The Bribery Act 2010 became a statute last April. It had cross party support, and was intended to fulfil our treaty obligations. It was due to come into force this April, but is now being delayed.
So what is all the fuss about? And why should SMEs be concerned?
The Act creates two general offences, one of offering, promising, or giving a bribe, and the second of requesting, agreeing to or receiving a bribe. These are offences committed by individuals. There is also an offence of bribing a foreign official, and an offence by a commercial organisation, which includes partnerships, of failing to prevent bribery.
A company officer or senior manager could also be convicted for consenting to or conniving with another person in the commission of a bribery offence.
For individuals the maximum sentence is 10 years imprisonment, for commercial organisations there are unlimited fines.
So what is a bribe?
Apart from the clear cut back-hander to win a contract, the so-called ‘bung’, it could also stretch to excessive gifts and entertainment designed to influence key players in the contract awarding process. In other words the bribe is intended to persuade or reward the other person in what would be an improper performance of their role.
For SMEs it means having clear guidance for employees on what they can offer to customers and prospective customers as well as what they are allowed to accept from suppliers. Is lunch from a supplier allowed, what about an all expenses paid trip to a ‘conference’ where conference time seems to be minimal?
Why should SMEs care?
And what should you be doing now? Firstly, it is unlikely that the Act itself will be abandoned. We have our treaty obligations to meet. Whilst the Guidance itself may receive a major overhaul from the published draft the draft does point the way forward and identify the sort of procedures which all organisations will have to put in place to prevent bribery.
Six general principles were outlined for commercial organisations to address:
- A risk assessment: based on the country concerned, the transaction, and any partnerships involved.
- Top level commitment: the organisation has to be lead from the top with a commitment to eradicate bribery and adopt the appropriate culture.
- Due diligence: a set of procedures to adopt for every transaction.
- Clear, practical and accessible policies and procedures.
- Effective implementation.
- Monitoring and review.
Of course, the burden will fall most heavily on large multi-national companies with complex and high value contracts involving many countries and agencies. But even small commercial organisations will need a written risk assessment and written policies and procedures in force to protect themselves in the event of bribery or acceptance of bribes by their employees or agents.
SMEs should now be carrying out their risk assessments and setting up their procedures so they are ready when the Act finally comes into force.
For more detailed advice on how the Bribery Act affects your business contact Nigel Musgrove on 01285 847001.