Aziz Rahman, of award-winning solicitors Rahman Ravelli, explains why corruption scandals around the world can provide lessons for everyone in business.
There are some who will say that politics and business don’t mix. And there has been plenty of evidence recently to back this theory.
In South Korea, a former president has just been jailed for 24 years for bribery – and another ex-president has been arrested over similar allegations. Some of Greece’s most senior politicians are under investigation over allegations they accepted bribes from pharmaceutical giant, Novartis. Meanwhile, many Brazilian politicians have been implicated in the huge and long-running corruption at its state-owned oil company, Petrobras.
Plenty of proof, you might argue, for keeping business and politics apart. Yet it is not that simple. All the aforementioned corruption scandals allegedly involved politicians doing wrong. But let’s not forget that if there was illegal activity, it was done with the help of those in business. After all, someone had to pay the bribes at the centre of the scandals.
These events, therefore, can be taken as a warning to everyone in business about the need to prevent bribery being carried out in your company’s name.
Many reading this may be surprised that corruption in South Korea, Greece and Brazil was ever investigated. But it was, which gives in indication of how seriously authorities everywhere take bribery – and why those in business must take the same approach.
In the UK, we have the Bribery Act: arguably the most far-reaching bribery legislation in the world. It covers all companies based in, or with a close connection to, the UK. Companies can be prosecuted under the Act, in the UK, for bribery that was carried out on their behalf anywhere in the world by their staff, intermediaries, third parties or trading partners. Penalties of up to ten years in jail and unlimited fines can be imposed.
Hoping to avoid prosecution under the Act without taking proper steps to comply with it does not make sense and seems, at best, highly risky. A well thought-out compliance programme, however, will greatly reduce the chances of bribery being committed by people with a connection to that company.
Compliance has to be seen as a priority. It helps prevent – or at least recognise – wrongdoing. Each and every company needs to carry out a comprehensive compliance “health check’’ on itself to identify how crime could be committed within it – and devise measures to prevent such an outcome. If a company is unsure how to do this, it needs to take legal advice on what to do. Quickly.
Such an exercise takes time and will cost money, if outside expertise is brought in. But it will certainly take less time than ten years in prison and cost less than a massive fine; either of which are possible under the Bribery Act. And it is worth noting that the authorities are likely to take a less harsh approach if a company that finds itself involved in bribery can show it had proper measures in place to try and reduce the chances of it happening.
In the UK and the rest of Europe, political figures (such as those embroiled in the scandals we mentioned) are now subject to greater financial scrutiny, thanks to a series of regulations introduced to tackle money laundering and other financial crime. If such people cannot give a satisfactory explanation for how they obtained the wealth to buy, for example, an expensive house in London, the UK authorities can now seek to seize the assets under an unexplained wealth order.
Such measures are a sign that the authorities are always looking to implement new ways of detecting and punishing financial crime. You do not have to be a former ruler of a country or a major national figure to fall foul of such a robust approach from the authorities.
Simply being involved in business without taking the right steps to ensure you are legally compliant is enough to bring trouble to your workplace. Regardless of how recognisable or important you may or may not be.
Aziz Rahman is founder of Rahman Ravelli; a top-ranked business crime law firm in national and international legal guides.
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