Ten tips to avoid breaking anti-bribery laws

This week, the brokerage firm Besso Limited was fined a not insubstantial £315,000 by the Financial Conduct Authority (FCA).

So why was the fine imposed? Whatever did they get wrong?

Well, according to the FCA:

Besso failed to take reasonable care to establish and maintain effective systems and controls for countering the risks of bribery and corruption associated with making payments to parties who entered into commission sharing agreements with Besso or assisted Besso in winning and retaining business.

In particular, although Besso had introduced written bribery and corruption policies and procedures in November 2009, the FCA considered that they were:

not adequate in their content or implementation.

This case is a wake-up call to businesses who think that they can put compliance with the Bribery Act 2010 onto the back burner. The Act is something that should concern all UK businesses—and indeed any non-UK businesses which have business interests in the UK.

Whilst the FCA only regulates certain businesses in the UK, such as financial services firms, it is clear that the Serious Fraud Office (which prosecutes bribery and corruption offences) is champing at the bit to get its teeth into a few juicy prosecutions.

So here's 10 tips to remind your business how to deal with bribery and corruption matters and to ensure compliance with the 2010 Act:

  1. Code of ethics: Do you have a clear and forthright code of ethics which explicitly refers to a zero tolerance of bribery and corruption? If so, well done! Bear in mind, however, that this should always have board level approval and be a tad more comprehensive than, say, Google's admirable, but somewhat terse, motto of 'do no evil'. The slightly longer 'please do no evil' or more specific 'don't bribe' won't cut it either.
  2. Proper policies and procedures: Is the code of ethics supported by comprehensive policies and procedures? Discussion of bribery and corruption should be on the board agenda each month—not at the top of the agenda necessarily, but definitely before 'biscuits to be provided at all meetings'. The Board member with responsibility for the anti-bribery measures will also typically need specialist training on all relevant legislation and compliance procedures (eg something more than a few targeted Google searches). Remember that the policies relevant to anti bribery compliance may also include those relating to intermediaries and other third parties; gifts and hospitality; political and charitable donations; and whistleblowing.
  3. Employment contracts: Are your policies accessible and enforceable through each employment contract? Needless to say that all policies and procedures should be clear, accessible and enforceable. They should also take into account the roles of the whole workforce from board level downwards and be incorporated as a term of each employment contract. Appropriate sanctions should be published and adhered to when there has been a failure to comply with procedures. In other words, sanctions should be something more substantial than a literal, or even metaphorical, slap on the wrist—the former probably amounts to assault; the latter probably amounts to, well, nothing. Sanctions should actually mean something in the context of bribery and corruption.
  4. Register of gifts and hospitality: Do you have a central register of gifts and hospitality that are made and received? Is it a term of each employment contract that this central register is used? Many businesses make life easier for their staff by providing for an intranet-based electronic register.
  5. Political and charitable donations: Do you donate to the Church of the Militant Elvis Party (CMEP)? Or perhaps to Adam Lyal's Witchery Tour Party (don't ask)? To be honest, perhaps you shouldn't. But don't let us dictate what you can and can't do. That said, political and charitable donations should require board approval before they are made. The board may not agree, for example, with CMEP's admirable (but possibly ineffective) policy of heading to Antarctica to shout 'stop melting' at icebergs. That said, if, despite all reservations, the board still decides to go ahead with a donation, ensure that it is recorded on the central register in the same way as gifts or hospitality.
  6. Training: Is training provided at every level? Any training must be tailored to the particular business and include realistic examples so that employees know how to go about making the right decision and where to go for help and advice. Examples, examples, examples! (To paraphrase Tony Blair.)
  7. Due diligence: Have you carried out due diligence on all third parties and intermediaries acting on your behalf? Where, for example, information is provided as a contractual term in a due diligence questionnaire, is there a proper system of assessment and review of the information provided?
  8. Whistleblowing: is there a clear mechanism for reporting concerns in line with existing whistleblowing protection? Discussing concerns in an open-plan office is definitely ‘out’ this season whereas setting up a confidential reporting system is ‘in’.
  9. Monitoring and review: Have you implemented a system of monitoring and review which reports directly to the senior officer with responsibility for bribery prevention? Licking your finger and holding it in the air for a few minutes ‘to see which way the bribery wind is blowing’ will probably not suffice.
  10. Change: What systems do you have in place to deal with changes in bribery and corruption legislation? Consider checking the Ministry of Justice (MoJ) and Serious Fraud Office website regularly. The MoJ site, in particular, has some useful material on bribery generally and what the government’s approach to combatting it is.

So that’s that. Ten tips already.

So over to you: do you have any thoughts? Have you implemented an anti-bribery policy? If so, what challenges did you encounter? Let us know!

Area of Interest