Navigating the bribery risk this Christmas

Written by Jake Plenderleith on Thursday December 13, 2018

Navigating the bribery risk this Christmas

Christmas – the season of gifts and giving. Nobody needs reminding that we already hurtling our way full speed towards the Big Day, but for businesses it is the time of year when a useful reminder on the dangers of bribery is required.

How does one navigate bribery risk? The answer can be found in the criteria outlined by the UK government in its guidelines accompanying the Bribery Act 2010.

Six ‘principles’ are outlined in the guidance intended to help businesses and individuals show that they have the ‘adequate procedures’ in place to prevent bribery from occurring – something particularly helpful to return and consult at a busy time of year for gift giving.

Number one on its list is proportionality – in other words, the size of the risk you face, as well as the size of your business, should be considered before any action is taken.

The second is top level commitment: those at the summit of an organisation are responsible for establishing and maintaining an anti-bribery culture across the company. That the management level is understood to be hostile to bribery is a powerful message to broadcast to members of staff.

Risk assessment is third. An assessment of the kind of bribery risks that confront you will give you a sensible idea of how to mitigate that risk.

Fourth on the list of principles is due diligence – knowing who you are doing business with is perhaps the most politic measure you can take to reduce your bribery risk.

At five is communication. Talking with members of staff and spreading the anti-bribery message will help ensure that it is at the forefront of staff-member’s minds at a hectic time of year for gift giving.

Finally, monitoring and review. As your organisation changes and develops so must your bribery risk assessment. Looking at where you can tweak your risk assessment to ensure you are satisfied with it keeps the bribery risk as low as possible.

These criteria may not settle your nerves on the approach to the Christmas period, so simply remember that the government will consider:

• the level of hospitality offered
• the way in which it was provided, and
• the level of influence the person receiving it has on the business decision in question.

As ever, the three crucial points to remember for giving gifts are ‘intention’, ‘timing’ and ‘value’.

The intention is based upon your motivation for giving a gift.   

Timing looks at whether the gift is given, say, during a tender process. If so, then the timing is significant.

Finally, is the value of the gift proportionate? Are you giving somebody a bottle of wine from a supermarket, or one of the world’s rarest and most expensive bottles?

These may seem self-explanatory but the recent conclusion of the Serious Fraud Office’s first Deferred Prosecution Agreement (DPA) with Standard Bank at the end of last month demonstrates that anti-bribery is still a government priority even during the Brexit process.

In the UK, the Bribery Act specifies that bribery will have occurred if a gift is given with the intention of influencing behaviour, either by encouraging an individual to perform an activity or as a reward for having done so, or in the words of the Act, when the ‘financial or other advantage’ to the person is to:

(i) induce a person to perform improperly a relevant function or activity, or

(ii) to reward a person for the improper performance of a such a function or activity

1.2.b.i.ii.

It should always be borne in mind that gift giving itself is not prohibited, at this or any other time of year.

If you are still concerned, look at what the government states in its official guidance:

The Government does not intend that genuine hospitality or similar business expenditure that is reasonable and proportionate be caught by the Act

Distinguishing between genuine hospitality and gift giving and bribery will be decided by the government based on the outlines provided above.

To conclude and to keep things clear in your own mind, remember the following questions to ask yourself before giving or or receiving gifts and hospitality this Christmas.

• What is the timing around the giving or receiving of the gift? Do you reasonably think it could be seen to be being given to influence a timely decision?
• Consult the policy of your organisation or talk to the compliance department and see what the guidance is on giving and receiving gifts.
• Ask yourself whether the gift is really an appropriate one to give or receive, and how others might view it.

If all the risks are considered, and you follow the appropriate guidelines, then gift giving should leave you with just the one, common headache we all face at Christmas time: gifts for friends or family.  

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