Our client was a UK based software company, supporting FTSE 100 plc’s, with an Indian subsidiary for software coding. The company knew of the Bribery Act 2011, and was concerned how the Act might effect its business.
Our client’s concerns
Our client’s principal concern was the impact of the Bribery Act on its commercial relationships. These relationships included existing and prospective clients. In particular, the potential liability of its Indian operation, where there was a widely publicised campaign against endemic corruption.
The company had already received letters from existing clients setting out their Bribery Act policies. These letters also stated it was now a condition of their contract that our client complied with the Bribery Act. In addition, new clients included similar provisions in tender and contract documentation.
Bribing, taking a bribe, and bribing a foreign official are criminal offences under the Bribery Act.
We explained that is also an offence to fail to prevent these offences. This includes offences under the Bribery Act by associated persons, even if they located overseas, e.g.
A company that fails to comply can be prosecuted and subject to an unlimited fine. Directors whose companies are complicit in bribery face 10 years imprisonment.
Bribery Act compliance policy
A company can avoid liability for an employee’s or other associated person’s breach of the Bribery Act if they have taken sufficient and proportionate steps to prevent it.
Hence we advised our client to follow their customer’s lead.
Firstly, our client should
Institute a Bribery Act policy;
Require suppliers and contractors to comply with the Bribery Act.
Communicate the policy to those expected to abide by the Bribery Act.
This would avoid breach of customer contracts and to limit liability under the Bribery Act itself.
Secondly, staff should receive anti-bribery training, particularly where a company including its overseas subsidiaries operates in an environment where there is a real risk of bribery.
Our client’s training programme addressed two particular issues: Corporate hospitality and facilitation payments.
We assured our client that reasonable hospitality to meet, network and improve relationships with customers is a normal part of business. This is not prohibited by the Bribery Act. No one would stop our client taking its customers to Wimbledon, the football or a Test Match.
Our client’s Indian operation wanted to know how to deal with facilitation payments that might be requested by officials to “grease” the wheels in respect of everyday bureaucratic matters.
This is a thornier issue. In some jurisdictions making such payments to obtain normal services from officials is not illegal. However, under the UK Bribery act it illegal, and there is a clear risk of prosecution.
As we instructed our client, key elements in limiting liability under the Bribery Act when facilitation payments are requested are to:
Research relevant local laws so employees are in a position to question unfounded requests for money;
Explain that payments are prohibited by company policy, when money is requested;
Record the payment made, if payment is unavoidable, particularly if there is risk to personal safety.
Our client has now protected it’s client relationships and minimised it’s liability under the Bribery Act, without disruption to its business.