Bribery: What is it and what's the penalty?

Yuan notes

Companies based in the UK are forbidden to pay bribes to gain business anywhere in the world - even in areas where these types of deal "sweeteners" are commonplace. It is a criminal offence and a corporate one if a company is found to have failed to prevent bribery. In 2011, the UK government brought in a new bribery act, saying it wanted to take a leading role in the global fight against bribery.

How do you define a bribe?

The Ministry of Justice has a cut-out-and-keep guide to the Bribery Act. "Very generally, [bribery] is defined as giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so." In prosaic terms, this forbids a cash payment to someone in customs to smooth a cargo's way through.

What about corporate "treats"?

The guide says that taking clients out - for example, to a big Rugby game at Twickenham - "better to present products and services, or establish cordial relations", is fine. It's an established way of doing business. But it also says "hospitality and promotional or other similar business expenditure can be employed as bribes".

Aren't bribes normal in some countries?

Yes. But if you are a UK company, you will still be in trouble if you go along with this.

What are the penalties?

For people, up to 10 years in prison and an unlimited fine. Companies can also face unlimited fines.

Any defences against bribery charges?

Organisations are not liable as long as they tried their best to prevent bribery. Chiefly, this would mean it had strong systems in place discouraging bad behaviour. These could include providing anti-bribery training to staff, carrying out risk assessments for certain markets, or checking the people's backgrounds.

Any other grey areas?

The use of contractors and subcontractors is one. The MoJ's guidance says you only have to perform due diligence on those who actually supply goods or services to you. Another point for debate is the question of liability between a parent company and a subsidiary - if a bribe has been paid by a subsidiary, and the benefit is solely to that subsidiary, then the parent company is not liable. You could, of course, argue that a parent profits when a subsidiary gains.

How does the UK compare with other countries over tackling bribery?

In covering bribery between businesses, the UK's legislation goes further than the Foreign Corrupt Practice Act in the US, which makes it illegal for companies to give foreign officials improper payments.

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