Bribery Act compliance for UK company

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Gannons worked with a multinational software company concerned about the Bribery Act 2011 affecting their business. We advised them on ensuring that their practices at home and abroad were compatible with all local laws.

Our client was a software company which supported FTSE 100 public limited companies. The company was UK based but they also had a subsidiary in India which coded their software. The company knew of the Bribery Act 2011 and was concerned how the Act might affect its business.

Bribery Act

Under the Act, bribing, taking a bribe, and bribing a foreign official are criminal offences.

We explained to our client 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. For example, company suppliers subcontractors, employees, and subsidiaries.

Any 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

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. They were particularly concerned about the potential liability of its Indian operation. This was because of the widely publicised campaign against corruption in India.

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.

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.

Avoiding liability

We advised that our client could avoid liability in the following ways:

Institute a Bribery Act policy

This would require our client’s suppliers and contractors to comply with the Bribery Act. They needed to communicate the policy to those expected to abide by the Act. This would avoid breach of customer contracts and to limit liability under the Act itself.

Anti-bribery training

We advised our client to provide their staff with anti-bribery training. This was particularly relevant for companies, including our client’s overseas subsidiaries, operating in an environment in which there is a high risk of bribery.

Our client’s training programme addressed two specific issues: Corporate hospitality and facilitation payments.

Corporate Hospitality

We assured our client that reasonable hospitality to meet, network and improve relationships with customers is a normal part of business. The Bribery Act does not forbid this. No one would stop our client taking its customers to Wimbledon, the football or a Test Match.

Facilitation payments

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.

Hence, we instructed our client to take several steps to limit their liability under the Bribery Act when such facilitation payments are requested.

Limiting liability for ‘facilitation payments’

Firstly research relevant local laws so employees are able to question unfounded requests for money. Then explain that company policy prohibits such payments. If payment is unavoidable – particularly if there is risk to personal safety – then ensure that a record of the payment is made.

Result
As a result of our advice, our client has now updated its Bribery Act policies. This has protected its client relationships and minimised its liability under the Bribery Act, without disruption to its business.

  • Thanks to the clear and concise advice of Gannons, we are now confident in the continued legality of our business practices.