Aziz Rahman

Points of law

Aziz Rahman, of award-winning business crime solicitors Rahman Ravelli, examines how companies can make sure they never face a bribery prosecution.

After almost five years of investigations, Rolls-Royce has agreed to pay £671m to settle bribery allegations against it. It’s a huge price to pay and it could have been even bigger if the engineering giant had not entered into shrewd negotiations with the Serious Fraud Office (SFO).

Not many companies are as big or as high profile as Rolls-Royce. Yet everyone in business needs to be aware of the risk of bribery and the problems it can cause. Some readers may think that the saga of a huge corporate like Rolls-Royce has little bearing on their business. Yet a survey of accountants conducted by the Association of Chartered Certified Accountants (ACCA) a year or two ago may indicate otherwise.

That survey indicated that 48% of accountants thought SME's would face the risk of bribery and corruption in their business dealings. Only 27% believed SME’s were unlikely to encounter bribery. Almost half the accountants said there was insufficient guidance about bribery and corruption available for SME’s and only a quarter believed that SME’s understood the UK law regarding bribery. So what is the law on bribery? And how can we all stay on the right side of it?

Bribery Act

The UK legislation concerned with bribery is the Bribery Act; which came into effect in 2011. Under the Act, any company with a UK connection can be prosecuted for bribery that was carried out on its behalf in this country or anywhere else in the world by either a member of its staff or an intermediary, third party or trading partner acting on that company’s behalf.

This Act repeals all previous statutory and common law provisions regarding bribery. There are now the offences of committing bribery, being bribed, bribing foreign officials and the failure of a commercial organisation to prevent bribery being committed on its behalf.

Penalties for committing a crime under the Act are a maximum of 10 years' imprisonment for individuals involved and unlimited fines. There is also the possibility of property being confiscated under the Proceeds of Crime Act 2002 and disqualification as a director under the Company Directors Disqualification Act 1986.

The Act allows for the prosecution of an individual or company with links to the United Kingdom, regardless of where the crime occurred. It has been called the toughest anti-corruption legislation in the world.

There is little doubt that it places a large responsibility on businesses to make sure they prevent bribery being carried out in their name: whether they are a huge corporation operating internationally or a more modest company trading in the domestic market.

But there is plenty of scope for companies and individuals to both prevent bribery happening and defend themselves if they are accused of it.

 

Adequate Procedures

If a company is investigated under the Act, there is the defence of being able to show that it had "adequate procedures" in place to identify the risks of bribery and to prevent it happening. With some forethought, therefore, companies can help protect themselves against the risk of being involved in bribery.

In a nutshell, companies require detailed, on-going and continually monitored anti-bribery procedures. Devising and introducing such procedures may not seem a particularly sexy option for companies – many in business would argue that they already have enough demands placed on them. But such procedures will help companies prevent bribery being carried out in their name – ensuring they are not prosecuted for something that could have been prevented, identified or eradicated.

Expert legal advice is always available to help companies put anti-bribery procedures in place. But companies can take the lead themselves.

 

Measures

There is no precise legal definition of what adequate procedures means in terms of the Bribery Act.

But it is fair to say that doing the following would convince any investigating authority that you had done all you could to prevent bribery:

* Carrying out due diligence on companies that you are trading with or are likely to trade with. This also applies to individuals you may be thinking of employing or using in some sort of third party or agency capacity.

Is there anything in their history that indicates any previous involvement in bribery? How familiar are they with the Bribery Act? And can they produce any evidence that they have taken steps to reduce the potential for bribery in their working practices?

* Making sure at least one senior figure in the company is familiar with the Bribery Act. This may involve someone having to undergo some training but it will mean that any warning signs of bribery are more likely to be picked up early and acted upon. In that way, the risk of a prosecution can be greatly reduced.

* Carrying out an internal investigation.  If a company wants to make sure bribery is not being carried out in its name, conducting a thorough examination of all aspects of its work will help identify the potential for bribery; making it easier to prevent. It may even uncover bribery, giving the company a chance to put right the wrongs.

There is little doubt that bribery in business is high on the authorities’ agenda. But by putting it on their own agenda, those in business can take steps to prevent it causing them any legal problems.

Aziz Rahman is founder of Rahman Ravelli; a top-ranked business crime law firm in national and international legal guides.

For more information visit: http://www.rahmanravelli.co.uk