Does your corporate gift fall within the Bribery Act?
The Bribery Act 2010 received its Royal Assent on 8 April 2010 but this is the time of year when it comes to the fore. December, generally sees the giving and receiving of corporate gifts as a regular occurrence in many businesses. Historically, such innocent gestures of thanks to individuals in other organisations, who have helped in the success of a business through the previous 12 months, were unregulated.
However, a legal framework has existed for the past few years in relation to such practices through the Bribery Act 2010. The Act created a new offence which can be committed by any commercial organisation that fails to prevent persons associated with them from committing an act of bribery on their behalf.
In order to demonstrate that they have complied with the provisions of the law, employers now need to show that they have “adequate procedures” in place to prevent bribery from taking place. The precise measures that constitute an “adequate” response depend upon the nature of the risks that a business faces and the nature, size and complexity of that business or organisation.
Six principles that apply to all businesses
There are however six principles that apply to all businesses in relation to any bribery procedures. These are:
- Proportionality - If an organisation has relationships or trading arrangements in overseas markets where bribery is known to exist, greater care should be taken by all those involved.
- Top level commitment - Directors and/ or senior staff within the organisation must take the lead and make it abundantly clear that they will not tolerate bribery in any form.
- Risk assessment - In relation to new business arrangements, a full assessment of the existence or potential for illegal practices should be undertaken.
- Due diligence - All organisations, commercial or otherwise, should carry out thorough checks on any new employees and new business associates.
- Communication - All policies on this issue should be given appropriate emphasis and be explained to all staff via training sessions, meetings and publications.
- Monitoring and review - Policies and operational procedures should be regularly evaluated to ensure that existing arrangements can adapt to any new considerations.
Therefore, in relation to all types of business gifts, any such gestures that relate to hospitality or promotional expenditure need to be proportionate and reasonable to the needs of the business in order to avoid any problems under the Act.
The Ministry of Justice is likely to produce its final guidance on the Bribery Act in January 2017, to supplement the wide range of advisory notes that have already been published. Any change in emphasis will therefore need to be implemented after the forthcoming Christmas period.
Current interpretation of what is and is not acceptable
One analogy that can best illustrate the current interpretation of what is and is not acceptable relates to a gift of complimentary tickets for an event. There is a distinction between a hosted corporate hospitality event where the company senior staff are present and the provision of tickets for a sporting or social event that can be used by the recipient without the sender being in attendance. The latter example will fall foul of the anti-bribery law in most circumstances. The former arrangement is more clearly explicable as a business function whilst the latter “gift” is more difficult to categorise in that way.
The current guidelines make it clear that condoning such a practice is potentially a criminal offence, and therefore liable to prosecution. The notes read as follows:
In cases where hospitality, promotional expenditure or facilitation payments do, on their face, trigger the provisions of the Act, prosecutors will consider very carefully what is in the public interest before deciding whether to prosecute. The operation of prosecutorial discretion provides a degree of flexibility which is helpful to ensure the just and fair operation of the Act.
QuestHR is always available to advise on any aspect of the subject of business gifts and the provisions of Bribery Act, particularly in relation to Anti Bribery policies and dealing fairly with employees who breach their provisions. So, if you are in any doubt whether or not a proposed gift to a business contact falls within the Bribery Act, we are here to help so please contact us.
