cannot stumble on, paying no attention to the risk of prosecution and the possible damage that could be done to your company.
Any discussions between you and your solicitor are subject to legal professional privilege; meaning that you can talk through the problems in privacy before deciding on what course of action to take.
One possible course of action is using your solicitor – or one more familiar with white collar crime issues – to conduct an internal investigation to assess the nature and scale of the bribery. Such an approach can help a company if and when it decides to self-report any wrongdoing, as it shows that it has taken steps to address the problem. This, in turn, can help the company obtain a deferred prosecution agreement (DPA), whereby prosecution is suspended if it meets certain conditions; such as paying a fine or compensation or cooperating with the prosecution of individuals.
But any hope of leniency from the authorities will be dashed if a company cannot show it has done what it can to prevent bribery.
Aziz Rahman is Senior Partner at Rahman Ravelli and its founder. His ability to coordinate national, international and multi-agency defences has led to success in some of the most significant corporate crime cases of this century and top rankings in international legal guides. He is recognised worldwide as one of the most capable legal experts regarding top-level, high-value commercial and financial disputes.