Bribery bill warning for businesses | 22 October 09

NEW laws covering bribery offences could unwittingly catch out businesses, a leading law firm has warned.

Experts at Ward Hadaway say that the Bribery Bill currently going through Parliament may lead to more companies being prosecuted for activities previously considered lawful.

Businesses which export a lot of their goods and services could be particularly vulnerable to prosecution.

And the firm, which has offices in Newcastle and Leeds, says that all companies should review their systems to ensure they don’t fall foul of the new legislation.

Andrew Swan, solicitor in Ward Hadaway’s licensing and regulatory team, said: “The Bribery Bill is intended to modernise and simplify the existing law on bribery and make it easier for prosecutions to be brought for bribery-related offences.

“This should not pose any real problems for businesses – after all, no-one wants to lose out on a contract to a competitor who has bribed their way to the deal.

“However, the Bill as it stands proposes a new corporate bribery offence covering occasions where a business fails to prevent those working on its behalf from committing bribery.

“The company itself can be prosecuted, as well as individuals within the business such as senior directors who are held responsible for preventing bribery, and the penalties include the prospect of unlimited fines.”

The proposed new law will mean that even if a company was not aware of an employee offering bribes, it can still be prosecuted.

Andrew Swan explained: “A company has to demonstrate that it has adequate systems and safeguards in place to prevent bribery taking place.

“It also needs to show that all employees are aware of these policies and anyone who is going out to try and win contracts for the company is fully aware of what they can and can’t do.”

The Bribery Bill also features a proposed new international commercial bribery offence, covering activities carried out abroad by British companies.

This means that, while certain activities connected with doing business may be perfectly legal in some countries, British companies who do so leave themselves open to prosecution.

Andrew Swan said: “This has the potential to be a real grey area, particularly for companies which do a lot of their business abroad.

“Something which may be an accepted part of business practice in some countries could be construed as a bribe under this legislation.

“The definition of a bribe here is providing a financial or other advantage to a person with the intention of inducing them to behave ‘improperly’.

“This leaves it very open to interpretation. A whole range of things could conceivably come under this heading - even things such as providing hospitality - so companies need to be extremely careful in the way they do business in other territories.”

While the Bill is yet to become law, the likelihood is that it will be passed since it has all-party support and the UK has come under pressure from the Organisation for Economic Co-operation and Development (OECD) to tighten up its anti-bribery legislation.

Companies are therefore being advised to look at tightening existing policies or introducing new systems to ensure they stay the right side of the law.

Andrew Swan said: “Whilst bribery does thankfully appear to be a fairly rare occurrence in business in the UK, there is no doubt that legislation to crack down on it is on its way.

“Larger companies which do a lot of work abroad may already have policies in place to combat bribery and corruption. Those who do not should think very carefully about introducing new policies.

“While this may appear to introduce an additional burden on businesses, the repercussions of breaching both existing and proposed anti-corruption laws are extremely serious.”

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