Firms are being warned they could risk unlimited fines or even jail if they don’t take action over the new Bribery Act, which comes into force today.
The Act makes it illegal to offer or receive bribes and to fail to prevent bribery. Individuals convicted under the Act can be jailed for up to 10 years and face unlimited fines.
The government claims it will underpin the UK's position as a global leader in the fight against business corruption. But business organisations have expressed fears that firms could fall foul of the legislation if corporate hospitality offered to clients and potential clients is deemed to be a bribe.
Debbie Taylor, Director of Target HR Consultancy, said the Act puts the responsibility onto directors to make sure bribery is not taking place in their company.
“Laws against bribery have been in force since the 1800s, but it is now a corporate offence, making company directors more responsible for the actions of their staff”, she said.
“Ignorance is no defence. A company can be found guilty of passing or receiving a bribe even if the directors were not directly involved or had no prior knowledge that the act was taking place.”
Debbie warns that the penalties for corporate bribery can be severe, so it is important for directors to take action.
“If found guilty, penalties start with an unlimited fine and companies can also be barred from bidding for public contracts and disqualified from other supplier lists,” she said. “On top of this, company directors can be individually prosecuted and jailed for up to ten years.
“With this in mind, businesses would be well advised to familiarise themselves with the new regulations and ensure they are compliant. This should involve a thorough risk assessment to establish appropriate anti-bribery policies, as well as ongoing implementation, training and monitoring.”
While business groups are understandably worried about the new Act, a business has a defence if it has adequate procedures in place to prevent bribery.
“Common sense rules what is a bribe and what isn’t,” she said. “As long as companies have the right safeguards and procedures in place and seek the advice of trained HR professionals, they should be fully compliant with the new Act, as well as reducing the potential for bribery within their organisation significantly.”
Matthew Starling, a regulatory solicitor at South West law firm Clarke Willmott, added it is vital that businesses are prepared for the new law.
“Many organisations are not aware that this Act covers corporate hospitality and assume it just concerns the more obvious forms of financial bribery,” he said.
“However that is not the case and from now on the responsibility will lie with the business to prove that it had adequate procedures in place to prevent any of its staff engaging in corporate hospitality that could be interpreted as a bribe.
“For example, taking a client to the rugby would still be fine but putting them up in the most expensive hotel in London for several nights might not look so good.”
