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The Bribery Act 2010, created four criminal offences:
A bribe is essentially defined in the Bribery Act as "a financial or other advantage" offered, promised, requested or given with the intention to induce a person to perform a relevant function or activity improperly, or to reward them for doing so.
A breach of the Bribery Act can lead to up to ten years' imprisonment for individuals. Commercial organisations can not only be fined an unlimited amount but could also be prevented from tendering for public contracts. Despite these severe consequences, recent research by Ernst and Young reveals that nearly half (48%) of British firms are failing to vet their suppliers for compliance with the Bribery Act, and that only 6% would re-tender if they discovered their suppliers were not compliant.
The Government has provided guidance on procedures that commercial organisations should put in place and in particular to help to prevent persons "associated" with them from bribing. The guidance sets out six principles which should be implemented to prove that you have in place "adequate procedures" to prevent those associated with the organisation from undertaking such conduct.
The issue of corporate hospitality and gifts is covered by the guidance. However, the Serious Fraud Office has also clarified that, the Bribery Act does not seek to prevent hospitality or promotional expenditure which is reasonable, proportionate and made in good faith if it is an established and important part of doing business.
Organisations should put in place anti-bribery policies as part of their employment handbooks and adhere to the Government's guidance to ensure that they have adequate procedures in place. If an organisation can prove that it has adequate procedures in place, then they can defend themselves against the offence of failing to prevent bribery under the Bribery Act.
Pam Loch, Managing Partner of niche employment law practice, Loch Associates Employment Lawyers and Managing Director of HR Advise Me Limited.
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