Advice from MIA Member, Blaser Mills on the 2010 Bribery Act
03 May 2019
A gift, or not a gift, that is the question
The Bribery Act 2010
"The sort of bribery we would be investigating would not be tickets to Wimbledon or bottles of champagne. We are not the 'serious champagne office'". David Green QC, former Director of the Serious Fraud Office.
The intention of the Act is to police disproportionate and unreasonable corporate gifts, which have the sole intention of instilling an unfair advantage over competition or inducing an improper decision on the part of the receiver.
Bribery is defined in the Act as:
"giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so. This could cover seeking to influence a decision-maker by giving some kind of extra benefit to that decision maker, rather than by what can legitimately be offered as part of a tender process."
For a summary of the law see Appendix 1.
Navigating the grey area between a bottle of bubbly and the extortionate gift is the challenge. The Ministry of Justice, in their Bribery Act 2010 Guidance gave 6 principles to follow:
1. Proportionate Procedures - the company's procedures and policies on bribery prevention should be directly proportionate to the risks it will face. Whilst a Cartier watch may be a mere corporate gift to the business elite, it raises more alarm bells when given in a different context.
2. Top-level Commitment - If the directors and management are committed to preventing bribery, then this ethos trickles down to all under their roof. Whilst those decision makers at the top are more likely to receive such bribes, if obvious to the rest of the company, may create a toxic environment where everyone is looking for a piece of the pie.
3. Risk Assessment - The company must assess the nature and extent of its exposure to potential risks. What positions will be most vulnerable? What are the specific areas of the business of contracts under greater risk? This should be a regular and documented exercise.
4. Due Diligence - The company should apply proportionate due diligence procedures in respect of the persons who perform or will perform services for or on behalf of the company, in order to mitigate identified bribery risks.
5. Communication & Training - This deters bribery by associated persons by enhancing awareness and understanding of the company's procedures and commitment to their proper application. Training provides the knowledge and skills needed to employ the company's procedures and deal with any bribery related problems or issues that may arise.
6. Monitoring & Review - The risks a company faces may change over time, as might the nature and scale of its activities, so the procedures required to mitigate those risks are also likely to require changing.
Taking a common sense approach may be your saving grace when it comes to receiving and giving gifts. What has been made clear is that companies may continue to provide and receive hospitality for sporting events that are reasonable and proportionate.
In conjunction with the Ministry of Justice's Guidance our suggestion is that you should additionally consider:
- Intention - The Act does not purport to prevent you 'getting to know your client' or 'building relationships' in the normal course of business. However, if your intention is to (or appears to) influence the receiver to perform their function improperly or influence decision making, then it is wise to reconsider.
- Timing - A lavish gift after a transaction has been completed is looked upon in a considerably more favourable light as opposed to during a tender process or before a decision is made.
- Transparency - Ensure there is a record of gifts received and sent in order that these may be declared by the employees and senior management. This does not need to extend to buying the odd round of drinks, lunch or dinner.
- Self-Awareness - Only make decisions you are comfortable for the industry to see.