ANTI-BRIBERY

PRINCIPLES FOR
NOT-FOR-PROFIT
ORGANISATIONS
GOOD PRACTCE GUDANCE ON ANT-BRBERY
PROGRAMMES FOR EDUCATONAL, VOLUNTARY,
CHARTABLE, ARTS & HERTAGE AND OTHER
NOT-FOR-PROFT ORGANSATONS
Supported by:

Transparency InternationaI (T) is the world's leading non-
governmental anti-corruption organisation. With more than
100 chapters worldwide, T has extensive global expertise and
understanding of corruption.
Transparency InternationaI UK (T-UK) is the UK chapter of T.
We raise awareness about corruption; advocate legal and regulatory
reform at national and international levels; design practical tools for
institutions, individuals and companies wishing to combat corruption;
and act as a leading centre of anti-corruption expertise in the UK.
AcknowIedgements
We are grateful to the following for supporting this project throughout as members of the expert Advisory Committee:
John Drysdale (Chair), Robert Cumming, Geoffrey Eales, Mark Lomas, Marcus McCaffrey, Gary Miller, Toby Wilkinson.
We would also like to record our thanks to the individuals and organisations that have helped us in developing the
publication, including Vincenzo Raimo, the British Council, the Charity Commission and NCVO.
This publication has been kindly supported by:
Baker Tilly, a provider of accounting and business services to the not-for-proft sector www.bakertilly.co.uk; and
Mishcon de Reya, a law frm with offces in London and New York, offering a wide range of legal services for charities and
not-for-proft organisations, businesses and individuals www.mishcon.com


Lead author: Peter Wilkinson
Editor: Robert Barrington
PubIisher: Transparency nternational UK
PubIished: January 2014
ISBN 978-0-9573410-4-3


2013 Transparency nternational UK. All rights reserved. Reproduction in whole or in parts is permitted providing that full
credit is given to Transparency nternational UK and provided that any such reproduction, whether in whole or in parts, is not
sold or incorporated in works that are sold. Written permission must be sought from Transparency nternational UK if any
such reproduction adapts or modifes the original content.
DiscIaimer
Every effort has been made to verify the accuracy of the information contained in this report. All information was believed
to be correct as of October 2013. Nevertheless, Transparency nternational UK cannot accept responsibility for the
consequences of its use for other purposes or in other contexts. Policy recommendations and best practice guidance refect
Transparency nternational UK's opinion. They should not be taken to represent the views of those quoted or interviewed or
of members of the editorial committee of Transparency nternational UK's partners in the project. Transparency nternational
UK assumes no liability to any third party for the information contained herein, its interpretation or for any reliance of any
third party. The document should not be construed as a recommendation, endorsement, opinion or approval of any kind.
This Guidance has been produced for information only and should not be relied on for legal purposes. Legal advice should
always be sought before taking action based on the information provided.
1
FOREWORD 3

1. SUMMARY 4
1.1 Purpose of this guidance 4
1.2 The changing environment for NFPs and bribery 4
1.3 What is bribery? 4
1.4 Why pay attention to countering bribery? 5
1.5 Organising an anti-bribery programme 6
2. PUTTING IN PLACE AN ANTI-BRIBERY PROGRAMME 7
2.1 Top-level commitment 7
2.2 Risk assessment 8
2.3 Effective anti-bribery policies and procedures 13
2.4 Due diligence and procedures for third parties 19
2.5 Communication and training 24
2.6 Monitoring and evaluation 26

3. MANAGING AND REPORTING AN INCIDENT 27
APPENDIX 1: CHECKLIST 28
APPENDIX 2: QUICK-START GUIDE 32
APPENDIX 3: RESOURCES 35
CONTENTS
2
The following principles are derived from the Ministry of Justice Guidance to the Bribery Act 2010, the Anti-
Bribery Principles and Guidance for NGOs, and the Business Principles for Countering Bribery.
1
They are a
recommended starting point for any Not-for-Proft organisation putting in place an anti-bribery programme.
1. The Not-for-Prot organisation commits to a poIicy of zero-toIerance of bribery in any form,
recognising that bribery is contrary to fundamentaI vaIues of integrity, transparency and
accountabiIity.
2. The Not-for-Prot organisation impIements an anti-bribery programme comprising:
2.1 Top-IeveI commitment
The Board of Trustees or equivalent governance body commits to and oversees the zero
tolerance policy and anti-bribery programme, demonstrating visible and active commitment to the
implementation of the programme.
2.2 Risk assessment
The organisation undertakes a regular bribery risk assessment that underpins its anti-bribery
programme.
2.3 Effective anti-bribery poIicies and procedures
The organisation designs and implements anti-bribery policies and procedures that are effective and
proportionate to the organisation's risks, circumstances and culture.
2.4 Due-diIigence and procedures for third parties
The organisation carries out reasonable and proportionate due diligence on potential associates
before entering into contracts with them and puts in place procedures for managing the associated
risks on an on-going basis.
2.5 Communication and training
The organisation builds awareness and understanding of its anti-bribery programme among its Board,
employees, volunteers and relevant stakeholders through communication and appropriate training. t
reports publicly on its anti-bribery measures.
2.6 Monitoring & evaIuation
The organisation monitors the implementation and effectiveness of its anti-bribery programme. The
results of monitoring are reviewed regularly by the Board and guide improvements to the programme
as necessary.
NOT-FOR-PROFT ANT-BRBERY
PRNCPLES
2
1. Ministry of Justice Guidance to the UK Bribery Act 2010 (hereafter the MoJ Guidance) https://www.gov.uk/
government/publications/bribery-act-2010-guidance
Anti-Bribery Principles and Guidance for NGOs, Bond, 2011 (hereafter the Bond Principles);
Business Principles for Countering Bribery, Transparency nternational, http://www.transparency.org/whatwedo/tools/
business_principles_for_countering_bribery (hereafter the Business Principles for Countering Bribery)
3
FOREWORD
The Charity Commission welcomes this new guidance aimed at helping educational, arts and heritage
organisations and other not-for-profts prevent and tackle bribery. We have been pleased to support its
development and hope it will complement existing joint guidance by Transparency nternational, Bond,
and Mango as well as the Commission's own compliance toolkit, Protecting Charities from Harm.
All charities must be vigilant to emerging risks to good governance and probity. Bribery can happen in
stable environments, including the UK.
There is, sadly, some evidence that charities do not take the risks seriously enough. Of the 120 charities
recently surveyed, only 1% said they think bribery might have a signifcant impact on their organisation.
As the case studies in this guidance highlight, bribery can happen in all types of charities and its
consequences are very serious. Charities that experience problems with bribery can face criminal fnes,
imprisonment of individuals, regulatory action by the Charity Commission and perhaps most important,
serious damage to their reputation and the trust of donors, supporters, and benefciaries. All charities
should demonstrate a zero-tolerance approach to bribery, and put in place appropriate anti-bribery
measures.
therefore urge trustees to refect on how well their charities are protected against the risks of association
with bribery and corrupt practices and to use this guidance in putting strong controls in place.

Sam Younger
Chief Executive
Charity Commission
4
1.1 PURPOSE OF THIS GUIDANCE
The aim of this Guidance is to provide practical advice for Not-for-Proft organisations (NFPs) of all sizes
in the educational, voluntary, charitable, arts and heritage sectors, and other not-for-proft organisations on
how to implement a good practice anti-bribery programme.
There are growing risks from bribery for many NFPs as their circumstances change, including expanding
into new activities and countries. There can be severe consequences from a bribery incident, including
legal sanctions for NFPs and their offcers, as well as reputational and organisational damage. NFPs
exposed to risks from bribery need to ensure they have in place a good practice anti-bribery programme.
There are varying degrees of bribery risk for NFPs, and some will have little risk. This document offers a 'Quick-
Start' Guidance in Annex for those with little risk, and substantial advice for those with higher risk. Section 2
is deliberately detailed. Many NFPs will not need to follow all the procedures or guidance; but it is designed
to provide a comprehensive selection of subjects for those who do need to explore the subject in depth.
1.2 THE CHANGING ENVIRONMENT FOR NFPS AND BRIBERY
A recent survey of 120 charities found that 91% were aware of the Bribery Act but worryingly, only 1% of
the charities thought the Bribery Act would have a signifcant effect on their organisation.
2

NFPs might feel that they do not face a high risk of bribery. This should not be assumed. Many NFPs are
substantial organisations and operating in complex areas: for example, universities, schools and museums
are building large facilities; charities can employ many thousands globally. NFPs may operate in countries
with high levels of corruption, be involved with complex projects and be relying on the integrity of others
such as agents and joint venture partners. Even smaller NFPs may fnd that they are operating in parts of
the world where bribery is a regular occurrence.
Corrupt offcials do not restrict their demands for bribes to businesses. They may solicit or demand bribes
in all types of activity, from bids for major contracts to release of goods from customs or entry of an
employee at an airport.
1.3 WHAT IS BRIBERY?
n order to begin thinking about implementing effective anti-bribery measures, it is helpful to understand
what bribery means. A simple working defnition is:
"The offering, promising, giving, accepting or soliciting of an advantage as an inducement to do something
which is illegal or a breach of trust.
3

The Bribery Act also notes that the purpose of the bribe is to 'induce a person to perform improperly a relevant
function or activity' or to 'reward a person for the improper performance of such a function or activity.'
4

1. SUMMARY
SIGNPOST
Size of NFP is not a guide to the need to design an anti-bribery programme. nstead, consider the
potential risks and their impact. The programme should refect both the commitment of the NFP to
integrity and signifcant risks identifed from risk assessment.
2. Managing charities Risks and opportunities: a leadership survey, Baker Tilly, Winter 2011/2012
3. Business Principles for Countering Bribery
4. 2010 Bribery Act Section 1.2
There are
growing risks
from bribery
for many
NFPs as their
circumstances
change,
including
expanding into
new activities
and countries
5
Bribes can be given or received, promised or expected. They can take many forms and be of any size,
including both payments and in-kind benefts. Bribes that are given are known as 'active bribery' and bribes
received are known as 'passive bribery'. A bribe can be given before or after the breach of trust takes place
- such as a kickback following the award of a contract.
1.4 WHY PAY ATTENTION TO COUNTERING BRIBERY?
The results of a bribery incident can be severe, legally, reputationally and organisationally. n legal terms,
there are strict anti-bribery laws and related legislation such as anti-terrorism and anti-money laundering
laws which can lead to fnes and imprisonment for individuals and fnes for organisations.
5
These laws
apply in most countries to charities and NFPs, not just to purely commercial organisations. For example,
the UK Bribery Act applies to employees of UK charities, and in most cases to the charity and its board.
6

Regulators may also act on incidents of bribery. f a charity is involved in bribery, the Charity Commission
would consider whether this would be mismanagement and/or misconduct, depending on how the trustees
managed the incident.
7

Reputational damage can be a major penalty and this particularly applies to NFPs, which are expected
to live by their values. An incident of bribery can lead to loss of confdence and backing of employees,
students, supporters, donors, users and clients. t should be remembered that even though there may
be no foundation to an allegation of bribery, a public perception of bribery having taken place can be
as damaging to reputation as an actual occurrence. For this reason, a clear public policy for integrity,
including zero tolerance of bribery, provides reputational protection in the event of an incident.
A bribery scandal can also lead to organisational disruption with diversion of management time, loss of key
individuals, and impact on the supply chain. f the NFP's operations have been reliant to any degree on
ExampIes of bribery
The following are some simple examples of bribery:
A charity's joint venture partner is managing the construction of a major overseas facility and
accepts bribes from contractors
A potential supplier offers money to a charity's buyer to win a contract
Job applicants bribe a charity's local recruitment offcer to win employment in an overseas
community development project
A bribe is paid to an offcial to gain a planning license for a distribution depot for relief supplies
A charity's operations in a country depend on imports of critical supplies and small bribes are
being paid to customs offcials to release the supplies
A promised 'kickback' is paid after the award of a contract by a museum
An overseas heritage site bribes an offcial from its Culture Ministry to secure permission to
loan artefacts to an exhibition organised by a UK gallery in the UK
A heritage organisation's employee visits an archaeological site in an emerging country and a
small bribe (a 'facilitation payment') is demanded at the airport by the immigration offcer
An overseas recruitment agent for a school takes bribes from the families of potential students
An employee of a university-owned enterprise is bribed to provide information on intellectual
property
Parents offer to make a substantial gift to a school with the proviso that their child is
guaranteed admission
An offcial at an overseas education ministry is given disproportionately lavish hospitality and
travel expenses for a visit to the UK during negotiations by a UK university, related to setting
up a campus in the offcial's country
5. http://www.charitycommission.gov.uk/detailed-guidance/protecting-your-charity/protecting-charities-from-harm-
compliance-toolkit/chapter-1-charities-and-terrorism/chapter-1-module-4-counter-terrorism-legislation-an-overview/
6. http://www.charitycommission.gov.uk/detailed-guidance/protecting-your-charity/protecting-charities-from-harm-
compliance-toolkit/chapter-3-fraud-and-fnancial-crime/chapter-3-fraud-and-fnancial-crime/#m
7. http://www.charitycommission.gov.uk/detailed-guidance/protecting-your-charity/protecting-charities-from-harm-
compliance-toolkit/chapter-5-protecting-charities-from-abuse-for-extremist-purposes-and-managing-the-risks-at-
events-and-in-activities/chapter-5-summary/
6
bribery, such as payments made by project partners to local offcials, then the project model may be untenable.
The NFP needs to know that its activities are run with integrity and not reliant on bribes to smooth the way.
t is also important to remember that bribery does real damage, which is why anti-bribery laws exist. Each
time an organisation pays a bribe it is contributing to perpetuating a system of corruption that damages
society. The effects of bribery show in many ways, including undermining the rule of law, corroding political
and human rights, distorting markets, stealing from relief and aid resources and environmental and
infrastructural damage.
Finally, any organisation must consider how an incident of bribery is incompatible with their purpose and
responsibility to society. NFPs, whether universities, voluntary organisations, arts and heritage or other
charitable bodies, have in common that their missions and activities are rooted in high-level values and
making a positive contribution to society.
Some potentiaI impacts of bribery on an NFP
Reputational damage
- Loss of reputation and damage to the 'brand' and potential subsequent reduction
in grant and donation revenue.
- Alienation of supporters and employees
Legal and regulatory sanctions
- Fines and prison for offcers, employees, associates
- Civil lawsuits
- Sanctions by regulatory bodies such as the Charity Commission
- Debarment from government funding and contracts
Operational
- Cost of professional fees
- Diversion of board and management time
- Loss of donors, sponsors, clients, students, associates, contracts or ventures
- Organisational activity distorted by bribery
- Damage to the supply chain
- Dysfunctional or unsustainable activities and projects
- Termination of projects before completion
- Demotivation of staff and employees
1.5 ORGANISING AN ANTI-BRIBERY PROGRAMME
A systematic approach is needed to counter bribery. n this Guidance, the system is called the anti-bribery
programme. All NFPs, whatever their size or risks from bribery, should conform to the two Principles set
out at the front of this Guidance:
To commit to a policy of zero tolerance of bribery
To implement an anti-bribery programme

The anti-bribery programme is the entirety of an NFP's efforts to counter bribery starting with the
commitment to a policy of zero tolerance of bribery. The detail and content of the programme should be
designed proportionately to the NFP's risk approach and assessed risks.
There is a general global acceptance on what constitutes good organisational anti-bribery practice. The
underlying system for organisational anti-bribery practice is the same for all forms of organisation, whether
companies, public sector bodies or NFPs. The following Section outlines the stages for implementing a
programme. t is based on the six principles used in the UK Ministry of Justice's own guidance.
SIGNPOST - The Quick-Start Approach
f you are a lower risk NFP, you may want to implement a less sophisticated anti-bribery programme
than a higher-risk NFP. A Quick-start Guidance is provided in Annex to help you to assess whether
your NFP is lower-risk and if so, need only implement a simplifed programme. However, a good
assessment of your bribery risks is fundamental to this process. Don't forget that many NFPs do not
understand or easily overlook their bribery risks.
It is important
to remember
that bribery
does real
damage,
which is why
anti-bribery
laws exist.
Each time an
organis-ation
pays a bribe it
is contributing
to perpetuating
a system of
corruption
that damages
society
7
2.1 TOP-LEVEL COMMITMENT
PrincipIe: The Board of Trustees or equivalent governance body commits to and oversees the zero
tolerance policy and anti-bribery programme, demonstrating visible and active commitment to the
implementation of the programme.
8


The frst task of an NFP, when starting out on the road to designing an anti-bribery programme is for the
Board of Trustees or equivalent body (termed 'the Board' in this Guidance) to commit to the principles
of a policy of zero toleration of bribery and the creation of an anti-bribery programme. The Board's
commitment should also extend to establishing a culture of integrity for the NFP within which the anti-
bribery programme will be implemented.
The policy should state that it extends to all the activities of the NFP, including Board members,
employees and volunteers, and also associates acting on behalf of the NFP such as agents and project
partners. The policy should be made public. The policy could be incorporated into existing organisational
values, statements or procedures.
The Board and management should aim to create a culture in the NFP which comprises the following:
ntegrity and zero-tolerance of bribery are fundamental and non-negotiable
Employees, Board members, volunteers and associates know what is expected of them
Anti-bribery policies and procedures are taken seriously
Employees, volunteers and associates are given the information, skills and resources they need to
comply with the policy of zero tolerance of bribery
t is made clear that the NFP is prepared to forego projects and contracts rather than pay bribes and
will support employees in this
Sanctions are implemented for breaching the anti-bribery policies, consistently, fairly and openly

The Board's own commitment will be shown in ways such as public statements and internal and external
presentations. The Board must also oversee the anti-bribery programme including receiving reports,
challenging and questioning management on the design and implementation of the programme and
requiring that the anti-bribery programme is kept up-to-date to meet changes in the NFP or external
environment.
2. PUTTNG N PLACE AN
ANT-BRBERY PROGRAMME
SIGNPOST
The Board or equivalent body should formally agree a policy of zero-tolerance of bribery and to
implementing an anti-bribery programme which will be proportionate in scope and depth to the
assessed level of risk.
8. MoJ Guidance, Principle 2, Top Level Commitment: "The top-level management of a commercial organisation (be
it a board of directors, the owners or any other equivalent body or person) are committed to preventing bribery by
persons associated with it. They foster a culture within the organisation in which bribery is never acceptable.
8
The Board should consider how the current organisational culture supports implementing the anti-bribery
programme. The Board might consider questions such as:
s there a clear ethical value statement in the organisation for example in its founding documents or
mission statement?
What could be the signifcant bribery risks for the organisation?
Have there been any incidents or concerns in the organisation, associates or peer organisations?
s the current culture of the NFP compatible with the anti-bribery commitment?
What expertise lies in the organisation related to countering bribery?
What knowledge and expertise exists in the Board related to countering bribery?
What capacity does the NFP have to allocate resources and time for the anti-bribery commitment?
Do functions such as legal, Human Resources, fnance and audit have the resources and expertise to
support the implementation of the anti-bribery programme?
2.2 RISK ASSESSMENT
PrincipIe: The organisation undertakes a regular bribery risk assessment that underpins its anti-
bribery programme.
9

As part of the NFP's overall risk assessment methodology, it should have a process to review and identify
potential risks. The risk assessment process is the foundation for designing an effective anti-bribery
programme. t will involve the whole organisation and the Board, management, employees and volunteers
can all contribute by looking out for any concerns in the course of their activities. t will then describe some
of the factors that can lead to bribery risk. There are fve principal stages to the risk assessment process:
1. Starting the risk assessment process
2. dentifying the bribery risks
3. Assessing the risks
4. Mitigating the risks
5. Regularly reviewing the risks
2.2.1 Starting the risk assessment process
Risk assessment should be carried out when the NFP frst designs its anti-bribery programme and will
then be a regular exercise to monitor, improve and ensure that the anti-bribery programme is updated and
remains effective as circumstances and risks change.
SIGNPOST
Large and complex organisations with a high bribery risk will need to use more sophisticated
risk assessment approaches. T publishes a separate guidance document called Diagnosing
Bribery Risk which will be helpful to such organisations. But risk assessment can involve a simple
approach. For example, identifying risk can consist of a simple discussion by the Board and
management based on the experience of the NFP, brainstorming areas that might cause risk of
bribery and then deciding if they are signifcant.
9. MoJ Guidance, Principle 3, Risk Assessment: "The commercial organisation assesses the nature and extent of its
exposure to potential external and internal risks of bribery on its behalf by persons associated with it. The assessment
is periodic, informed and documented.
9
The NFP will need to decide how it is practically going to carry out risk assessment. This includes:
Appointing the person or team to carry out the review and deciding if it is to be a permanent function
or to be recreated each year (an external party could be engaged by the NFP for this purpose as
employees may fnd it easier to speak to a third party)
Scoping the exercise and, if necessary, allocating or budgeting for the resources
dentifying potential risks as discussed below
Documenting the exercise for use in future reviews and also as an audit trail if needed, for any risks
or incidents that might be discovered
2.2.2 Identifying bribery risks
The next stage in the process is to identify bribery risk factors and risks.
An NFP's risks of bribery will depend on its individual circumstances but there are some common factors
that accentuate bribery risks. Risk factors are internal or external circumstances that could make it more
likely that bribery will occur. The Table below lists some of the likely risk factors for NFPs.
ExternaI
factors

InternaI
factors
Countries of operation
Sectors with known high risk
Foreign Public Offcials


Urgency

Greater good

Other corruption


Critical skills reside in one
employee
nfux of new staff or
volunteers
Dependent on partner
organisation
Local staff
Countries with high levels of corruption
Construction, facilities management, logistics
The Bribery Act creates an offence related to
Foreign Public Offcials
Overriding or circumvention of controls at times
of crisis or urgency such as such as disaster
relief, speed orders, critical supplies
The need to meet the mission of the NFP
overrides the bribery policy e.g., bribes to
speed critical food supplies through customs
Corruption by an employee such as receipt
of excessive hospitality, fraud or money
laundering opens the door to bribery
approaches by corrupt associates
The employee may be vulnerable to bribery
because of his/her infuential position
The staff or volunteers may not be imbued with
the NFP's integrity culture or lack skills to deal
with bribery
The NFP is totally or largely reliant on its
partner to run a project
The NFP is totally or largely reliant on local
staff to run a project
Context Risk factor Description
BOX: Some signicant bribery risk factors for NFPs
10
Ways of identifying bribery risks
Discussion in the Board - this will focus on strategic and organisational risks
Review of whistleblowing and hotline use
Past incidents and their impact
Self-assessment asking all relevant stakeholders to complete a simple online survey
Web and literature searches
nterviews and surveys of staff, academic faculty, employees and associates such as suppliers
and intermediaries, donors, sponsors, supporters, alumni
Brainstorming and facilitated group discussion workshops
nterviews of peer NFPs
Advice from professional advisers accountants, auditors, legal, anti-bribery consultants
Discussions in countries with the local Embassy or High Commission, Chamber of Commerce,
NGOs such as Transparency nternational chapters or Global Compact Networks
SCENARIO: EducationaI contract tied to award of honoury degree
A university is negotiating with an overseas education ministry for an important contract. The
minister of education for the country decides to visit the UK and his offcials make known that it
would be appropriate if, during his visit to the university, an Honorary Degree could be conferred
on the Minister. The university declines respectfully advising that this would not accord with the
process for Honorary Degrees. The university is advised in due course that it has not been granted
the contract.
Comment: The university rightly assessed that giving an Honorary Degree would be a bribe. While
the loss of the contract was an immediate penalty for holding to the policy, in the long term the
university should be able to use its reputation for integrity to be viewed as a favoured partner and
its no-bribery stance may also deter solicitation of bribes when bidding for other contracts.
SIGNPOST
Foreign Public Offcials (FPOs) present particular bribery risks. They are specifcally referenced in
much anti-bribery legislation. Any NFP that deals with FPOs, or their friends or relations, should
exercise particular caution. FPOs may include any state employee, such as a doctor or architect,
as well as ordinary civil servants. The NFP should take care not to offer benefts to FPOs such as
hospitality, gifts and travel where these might be interpreted as bribes.
The challenge is to ensure that all relevant risks are identifed for consideration and brainstorming will
help at this point. While an NFP may approach the risk assessment process with commitment and
thoroughness, the following threats could affect the review:
Overconfdence about the effectiveness of current anti-bribery controls
Operating on a culture of trust or 'family' and assuming trust will not be breached
Accepting current practices 'it has always been done this way'
Resistance from managers and employees 'implying there could be bribery is a personal affront'
There should be a thorough process of consultation, information gathering and analysis that brings into
view all relevant risks. Management, employees and associates will have a good idea where the risks of
bribery lie. The consultation process, in itself, is a message about the NFP's anti-bribery commitment to
anti-bribery. The conclusion of this stage will be an inventory of risks which will be used for the next stage
of assessing the risks.
There should
be a thorough
process of
consultation,
information
gathering
and analysis
that brings
into view all
relevant risks.
Management,
employees
and associates
will have a
good idea
where the risks
of bribery lie
11
2.2.3 Assessing risks
The next step is to assess the identifed risks and decide their likelihood and the potential severity.
The assessment can be both quantitative and qualitative. Applying a 'traffc light' system to indicate
the ranking of risks can assist management in directing its attention to signifcant risks, but signifcant
bribery can occur in areas which may fall outside the higher scored risks.
For instance, countries prone to bribery risk may be identifed using Transparency nternational's
Corruption Perceptions ndex, but bribery can also take place in countries seen as good performers.
While these incidents may be infrequent, the material impact of an incident can be high.
The NFP, based on its risk assessment, will then select the risks which it will plan to counter.
Recruitment and
admissions





Award of
quaIications
Award of
honours
Franchises and
accreditation

InteIIectuaI
property
Agents for universities accept bribes from students or families or pay bribes to assist
students to get visas
Sponsored students from a government or a company may have been funded with
laundered money or selected through the infuence of bribery
Potential pupils are funded by corrupt money (an offence under Proceeds of Crime
legislation)
Students bribe to obtain false degrees and achievements in order to meet admission
criteria
Agents paid on commission do not select students on a fair basis

Students or relatives bribe to infuence marking and award of qualifcations
A title or award such as an Honorary Degree is sought in return for giving a contract to
the NFP
nstitutions obtain a franchise through bribery; relax the rules for admission and
evaluation of students; accept bribes to award degrees or to tolerate plagiarism and
examination fraud
nformation and expertise is stolen though bribery - "Academic institutions possess
intellectual property that many people would give their right arm for. Professor Eric
Thomas, President of Universities UK and vice-chancellor of the University of Bristol,
The Financial Times, 11 April 2013.
TABLE: Bribery risks in the education sector
Transaction risks will vary by sector. The education sector is particularly at risk, having many
forms of transaction vulnerable to bribery owing largely to the globalisation of education and the
high importance of educational qualifcations. This table gives some examples of risks the sector
may encounter, to illustrate how an NFP might go about understanding its risks.
SIGNPOST
Use the Corruption Perceptions ndex and other research published by Transparency nternational
to fnd out which countries are seen as having high levels of corruption. n some countries
corruption is prevalent and the risks are extremely high. Some NFPs may decide to avoid high
risk countries, but for NFPs such as aid and development charities this will not be an option. Other
NFPs which do have a choice where they operate may nevertheless decide to operate in high risk
countries if they believe that they have an adequate anti-bribery programme to counter the risks.
12
SIGNPOST
When countering bribery attention should be given to other forms of corruption, such as fraud and
money-laundering, as they can generate an environment for bribery to fourish.
SIGNPOST
nternal and external environments are dynamic and risks may change accordingly. Your
organisation should check its anti-bribery programme periodically to ensure it remains adequate.
2.2.4 Mitigating the assessed signicant risks
The NFP should develop detailed policies and procedures to counter the risks that have been assessed
as requiring such measures. For example, an NFP may stop using agents and deal directly with client
groups. One other option, less suitable in most instances, is to withdraw from the risk area. For example, a
university may decide that a country has too high a level of corruption to warrant remaining in the country
or that a partner in a joint venture is not meeting the required standard for anti-bribery measures and the
association should be ended. These are drastic approaches but may sometimes be necessary where
countering risks is unlikely to work. Thought should be given before entering a country or joint venture on
how the NFP could extricate itself if bribery enters the picture and cannot be remedied.
2.2.5 Reviewing risks reguIarIy
Risk assessments should be repeated regularly to refect changing circumstances. The results of risk
assessment should be reviewed by senior management and any concerns identifed. A report should be
made regularly to the audit committee and the Board on the review.
t is good practice to report publicly on the risks the NFP may face and the measures taken to mitigate the
risks. Law may require the NFP to make a risk statement as is the case for larger UK charities.
CASE STUDY: University sports betting bribery
Three men pleaded guilty in an alleged scheme to fx a US university basketball game. They were
among ten people charged with running a sports betting business to fx West Coast Conference
games. Those charged included the school's all-time leading scorer, a former coach and a former
player.
Comment: This US example illustrates that bribery can happen in all countries and can be in an
activity that might easily be overlooked in a risk assessment.
SCENARIO: University negotiating a pubIishing agreement with a Chinese university
A UK university is negotiating a major publishing contract with a Chinese university for a range of
scientifc and technical books and online education. t is the Chinese New Year and the university
negotiators, mindful of the Chinese custom of gifts and that they are negotiating a publishing
deal, give their counterparts valuable antiquarian books tailored to the status of the recipient.
Comment: Although gift giving is a custom in China, the gifts of antiquarian books seem
excessive in value. The state in China controls all institutions including universities and therefore
the Chinese negotiators would likely be FPOs and the gifts could be an offence under the
Bribery Act.
13
2.3 EFFECTIVE ANTI-BRIBERY POLICIES AND PROCEDURES
PrincipIe: The organisation designs and implements anti-bribery policies and procedures that are
effective and proportionate to the organisation's risks, circumstances and culture.
10


The next stage is to design and implement detailed policies and procedures to counter signifcant risks
identifed through the risk assessment process described above.
The policies and procedures should be proportionate to the identifed risks and provide reasonable
assurance that the NFP will comply with its no-bribes policy. A named individual should be appointed with
responsibility for the policies and procedures and to ensure they are implemented, documented and kept
up-to-date. The procedures should be communicated and issued in the main languages of employees.
There are certain activities or transactions where bribery can commonly be a risk. When faced with such
risks, the NFP should:
Analyse how bribery can occur in the transaction or activity
Develop procedures to counter the risks
Develop tailored communications and training covering the risks, the relevant policies and
procedures and ways of countering the risks
Document activities fully
Regularly monitor the risks and that the procedures are working

For NFPs facing higher levels of bribery risk, detailed policies and procedures should cover in particular
the areas described in detail in this section.
CASE STUDY: Procurement kickback
A former director of an international wing of a television network was jailed for 20 months by a court
in an Asian country for taking bribes. Two businessmen who acted as agents for fve suppliers and
gave him the cash also received the same sentence. The former director had overall responsibility
for the network's global marketing and brand development, and took the bribes in exchange for
placing orders for toys and bags with the agents which were already the exclusive toy-sourcing
partners of the network.
Comment: Procurement can be a high risk area for NFPs. Checks and balances need to be built
into the procurement process including competitive quotations, due diligence on suppliers, separation
of duties, delegated sign-off levels with counter-signatures, rotation of buyers and regular audits.
10. MoJ Guidance, Principle 1, Proportionate Procedures: "A commercial organisation's procedures to prevent bribery
by persons associated with it are proportionate to the bribery risks it faces and to the nature, scale and complexity of the
commercial organisation's activities. They are also clear, practical, accessible, effectively implemented and enforced.
SIGNPOST
The NFP should ensure it has in place a system of internal controls to make sure the anti-bribery
programme is implemented and monitored. For larger organisations, the internal audit function
will play an important role. n smaller organisations, it may be monitored by a designated senior
manager or Board committee. The success of implementing the programme will also depend
greatly on support from the legal, Human Resources and fnance departments.
14
SIGNPOST
Make sure your NFP has policies and procedures for gifts and hospitality. These activities
can occur for any NFP, and there can be risk of inappropriate activity. t is important that your
employees know the policies and how to handle situations where they may occur. Undue gifts or
hospitality offered at the time discussion of a contract or grant could be considered bribery.
SIGNPOST
Provide guidance and training to employees on policy and procedures for giving and receiving
gifts, keep values of gifts to modest levels, design a gifts matrix to set fnancial values for
countries, keep a register of gifts received and given and have regular oversight of the register
by a senior manager.
2.3.1 Gifts, hospitaIity and traveI expenses
Risks: Gifts and hospitality, and to a lesser amount travel expenses (to enable visits to Head Offce or
projects, for example), have been the subject of much discussion in regard to the Bribery Act and related
legislation. Sometimes gifts and hospitality are intentionally used as bribes. At other times, they might
be interpreted as bribes, either by the recipient or by a prosecutor. The challenge for NFPs is that it is
often hard for employees to know where to draw the line between what is a reasonable and bona fde
expenditure and what is unreasonable expenditure made to infuence the recipient. Another risk is that
these activities can be used to groom and draw an employee unwittingly into a situation where improper
behaviour subsequently results.
Prevention: Good practice permits promotional expenditures, including gifts and hospitality where they are
transparent, proportionate, reasonable and bona fde. However, NFPs must ensure they have implemented
adequate policies and procedures. For example, it will probably be appropriate to:
Give clear guidance to Board and employees on giving or receiving gifts and hospitality
Train employees to deal with situations where gifts are offered or expected, especially if the NFP has
operations in countries where there are gift-giving cultures
Train employees on the NFP's policies on hospitality and expenses and how they can avoid being
drawn inadvertently into receiving inappropriate hospitality
Keep a register of gifts and/or hospitality (given and received) which exceeds a specifed value
SCENARIO: HospitaIity and traveI given in negotiation for a museum exhibition
A UK museum is negotiating to receive a major exhibition as part of a world tour of the exhibition to
three countries. There are known to be several capital cities in the running for the much sought-after
exhibition which is under the auspices of the originating country's government. The museum invites
the offcials from the country's Arts Ministry and the exhibition curators and managers to visit them
in the UK to see their museum's plans for accommodating and promoting the exhibition. Thanks to
help from a generous supporter, the UK museum is able to pay frst class travel expenses, including
a stay at one of London's best hotels, and arranges a programme of expensive entertaining events
around the visit.
Comment: The museum is negotiating a contract and is giving lavish travel expense and hospitality
to infuence the people who will decide on the contract. The deciding parties include Foreign Public
Offcials. This could be an offence under the Bribery Act and also may breach the museum's own
policy. t is not unreasonable for the overseas people to visit London to make a judgement on the
candidacy of the bidding museum, but the travel and hospitality is excessive, even if funded by a
friend of the museum.
Sometimes
gifts and
hospitality are
intentionally
used as bribes.
At other times,
they might be
interpreted
as bribes,
either by the
recipient or by
a prosecutor.
The challenge
for NFPs is that
it is often hard
for employees
to know where
to draw the line
between what
is a reasonable
and bona fde
expenditure
and what is
unreasonable
expenditure
made to
infuence the
recipient
15
2.3.2 Fundraising
Risks: NFPs rely extensively on donations, gifts, grants, endowments and sponsorships. Charitable
donations should be made without expectation of return but it is best practice when a donation is
made [to a charity] for the recipient to acknowledge this in a public credit. However, donors may seek
substantial privileges as well.
Prevention: The NFP, in negotiating donations, should take care not to offer benefts to the donor as
this could not only endanger the charitable status of the payment but could be judged as a bribe. The
Charity Commission publishes guidance on this area.
11
A well-known risk for universities or schools is
the prospective large donor who attaches a condition to the donation that a child or other relative is given
a place at the university or school. Similarly, arts organisations may be able to award privileges or titles
and should make sure that these are awarded following established and transparent criteria. Money
laundering is a related risk and checks should also be made that the source of funds comprising the
donation is legitimate. nternal checks and balances should be designed to prevent kickbacks with regard
to grants and sponsorship fees.
2.3.3 Human Resources
Human Resources (HR) can be a critical contributor to building the commitment of the NFP's employees
to the no-bribes policy and all aspects of implementation of the anti-bribery programme. HR policies and
procedures should be designed to support the anti-bribery programme. Here are some examples of how
this could be done:
Recruitment: design procedures to recruit people who will meet the NFP's standard of integrity
nduction/orientation: include information on the NFP's values and the anti-bribery programme
Contracts: require employees and board members to sign periodically that they have read and
understand the NFP's code of conduct
Contribute to the content of communications and training
ncorporate integrity performance including anti-bribery in appraisal and recognition this can
assess employees on how they represent the NFP 'integrity ambassadors' and contribute to
improvement of procedures and risk identifcation
Sanctions: provide and communicate clearly to employees the appropriate sanctions that will be
applied in the event of a bribery violation these must be seen to be applied openly and consistently
and to support the zero tolerance policy
t is also important to note that HR departments can themselves be subject to bribery risks, particularly
in the recruitment of employees. Bribery can take place in recruitment such as hiring local staff for a
community project in a developing country, or workers in a joint venture for construction of a campus or
depot. The bribes are paid by recruits to get appointed and the corruption can become systemic. The
result will be that inappropriate employees are recruited who lack both the right skills and integrity. To
avoid this, the NFP should set and apply objective criteria for advertising and interviewing, build checks
and balances into the recruitment process and document the entire process.
2.3.4 Bidding for contracts or projects
Risk: NFPs can be involved in bids for major contracts or projects. Bribes may be solicited from the NFP
for the award of contracts or projects, especially in countries where corruption is prevalent. f the bids are
made through an intermediary this adds an extra dimension of risk. Bribes may be cash but could be in-
kind, such as educational scholarships for relatives of the offcial who decides a contract.
Prevention: appropriate measures could include the following:
Employees should be given assurance that they will not be penalised for losing a contract or project
for refusing to pay a bribe.
Where a competitor is believed to have offered a bribe to win a contract, the NFP should consult the
local Embassy or High Commission to see if the matter could be taken up with the authorities.
Activities, calls and meetings related to the bid should be documented.
11. http://www.charitycommission.gov.uk/detailed-guidance/protecting-your-charity/protecting-charities-from-harm-
compliance-toolkit/chapter-2-due-diligence-monitoring-and-end-use-of-funds/chapter-2-summary/#due
A well-
known
risk for
universities
or schools
is the
prospective
large donor
who
attaches a
condition
to the
donation
that a child
or other
relative is
given a
place at the
university
or school.
Similarly,
arts organis-
ations may
be able to
award
privileges
or titles and
should
make sure
that these
are
awarded
following
established
and trans-
parent
criteria
16
2.3.5 CriticaI Iicences, permits or certication
Risks: This is a classic area for bribery as many organisations are dependent on receiving permits or
licenses in order to operate or expand. There are a vast range of approvals and licenses that may be
needed to enable the activity of an NFP and in some countries they can be associated with demands for
bribes for the necessary approvals to be given. As the licences or approvals are usually offcial, they are
likely to involve a Foreign Public Offcial.
CASE STUDY: University pubIishing house made improper payments to win contracts
A university became aware of the possibility of irregular tendering practices involving its education
business in East Africa. The university acted immediately to investigate the matter, instructing
independent lawyers and forensic accountants to undertake a detailed investigation. Two of
these contracts were fnanced by the World Bank. As a result of the investigation, the university
voluntarily reported to the UK authorities certain concerns in relation to contracts arising from
a number of public tenders which two subsidiaries had entered into. nvestigations by the SFO
and the World Bank led them to believe that the subsidiaries had offered and made payments,
directly and through agents, intended to induce the recipients to award competitive tenders and/or
publishing contracts for schoolbooks to the subsidiaries.
The education company, a wholly owned subsidiary of the university, was ordered by the High
Court to pay nearly 1.9 million in recognition of sums it had received which were generated
through unlawful conduct. The Serious Fraud Offce said that there was no evidence of board-level
connivance in relation to the bribery, and the products supplied were of a "good standard and
provided at market values.
Comment: These contracts would be assessed as high risk in any risk assessment being located
in countries where corruption is prevalent and involving government offcials. The education
company's internal controls should have been designed to deal with such risks. mportantly, the
SFO found that the university had conducted itself in a manner which fully met the criteria set out
in SFO guidance on self-reporting matters of overseas corruption. t is important that when controls
have failed that the NFP takes urgent action to strengthen its anti-bribery programme. n this case,
the education company introduced enhanced compliance procedures which were subject to review
by a monitor who had to report to the Director of the SFO within twelve months, with additional
and separate reporting to the World Bank. The monitor had to meet strict criteria, including clear
independence from the education company.
CASE STUDY: Charity paid bribes to sustain government contracts deIivered
with embezzIement
The former CEO of a US charity employing disabled people was sentenced by a US court to ten
years in prison and ordered to pay about US $70 million for bribing elected offcials to secure
federal contracts and for embezzling government funds. The judge also sentenced a former board
member of the charity to three years in prison and ordered him to pay $1.7 million in restitution.
According to prosecutors, the former CEO made false statements to a federal agency, in order
to fraudulently secure no-bid contracts and he also paid cash and other bribes to elected offcials
in order to secure certain vendor contracts. n total, the charity received payments of about $690
million from the U.S. Department of Defense and received millions more dollars from other federal
agencies, prosecutors claimed.
Comment: n this instance, the problem was at the top with a powerful, dominant and high profle
CEO. nvestigative journalism was a factor in exposing the fraud. The incident shows how bribery
can be part of wider corruption. Here, it appears to have been used to sustain the contracts which
were at risk if the continuing frauds were exposed. Good governance by the board and oversight of
senior management supported by reviews and independent audits of operations can contribute to
preventing such corruption.
17
CASE STUDY: University procurement bribery
n 2013 the ndependent Commission Against Corruption (CAC), New South Wales, Australia,
stated that a university manager could face prosecution, after fnding that he had solicited
225,000 Australian dollars in cash, travel and gifts from four suppliers. The manager had corruptly
received the money and benefts between 2006 and 2011 while head of engineering services
at the university. He allegedly solicited and received $119,000 of the money from the suppliers
through his family company. The funds were disguised as payment for work carried out, or goods
supplied by the manager's family company that it did not do or supply. During the years, all four
contractors invoiced the university a total of $17.8 million.
Comment: Purchasing is an area of high risk even in countries not considered prone to
corruption. f an NFP has signifcant purchasing activities then it should assess the risks and
create internal controls accordingly.
Prevention: appropriate measures could include the following:
As the range of potential approvals is large, the NFP as part of its controls should maintain a register
of licences and approvals and evaluate the processes needed to obtain them and any associated
risks of bribery
The NFP should check that its suppliers are entitled to certifcates. n the case of universities and
schools, checks will need to be made on the educational qualifcations and visas of applicants
Training should be given to employees and partners on how to resist demands
Collective action may be a way of eliminating demands
2.3.6 Purchasing and contracting
Risk: Purchasing is vulnerable to the receipt of bribes (passive bribery) and risks are higher when the
NFP is involved in major projects such as awarding T contracts or building facilities. The bribes can take
the form of kickbacks paid after the contract has been awarded and once the bribe-payer has generated
the funds to reward the corrupt purchasing employee. Contracts involving construction have especially
high bribery risks.
Prevention: Bribery risk can be countered by internal controls. Checks and balances include:
When setting the specifcations for a contract, the NFP should have checks in the process to ensure
that the specifcations are not distorted to match one particular supplier's product or services,
thereby excluding or putting at a disadvantage other potential suppliers.
Rush orders are vulnerable to bribery as the urgency can circumvent normal controls. These should
be documented and reviewed regularly by senior management.
Staff in vulnerable positions or countries should be rotated.
The NFP should communicate to potential suppliers its commitment to anti-bribery and to fair trading.
Contracts involving major construction should be monitored closely, especially in countries with high
corruption or where reliance has to be placed on an associate for the construction project. Checks
should be made during the contract implementation phase as it is often in this phase that the greater
part of bribery takes place.
12. The Business Principles for Countering Bribery, Transparency nternational
2.3.6 FaciIitation payments and other smaII bribes
Risks: Facilitation payments and solicitation for other small bribes are common in countries where
corruption is prevalent. Facilitation payments are 'small unoffcial payments made to secure or expedite
the performance of a routine or necessary action to which the payer of the facilitation payment has legal
or other entitlement.'
12
They can, for example, be demanded from employees wishing to enter countries,
to move goods through customs or across borders or to gain approvals such as licences. The UK Bribery
Act and many other countries' anti-bribery laws make no distinction between facilitation payments and any
other type of bribe. Facilitation payments and other small bribes can be a severe problem for many NFPs,
Contracts
involving
construction
have
especially
high bribery
risks
Facilitation
payments
and other
small bribes
can be a
severe
problem for
many NFPs
18
SCENARIO: FaciIitation payments to enter a country
A manager from a charity travels frequently to an emerging market where the charity has projects.
nvariably, a facilitation payment is demanded by a passport offcial when the employee enters
the country. The charity has a strict policy not to pay facilitation payments so rather than go to the
trouble of arguing with the offcials the employee has paid the bribes out of their own pocket and
has never mentioned this to the charity. Other employees raise a concern that the manager never
has trouble on entry and on questioning the manager reveals that bribes have been paid out of
personal funds.
Comment: Employees may chose to pay the bribes themselves to avoid delay and feel that they
that are not affecting their employer in doing so. Nevertheless they are acting as employees and
the NFP is liable for their actions. Also, the NFP's name will be attached to the bribery and the
employee is undermining the NFP's efforts to eliminate the payments. The payments could detract
from the NFP building its reputation in the market as an organisation that implements a strict no-
bribes policy.
such as voluntary organisations working in overseas development. Facilitation payments and small bribes
can also be a problem for employees and volunteers outside their work, and the NFP may need to assist
them in dealing with this.
Prevention: T recognises that organisations which decide to prohibit facilitation payments cannot
eliminate them overnight. Organisations need to develop procedures and training and gain commitment
from employees to deal with this diffcult issue. There may be costs, delays and inconveniences as a result
of implementing the process of resisting demands for example, employees may have to miss fights to
make their point with airport offcials.
An NFP should ensure it has a policy to prohibit facilitation payments and to review its policy and
procedures regarding facilitation payments. Procedures could include:
Making all employees and agents aware of the policy of prohibiting facilitation payments.
Researching how such payments could occur in the NFP's activities and designing procedures to
counter these circumstances.
Training employees and associates, including negotiation skills on how to resist demands.
Providing leafets or cards in the local languages where the employees and volunteers travel,
explaining that the NFP does not make such payments.
Building time into projects to allow for delays as a consequence of the refusal to pay.
Engaging in collective action and representations to governments.
Making joint representations to the authorities and asking for action. Embassies, High Commissions
and chambers of commerce may be able to assist too.
Using the institutional reputation to take a clear and principled public stance against such payments,
embarrassing offcials into dropping demands.
2.3.7 CoIIective action
t can be diffcult for NFPs operating in countries with high levels of corruption to carry out activities or win
contracts in an environment where bribes are demanded or solicited at every turn. While large global NFPs
may be able to use their reputation, resources and experience to resist attempts at bribery, smaller NFPs
will fnd it less easy to deal with pervasive bribery.
Collective action offers a way for NFPs and others to join together to gain greater strength to counter the
threats of bribery. Collective action takes many forms depending on the local context, nature of the market
or projects, risks of bribery and the mix of available companies and organisations.
19
Due diligence on associates is a key part of a good anti-bribery programme. Even so, a recent survey
found that only a third of charities surveyed conducted due diligence on partners, staff, agents, suppliers,
benefciaries and countries, with similarly low numbers having implemented a range of other measures.
14

Many commercial organisations fnd this the most problematic area of an anti-bribery programme. There
is no defnitive guidance as to how much due diligence to do, and on which associates it should be done.
The Charity Commission has guidance available on when and how charities and NFPs should undertake
due diligence.
15

Some commercial organisations have realised that they have many high-risk relationships with
associates and are trying to rationalise the number of relationships. Most NFPs will not have the same
level of resource as a commercial organisation, and so may fnd anti-bribery due diligence particularly
challenging. However, there are specialist companies that can help with due diligence, and there is much
publicly-available information to help.
Many bribery scandals have involved bribery carried out by associates, particularly agents and joint
ventures and the NFP needs to design policies and procedures to prevent the risk of its associates
using bribery on its behalf. NFPs may have a variety of such associates. For example, they may be
using agents for services such as recruiting overseas students. Voluntary organisations, arts and
heritage bodies, universities and schools may be engaged in joint ventures for overseas projects such
as delivering aid projects or mounting exhibitions. Some NFPs operate in countries where corruption
is highly prevalent and there is a signifcant risk of involvement with terrorist networks or 'proscribed
organisations'. This reinforces both the need for, and complexity of, due diligence.
16

The Bribery Act is drawn widely with respect to bribery carried out by another person associated with the
organisation as it states that an associated person is one who provides services for or on behalf of the
organisation.
17
n such a case, an NFP may become criminally liable for the associate's actions. Associates
include subsidiaries and investments, agents, joint ventures, franchisees, suppliers and contractors.
The risk assessment process should identify potential risks from bribery for each form of associate.
The particular risks for forms of associate are described below with suggestions for countering the risks.
2.4.1 GeneraI principIes in deaIing with associates
There are some general procedures based on the Business Principles for Countering Bribery that can be
applied to countering bribery related to associates.
SIGNPOST
Make sure potential associates are bona fde by simple checks such as references and web
searches. Require payments to be made through banks. Proposals that payments or fees should
be made in cash will be a red fag.
13. MoJ Guidance, Principle 4, Due Diligence: "The . . . organisation applies due diligence procedures, taking a
proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the
organisation, in order to mitigate identifed bribery risks.
14. Managing charities Risks and opportunities: a leadership survey, Baker Tilly, Winter 2011/2012
15. http://www.charitycommission.gov.uk/detailed-guidance/protecting-your-charity/protecting-charities-from-harm-
compliance-toolkit/
16. http://www.charitycommission.gov.uk/detailed-guidance/protecting-your-charity/protecting-charities-from-harm-
compliance-toolkit/chapter-1-charities-and-terrorism/chapter-1-module-5-proscribed-organisations/
17. The Bribery Act 2010, section 8 (1)
2.4 DUE DILIGENCE AND PROCEDURES FOR THIRD PARTIES
PrincipIe: The organisation carries out reasonable and proportionate due diligence on potential
associates before entering into contracts with them, and puts in place procedures for managing the
associated risks on an on-going basis.
13
Many
bribery
scandals
have
involved
bribery
carried out
by assoc-
iates,
particularly
agents and
joint
ventures
and the
NFP needs
to design
policies and
procedures
to prevent
the risk of
its
associates
using
bribery on
its behalf
20
The NFP should implement its anti-bribery programme in all entities over which it has effective control
Where the NFP does not have effective control of an entity it should use its infuence to encourage an
equivalent anti-bribery programme in associates with which it has signifcant relationships
The NFP should undertake properly documented, reasonable and proportionate anti-bribery due
diligence on associates when entering into a relationship, and once the associate is appointed, repeat
the due diligence periodically (due diligence is described in full in Section 2.4.2)
The NFP should avoid dealing with entities known, or reasonably suspected, to be paying or receiving
bribes
The NFP should perform reasonable and proportionate monitoring on a continuing basis of its
signifcant relationships this can include the right to inspection of books and records
The NFP should document relevant aspects of the implementation of its programme or equivalent by
associates
The associate should be supported where appropriate by providing training and advice on anti-bribery
measures
n the event that policies and practices of the associate are inconsistent with the NFP's programme
the NFP should take appropriate action, which can include requiring correction of defciencies in the
implementation of the associate's programme or the application of sanctions
The NFP should have a right of termination in the event that associates engage in bribery or act in a
manner inconsistent with the NFP's programme
Contracts should be reviewed periodically
The NFP should ensure it has identifed all its associates and documents its relationships with them
2.4.2 Carrying out due diIigence
When carrying out due diligence, an NFP should consider checking the following:
Prospective associates are reputable and fnancially sound and have the resources and expertise to
be able to carry out their activities for the NFP
No past or current allegations of corruption, convictions or prosecutions involving other parties, their
boards, offcers or employees
Prospective associates have adequate anti-bribery programmes
Bribery is not part of the potential associate's activities e.g., a group of proposed students is
sponsored by a company and there is suspicion they have been sponsored as bribes for parents who
are the company's customers
That the funds or assets brought by an associate are not from money-laundering of the proceeds of
crime or bribery
Whether potential joint venture partners are government owned - distribution of payments to offcials
who act as directors or offcers of the joint venture could be construed as improper payments
Whether there are FPOs involved with the associate
Whether people in relevant business sectors, embassies and business associations are aware of any
potential issues or concerns
2.4.3 Agents
SIGNPOST
f dealing with agents during fundraising or recruitment (for example of students), refer to the
seven principles of the 'London Statement' - a code of ethics brokered by the British Council in
March 2012, in which agents are requested both to avoid and to declare conficts of interest, as
well as to be 'transparent in fees to be paid by students and commissions paid by providers'. f an
agent is working for more than one university then the agent should provide advice which is fair
and balanced and meets the student's needs.
21
Risk: Agents can play an important role in the activities of many NFPs. However, they are also a high
risk area especially if there is substantial engagement with government offcials. Agents can be used in
several ways, for example by:
Schools and universities to recruit students
Arts organisations to arrange performing arts tours or negotiate exhibitions
Voluntary organisations to deliver projects
Agents acting on their own initiative in their work for the NFP may become involved in bribery and
thereby implicate the NFP without its knowledge. Agents can become involved in bribery in ways such
as arranging visas, obtaining licenses and obtaining release of goods from customs, as well as in the
payment of large bribes to secure contracts. An NFP could be liable for an offence under the Bribery Act
for bribery by an agent acting on its behalf.
Prevention:
deally, full due diligence should be used when appointing an agent, especially if they operate in a
high-risk area.
Once appointed, agents should be monitored regularly to check that they remain in compliance with
the NFP's anti-bribery programme.
The potential agent should be required to provide details of its shareholders, directors, other clients,
any involvement with public offcials and its resources and capabilities to perform the required
service and this information then needs to be independently verifed.
The NFP should ensure that fees paid to agents are appropriate for the services carried out and do
not provide scope for the agents to pay bribes.
Existing agents should continue to be subjected to due diligence as they may not have undergone
the due diligence procedure originally, or substantive changes may have occurred since due
diligence was last carried out.
The process for appointing and managing an agent should be underpinned by documentation and
monitoring throughout the life of the relationship.
The NFP should also periodically seek the views of local organisations and the community to check
current opinion of the agent's standing and integrity.
SCENARIO: Agency for dance company pays kickbacks to theatres
A dance company is arranging an overseas tour in a country with high corruption. t appoints a
local dance agency to negotiate bookings with theatres. The agency charges high fees for its
services saying that the negotiations are demanding and complex. The agency is successful in
arranging the tour and the fees obtained from the theatres are at a good level. During the course
of the tour, the dance company administrator learns that it is common practice for the theatre
managers to ask for a kickback of fees. The administrator confronts the agency, which admits the
payments but says that without them the tour would not have happened.
Comment: The dance company should have taken advice before entering into the tour and would
have learned that it was likely that bribes would be required to gain bookings. The options would
have been either not to become involved in such a tour or to insert checks and controls into the
project, including a lower fee to the agency, detailed accounts and drawing on local advice such as
the British Council representative and the British Embassy or High Commission. As bribes appear
to have been paid, the dance company should consult its legal advisers with a view to reporting
the concern to the authorities.
22
CASE STUDY: UK universities use agents extensiveIy to recruit overseas students
t was reported in a Times Higher Education investigation in 2012 that UK universities recruited
more than 50,000 international students through commission payments to overseas agents,
spending close to 60 million on the practice in 2010-11. Almost all money paid to recruitment
agents was on a per-student commission basis. The survey found that in certain respects, most
universities had little idea how their agents were operating. Some seven in ten said they did not
know how many students were charged separate fees by agents in addition to the commission
payments made by the universities. A 2012 investigation by The Daily Telegraph found offcial
agents boasting that they could secure places for overseas students with far worse A-level results
than those expected of British pupils.
Comment: Due diligence needs to be carried out on agents before appointing them and then they
need to be monitored closely to prevent bribes being given to agents by families of prospective
students. Another risk is that agents acting on commission from a university might not reveal this to
prospective students and advice is presented as being given impartially when it is not. Universities
should monitor their agents closely to ensure their agents declare if they are working under
commission and that they are not receiving bribes from applicant students.
SCENARIO:License for Ioan of artefact for an exhibition in the UK
A UK museum is mounting a major exhibition about an ancient civilisation. An artefact held in the
country where the civilisation was located is of highest importance to the exhibition but the country
authorities are known to be reluctant to release the artefact, ostensibly on grounds that it is too
delicate to travel. The UK museum has appointed at short notice a local dignitary who claims high
level contacts as its representative to negotiate with the Head of Antiquities in the Culture Ministry.
The representative has asked for a substantial fee but assures the UK museum it will be money
well spent as he is sure he can negotiate the license. He keeps to his word and the licence is given
within a few days of the representative being appointed.
Comment: The UK museum may have associated itself with bribery as it appears to have
appointed an agent without due diligence, who is not an art expert and has been given a
substantial fee which allows room for a bribe to be paid. The surprisingly speedy resolution of
the matter is a concern, as is the involvement of a Foreign Public Offcial. The museum needs to
investigate how the approval was obtained and if bribery is suspected take appropriate action such
as seeking legal advice and reporting the suspicion to the UK authorities.
2.4.4 Joint ventures
Risk: An NFP entering into a joint venture ('venture') will be attaching its reputation to the venture and
may also be liable criminally under the Bribery Act and in the civil courts if the venture becomes involved
in bribery. Some NFPs, notably universities, are investing in or controlling joint ventures such as overseas
campuses, and some museums and galleries are expanding nationally and globally. Such ventures may
involve interaction with the local government and FPOs.
Prevention: f the NFP has effective control of a venture it should require the venture to have policies
and procedures that align to the NFP's anti-bribery programme. As with agents, the NFP should carry out
due diligence before entering into joint ventures and should have a procedure to assess the existence
and scope of issues that could affect its partners or the operation of the ventures. f an NFP does
not have effective control then, following due diligence, it should require the venture to have an anti-
bribery programme that is consistent with that of the NFP. Otherwise the NFP might be associated with
activities that are of a lesser standard than that it sets for itself. How this is accomplished will depend
on the degree of infuence that the NFP has and the willingness of its partners to accept an anti-bribery
programme. f the partners fail to implement adequate anti-bribery procedures then the NFP may be
faced with the diffcult task of withdrawing from the venture if it believes that bribery is likely to take place.
23
SCENARIO: Joint venture in SE Asia invoIving construction
A UK school has entered into a joint venture on a 30% minority basis with a school in a South-East
Asian country known for high risk of corruption, to form a joint academy which will deliver joint
courses in the country as well periods of study in the UK.
Comment: There are several high-level risks. The venture is located in a country known for
corruption and entails a major construction project, foreign public offcials (FPOs) are involved and
the school is a minority partner, relying on its partner to manage the project. According to many
surveys, the construction sector has the highest risk of bribery. NFPs engaged in joint ventures
should ensure:
Due diligence is carried out on partners before commitment to the venture
The anti-bribery programme of the venture is adequate and that the venture has contractual
provision for observance of the programme
They do not rely entirely on partners for anti-bribery measures but oversee and monitor the
projects as well
Preventive measures and monitoring are carried out to ensure that any interactions with
Foreign Public Offcials do not involve benefts for them and risk an offence under the UK
Bribery Act
They report publicly on ventures, how the anti-bribery programmes are applied and the results
of monitoring
2.4.5 SuppIiers and contractors
Risk: Contracting and purchasing are highly vulnerable to bribery and kickbacks. Some NFPs have
signifcant purchases of supplies and services, commission construction projects which are in a
sector prone to corruption and they are increasingly outsourcing critical activities such as information
technology, research or teaching. Any supplier can be a risk to the NFP if it is paying or receiving bribes
as part of its association with an NFP. Apart from legal risk, corrupt suppliers are a risk to the NFP's
operations they represent an unstable supply source with possibly loss of critical supplies owing to
bribery investigations, they cannot be relied on in negotiations and they may attempt to bribe employees.
Prevention: Due diligence should be applied to prospective suppliers on a systematic, reasonable and
proportionate basis, recognising that there may be many suppliers in a supply chain. The NFP should
communicate its anti-bribery programme to bidders and suppliers; require contractually that suppliers and
contractors have adequate anti-bribery programmes and carry out appropriate monitoring to ensure their
compliance.
2.4.6 Subsidiaries and investments
Risk: An NFP's reputation is also at stake and dependent on the behaviour of all aspects of its
operations, including subsidiaries and any signifcant investments. Some universities, for example, are
forming subsidiaries to carry out commercial ventures and investing in ventures. The NFP could be liable
legally for the actions of a subsidiary that becomes involve in bribery.
Prevention: f an NFP has effective control of a subsidiary, regardless of the location of the subsidiary
or the nationality of its decision-making management, the NFP should require the same level of
implementation of its anti-bribery programme as that of its own. This requirement may be diffcult to
meet in some countries where anti-corruption efforts are weak and foreign investors are not allowed to
hold a controlling interest in local business entities. n an extreme case of concerns that a subsidiary
or investment is involved in bribery or other corrupt practices, the NFP may need to contact law
enforcement agencies or disengage from the investment. nvestments in ventures need attention too.
Good due diligence and monitoring form the foundation of a reasonable and proportionate approach.
This also applies to a signifcant investment, in which a scandal could be as damaging as if it were a
subsidiary.
Contracting
and
purchasing
are highly
vulnerable
to bribery
and
kickbacks
24
2.5 COMMUNICATION AND TRAINING
PrincipIe: The organisation builds awareness and understanding of its anti-bribery programme among its
Board, employees, volunteers and relevant stakeholders through communication and appropriate training.
t reports publicly on its anti-bribery measures.
18

2.5.1 Communication
Communication and training are critical areas for countering bribery. Communication is the way an NFP
will let its employees, volunteers, associates and other stakeholders know its stance on anti-bribery and
the detailed policies and procedures for implementation of the anti-bribery programme. Messages will need
to be renewed regularly to ensure employees, volunteers, and contractors working within the NFP do not
forget the importance of the anti-bribery programme in their daily work. Emphasis will need to be placed
on those employees who are most at risk, such as those in the purchasing department or capital assets
procurement.
External communication of the anti-bribery programme emphasises the NFP's commitment that it will
not tolerate bribery; this allows funders, sponsors, associates and the public to understand the ways in
which it is addressing the issue. n this way the NFP can build the confdence of stakeholders in its anti-
bribery measures and at the same time deter those who might wish to solicit bribes. Public reporting is a
signifcant way of communicating externally.
2.5.2 Training
All relevant employees and Board members should, as part of regular organisational training, receive
information about the anti-bribery programme. They should be required to attend training courses within a
short period after launch of the anti-bribery programme and then at regular intervals. This will enable the
core content of the anti-bribery programme to be communicated but importantly will allow employees to
understand the programme in depth and discuss any issues or concerns.
The feedback from the training will be valuable in indicating how well received it is by employees and may
also help in shaping improvements to the programme. Formal training can be supplemented by informal
gatherings at which employees can exchange experiences and solutions. This can overcome initial
reactions to the effect that guidance material is theoretical, impractical and not relevant to the individual
employee. Recruits (including appointments to the Board) should be given training in the programme
following joining the NFP.
Tailored training should be provided for functions which have particular needs and risks such as
procurement, those who manage overseas contracts, managing projects or agents or employees who
travel to or work in countries known to have corruption risks. Training should also be considered for
important associates such as project partners or agents.
CASE STUDY: Good practice communication and training
A charity works in education in sub-Saharan African countries. ts anti-bribery programme delivers
workshops which introduce the defnitions and legal implications of bribery; an anti-bribery
champion is appointed from each offce; and country-specifc example scenarios and proven
methods of resisting bribery are appended to the policy.
2.5.3 Advice and whistIebIowing channeIs
Advice lines and whistleblowing channels can have an important role in an effective anti-bribery
programme and many bribery violations have been exposed through whistleblowing. While attention
is largely given to whistleblowing channels, management should encourage employees to use the
advice lines before considering raising a matter in the whistleblowing channel. Very often an employee's
concern may be simply getting advice on how to deal with a dilemma or interpretation of a policy. The
whistleblowing line should be designed for raising concerns or allegations. Whistleblowing channels can
18. MoJ Guidance, Principle 5, Communication, including Training: "The commercial organisation seeks to ensure
that its bribery prevention policies and procedures are embedded and understood throughout the organisation through
internal and external communication, including training, that is proportionate to the risks it faces.
External
communication
of the anti-
bribery
programme
emphasises
the NFP's
commitment
that it will
not tolerate
bribery; this
allows funders,
sponsors,
associates and
the public to
understand the
ways in which
it is addressing
the issue
25
SIGNPOST
f your NFP already has advice and whistleblowing channels then include provision for reporting
concerns about bribery. f such channels are not in place you could consider introducing them to
your NFP as they have wider value than just inquiries and concerns other than just those relating
to bribery.
also be made available for third parties such as suppliers or project partners. Advice and whistleblowing
channels should be confdential or anonymous according to the laws of the particular jurisdiction. The use
of whistleblowing channels is growing, fostered by legislation such as the UK Public nterest Disclosure
Act (PDA) 1998 which applies across the private and voluntary sectors as well as to public bodies.
19

t should be made clear that the use of whistleblowing channels is encouraged and employees and
volunteers will not be victimised or suffer for whistleblowing. f whistleblowing channels are not effective,
employees lack confdence in the confdentiality or think they could be penalised, the danger is that
employees will go outside the organisation to media. Such an outcome would be unsatisfactory for the
NFP and also for the employee as there would not be an ordered way in which the concern could be
addressed. Thus, it is in the interest of all parties that whistleblowing channels work well.
Responsibility for managing the advice and whistleblowing channels should be allocated to a staff unit,
which will report on the management and performance of the channels to senior management or a Board
member. t could be decided that greater confdence would be provided to employees if the whistleblowing
channel were to be supplied by an independent provider appointed by the NFP.
Security can be provided, for example by confdential telephone services or intranet sites through which
employees and partners can address concerns or pass information. To make such services effective,
genuine concerns must be listened to and acted upon in a timely manner. Reports should be given
periodically to senior management and possibly the Board on the issues raised, the actions taken, the
promptness with which inquires were dealt and the satisfaction levels of users of the channels. There
should be a system in place for proper documentation and fling of the concerns raised; their handling and
the outcomes. The experience gained from the advice lines and whistleblowing channels can be used to
improve the anti-bribery programme.
2.5.4 PubIic reporting
Public reporting is an increasingly important aspect of external communication. NFPs can report to
stakeholders on their anti-bribery programme and its progress for example, in the Annual Review.
There has been substantial growth in public reporting by organisations including NFPs. Stakeholders are
expecting greater transparency of organisations on how they act responsibly and sustainably on material
topics and the risks that could affect achievement of organisations' aims. Public reporting is important
to countering bribery as transparency is a defence against corruption. Reporting can give confdence to
stakeholders on the NFP's anti-bribery measures and performances, enhance the reputation of the NFP
for not paying bribes and assist in deterring attempts at bribery by making known the commitment of the
NFP to not paying bribes. Reporting also drives performance.
CASE STUDY: PubIic reporting by NGOs
Stakeholders wish to be able to fnd easily the information they need and the Global Reporting
nitiative (GR) was formed for this purpose. Many organisations align their reporting to the GR
Sustainability Reporting Framework which includes integrity and anti-corruption indicators. The
GR has also developed sector supplements including one for NGOs. Amnesty nternational and
WWF nternational report aligned to the Supplement Framework. A small number of universities
report against the GR Framework including the University of Massachusetts Dartmouth and Ball
State University.
19. http://www.legislation.gov.uk/ukpga/1998/23/section/1 See also Charity Commision guidance http://www.
charitycommission.gov.uk/detailed-guidance/protecting-your-charity/guidance-for-auditors-and-independent-examiners/
the-public-interest-disclosure-act/
It should be
made clear
that the use
of whistle-
blowing
channels is
encouraged
and
employees
and volun-
teers will
not be
victimised
or suffer
for whistle-
blowing
26
SIGNPOST
Appoint a person to be responsible for ensuring periodic reviews to check that the bribery risks
remain low and that the existing anti-bribery programme is adequate. Look out for changes in
circumstances such as starting activities involving overseas countries. Document all reviews and
make reports periodically to the Board. Obtain an independent view if you can, or benchmark
peer NFPs to check that your approach is appropriate and working.
Reporting by an NFP should refect its size, nature of the organisation and the demands of its
stakeholders. Consideration should be given to publishing not only the code of conduct and anti-bribery
policies but the risks identifed and the effectiveness of measures being taken. Large charities are already
required by law to report on their risks.
2.6 MONITORING AND EVALUATION
PrincipIe: The organisation monitors the implementation and effectiveness of its anti-bribery programme.
The results of monitoring are reviewed regularly by the Board and guide improvements to the programme
as necessary.
20

Monitoring and evaluation is the stage where the NFP checks the degree to which its anti-bribery
programme is working effectively, meeting the anti-bribery objectives of the NFP and is in compliance with
the Bribery Act and other laws. NFPs operate within ever-changing environments, internally and externally,
and the monitoring and evaluation process should be regular and used to generate any necessary
improvements. Lessons will be learned from incidents whether allegations without basis or actual bribery
incidents.
The NFP should assign responsibility for monitoring the anti-bribery programme to a senior manager.
The Board (or a Board committee) should carry out oversight of the effectiveness of the anti-bribery
programme. The Board should receive reports on the results of regular monitoring, internal audits,
external assurance and reviews and assessments by management and details of actions they have
initiated. The reports should identify defciencies and recommendations for actions and improvements. t
is the responsibility of the Board, in discussion with management, to decide whether actions taken were
appropriate to deal with the risks and to improve the effectiveness of the anti-bribery programme and what
further steps are necessary.
Internal audit
nternal audit is part of the monitoring process. t is usual for internal auditors to conduct operational as
well as fnancial audits. n some organisations the internal auditor is also involved in an advisory capacity
when employees have concerns about the propriety of a transaction or seek guidance.
Certifcation and independent assurance
Certifcation and independent assurance are part of monitoring. An independent review can assure the
Board and management about the design and working of the anti-bribery programme, contribute to
the programme's improvement and help promote the reputation of the NFP for integrity. Certifcation or
assurance can also be valuable when seeking grants and donations as evidence of the quality of the
NFP's systems. Certifcation and assurance of anti-bribery programmes are in their early stages but NFP's
may wish to consider undertaking certifcation using emerging standards and procedures, such as the
British Standards nstitute's anti-bribery certifcation standard.
21

20. MoJ Guidance, Principle 6, Monitoring and Review: "The commercial organisation monitors and reviews procedures
designed to prevent bribery by persons associated with it and makes improvements where necessary.
21. BS 10500 Specifcation for an anti-bribery management system (ABMS), BS, 2011
27
A zero tolerance policy for bribery does not mean that an NFP will be free from bribery. ncidents may
occur and can range in severity from a small facilitation payment to large bribery used to win contracts.
NFPs should have in place procedures to manage and learn from incidents. A recent survey of 120
charities showed that just under half of respondents had a Major ncidence Response Plan for any
allegation of fraud and corruption but only 44% of these indicated that their plan was comprehensive.
22

ncidents can be brought to light in many ways. These can include self-assessment, internal audits
and external assurance, allegations received through the whistleblowing channel, comments made by
employees and third parties such as media, fellow NFPs, associates or members of the public. The
reports may vary in substance from vague allegations to charges supported by substantial documented
evidence.
The NFP depending on its exposure to bribery should design procedures to respond to an incident should
it occur. The procedures should cover the following aspects:
Notifcation to senior management and the Board
Appointment of a manager to handle the incident response
An internal and external communication plan which can be adjusted according to the severity of the
incident
mmediate and thorough investigation initiated as soon as the allegation or incident is found or
notifed delay can result in loss of evidence, aggravation of an offence, uncertainty among
employees and exposure to adverse media comment
Consultation with legal advisers to decide if an allegation is of suffcient weight and credibility to merit
self-reporting
23
to the UK authorities and if relevant, to authorities in other jurisdictions such as the
US Department of Justice then, if judged to be required, report the incident
Documentation of the investigation
Application of appropriate sanctions
Using the experiences to improve the anti-bribery programme and develop case histories for use
in training
A critical decision for the NFP when becoming aware of an allegation of bribery is to decide whether to
self-report to the authorities. Legal advice should be sought on this, and charities can also refer to the
Charity Commission guidance which notes that serious incidents should always be immediately reported
to the Charity Commission.
24

The concern for the NFP is whether the incident has substance or is a vague allegation, and whether it
involves a material bribe. n this context, the regulatory or investigating authorities may act in relation to
violations of other UK laws, such as the Proceeds of Crime Act or money laundering legislation, or report
the incident to overseas jurisdictions laws.
3. MANAGNG AND REPORTNG
AN NCDENT
A zero
tolerance
policy for
bribery
does not
mean that
an NFP
will be free
from
bribery.
Incidents
may occur
and can
range in
severity
from a
small
facilitation
payment
to large
bribery
used to win
contracts.
NFPs
should
have in
place
procedures
to manage
and learn
from
incidents
SIGNPOST
f an NFP fnds a credible allegation of bribery then, subject to the nature of the incident and legal
advice, it should self-report to the relevant authorities. Failure to do so, with subsequent discovery
by regulatory or enforcement authorities of the incident, could lead to a hostile prosecution with
more severe penalties than if convicted following self-reporting.
22. Managing charities Risks and opportunities: a leadership survey, Baker Tilly, Winter 2011/2012
23. Employees and others may also be obliged to report under money laundering regulations.
24. http://www.charitycommission.gov.uk/running-a-charity/your-charitys-work/protecting-your-charity/reporting-serious-
incidents/
28
APPENDX 1: CHECKLST
1

2


3

4

5

6

7


8




9


10
There is a public policy of zero tolerance
of bribery
The policy of zero tolerance of bribery has
been formally approved by the Board of
Trustees or equivalent body
The NFP has a defnition of what it means
by bribery
The Board commits to and oversee the
implementation of the programme
The Board oversees implementation of the
programme
The NFP commits to being compliant with
all relevant anti-bribery laws
The programme is designed and
maintained based on regular assessment
of the NFP's particular risks of bribery
The programme is designed and
implemented with anti-bribery policies
and procedures that are effective and
proportionate to the NFP's particular risks,
circumstances and culture
An equivalent programme is required
of associates such as agents and other
intermediaries, contractors and suppliers
The NFP commits to anti-corruption
voluntary initiatives such as the Global
Compact
Ind.
No.
Indicator Commitment
y/n?
Commitment
in pIan? y/n
Comment
ref no:
Evidence
ref no:
MONITORING
29
11

12



13

14




15




16




17


18
Facilitation payments are prohibited and
procedures implemented to prevent them
There are policies and procedures for
gifts, hospitality and expenses to ensure
they are not used as subterfuges for
bribery
There are policies and procedures for
managing conficts of interest
f the NFP is investing in a major venture
in a country prone to corruption it, it carries
out due diligence on its partners and
monitors the venture to ensure bribery risk
is countered
f the NFP is engaged in activities involving
a sector prone to bribery risk such as
construction or logistics, it assesses
the risks and implements proportionate
measures to counter the risks
f the NFP develops and owns signifcant
intellectual property, it assesses the risk
of bribery being used to enable theft of
the intellectual property and implements
measures to counter the risk
Procurement functions are reviewed for
risk and proportionate anti-bribery controls
implemented
f the NFP is reliant on agents or joint
ventures operating in countries prone to
corruption it assesses the risks of bribery
and implements measures to counter the
risks
Ind.
No.
Indicator PoIicy
y/n?
Procedure
y/n
Comment
ref no:
PoIicy or
procedure
in pIan?
Evidence
ref no:
COUNTERING SPECIFIC RISKS
30
19

20


21

22



23

24





25


26

27

28

29

30


31



32

33

34


35
The programme is implemented consistently
throughout the NFP's organisation
Reasonable and proportionate due diligence is
carried out on business partners including agents
and other intermediaries, suppliers and contractors
Associates are required contractually not to
engage in bribery
f commercial activities involve contacts with
Foreign Public Offcials, the NFP implements
measures to ensure compliance with the UK
Bribery Act 2010
The NFP takes part in collective action to develop
and implement anti-corruption approaches
Continuing appropriate training is carried out
covering all trustees, managers, employees and
volunteers so that they clearly understand the
NFP's programme, know the NFP's expectations
and the sanctions procedure in the event of a
violation
Tailored training is provided to key high
risk associates including agents and other
intermediaries, contractors and suppliers
Human Resources policies and procedures for
trustees and employees align to the programme
The programme is communicated in an accessible
way to employees, volunteers and associates
The NFP reports publicly on the design and
effectiveness of its programme
Guidance on the programme is provided in an
accessible way to employees and volunteers
Channels are provided for employees and
volunteers to seek advice on the programme such
as access to managers and a hotline
Secure and accessible whistleblowing channels
are implemented through which employees and
others can raise concerns ('whistleblowing)
without risk of reprisal
There is a system of internal controls to counter
bribery
There is appropriate separation of duties for
fnancial transactions
Accurate books and records are maintained and
are available for inspection that properly and fairly
document all fnancial transactions
The programme is fully documented including
policies and procedures and their implementation
and relationships with associates
Ind.
No.
Indicator
IMPLEMENTATION
PoIicy
y/n?
Procedure
y/n
Comment
ref no:
PoIicy or
procedure
in pIan?
Evidence
ref no:
31
36


37



38


39



40
The NFP monitors the implementation
and effectiveness of the anti-bribery
programme
The internal control systems, in particular
the accounting and record keeping
practices, are subjected to regular review
and audit
The programme is updated and improved
regularly to refect the results of reviews
and risk assessments
The results of monitoring are reviewed
regularly by the Board of Trustees which
guides improvements to the programme
as necessary.
Certifcation or external independent
review is undertaken as appropriate.
Ind.
No.
Indicator
MONITORING
PoIicy
y/n?
Procedure
y/n
Comment
ref no:
PoIicy or
procedure
in pIan?
Evidence
ref no:
32
APPENDX 2: QUCK-START GUDANCE
Operations in countries known to have high levels of corruption
Activities based in the UK but involving overseas contacts such as recruitment of foreign students or receipt of
exhibitions or artworks from abroad
Using overseas intermediaries such as agents or joint ventures
Dealing with Foreign Public Offcials
Bidding for public projects in countries known to have high levels of corruption
Operations in countries where payment arrangements are diffcult or the banking system does not work
Depending on critical licenses in countries known to have high levels of corruption
Engaging in substantial construction projects whether in the UK or overseas
Overseas logistics are important to operations
Substantial procurement
Receiving payments originating from overseas such as student fees or donations
Donations with 'strings attached'
Board members or employees travelling to countries known to have high levels of corruption
Operations in or travelling to countries where the conventional banking system is unavailable and/or organised
crime or terrorist networks are a prominent threat
Owning intellectual property of high commercial value
Granting admissions or awarding qualifcations
Awarding of honours and benefts such as honorary titles or privileged access
Substantial assets such as investments, a foundation or endowment
nvolved in the receipt or giving of hospitality and gifts
Does this appIy to your organisation? Yes/No
STEP 1: Start here - assess your risks and decide whether to foIIow the
'quick-start' approach
Many NFPs, such as those operating only in the UK with no overseas contacts, will have low risk of bribery. Even
so they should make sure they are fully aware of the provisions of the UK Bribery Act and consider implementing a
simple anti-bribery programme.
Use the Risk Check below to see if your NFP is likely to be low risk. This simple checklist is designed to allow your
NFP to judge whether it is likely to encounter some of the main types of bribery risk.
f your NFP can answer yes to any of the risks, it will need to consider how to refect these risks in its anti-bribery
programme. f your NFP does not appear to be exposed to any of the risks listed in the Risk Check then it is likely to
be lower risk.
This list is indicative only. An NFP without a 'yes' to any of the indicators should not conclude that it is immune from
the risk of bribery.
Even if your NFP judges that it has lower risk, it should implement a basic anti-bribery programme and in all cases
have a 'zero tolerance' policy in place.
RISK CHECK
33
STEP 2: Commit to zero toIerance of bribery and decide whether to impIement a simpIe anti-bribery programme
PrincipIe: Top-IeveI commitment.
The Board of Trustees or equivalent governance body commits to and oversees the zero tolerance policy and anti-
bribery programme, demonstrating visible and active commitment to the implementation of the programme.
Agreeing a zero-tolerance policy: All NFPs, irrespective of how they rate their risks, should have a policy of zero
tolerance of bribery. The Board or equivalent body should formally agree this policy. t should also consider whether
to implement an anti-bribery programme which will be proportionate in scope and depth to the assessed level of
risk. The Board should discuss why it is important to have a policy and to implement a programme even if the risks
of bribery are likely to be low. The statutory responsibilities and legal risks should be reviewed. The discussion and
decisions should be documented and the commitment made public. The Board should make clear that it is frmly
behind the anti-bribery commitment in its communications and statements.
STEP 3: ImpIementing a simpIe anti-bribery programme for Iow-risk NFPs
PrincipIe: Risk assessment
The organisation undertakes a regular bribery risk assessment that underpins its anti-bribery programme.
Understanding your risks: Make sure you understand what bribery is and the various forms it can take. This will
avoid the risk of overlooking an area of bribery risk. Many NFPs will consider that bribery risk is unlikely given the
nature of their particular operations, especially if they operate only in the UK. Even so, bribery can always be a
risk, for example in the purchasing function or when the organisation manages intellectual property of high
commercial value.
Undertaking a risk assessment: Risk assessment can involve a simple approach. For example, identifying risk can
consist of a simple discussion by the Board and management based on the experience of the NFP, brainstorming
areas that might cause risk of bribery and then deciding if they are signifcant. Document the review by listing the
risks, rating them with a traffc light system, and noting what mitigating procedures are or should be in place.
PrincipIe: Effective anti-bribery poIicies and procedures
The organisation designs and implements anti-bribery policies and procedures that are effective and proportionate to the
organisation's risks, circumstances and culture.
Designing your anti-bribery programme: Whatever your NFP's size or however low its perceived risk from bribery,
you can follow the process suggested in this Guidance. Quite apart from the provisions required by the Bribery Act,
it is sound organisational practice to address bribery risk. This Guidance recognises that low risk NFPs will not need
to invest the same effort or resources as NFPs with higher risk. Develop an anti-bribery programme that is suitable
for you as a low-risk NFP. An anti-bribery programme is effectively a set of policies and procedures for each of your
key risk areas, together with a top-level commitment and a process to communicate the policies and review their
implementation.
Implementing your anti-bribery programme: Appoint a person to lead the design of any detailed policies and
procedures your NFP has identifed as necessary. Agree what to do to minimise the risks from bribery for your NFP.
This will give the scope of your programme. Write any detailed procedures that are needed such as for gifts and
hospitality, purchasing controls, relationships with partners including checks and due diligence, sanctions. Test these
on your Board and employees.
Example - Gifts & hospitality: Make sure your NFP has policies and procedures for gifts and hospitality. These
activities can occur for any NFP, and there can be risk of inappropriate activity. t is important that your employees
and volunteers know the policies and how to handle situations where they may occur. Undue gifts or hospitality
offered at the same time as discussion of a contract or grant could be considered bribery.
34
PrincipIe: Due-diIigence and procedures for third parties
The organisation carries out reasonable and proportionate due diligence on potential associates before entering into
contracts with third parties, and puts in place procedures for managing the associated risks on an on-going basis.
Carrying out due diligence on associates and intermediaries: Make sure potential associates are bona fde by
simple checks such as references and web searches. Require payments to be made through banks. Proposals
that payments or fees should be made in cash will be a red fag. Repeat due diligence periodically on associates
to make sure they remain in compliance with your programme.risk NFPs will not need to invest the same effort or
resources as NFPs with higher risk. Develop an anti-bribery programme that is suitable for you as a low-risk NFP. An
anti-bribery programme is effectively a set of policies and procedures for each of your key risk areas, together with a
top-level commitment and a process to communicate the policies and review their implementation.
PrincipIe: Communication and training
The organisation builds awareness and understanding of its anti-bribery programme among its Board, employees,
volunteers and relevant stakeholders through communication and appropriate training. t reports publicly on its anti-
bribery measures.
Internal communication: Appoint a person with responsibility for the programme. Communicate the programme
to your people and include it in induction of recruits, regular training and employee terms of employment. nclude
a statement of your policy of zero tolerance of bribery in your employee contract. Provide Board, employees and
volunteers with written details of the programme, and include reminders in relevant internal communications. Ensure
procedures are implemented fully in purchasing or managing intellectual property.
Training: NFPs with low risk may not wish to invest in developing anti-bribery training but can look to sector
associations to provide resources or work with other NFPs to provide joint training. T provides a free training
module.
External communication: Refer to the policy and anti-bribery programme on your website and describe how it is
put into practice. ncorporate reference to the anti-bribery programme in your training. Refer to the anti-bribery
policy and programme in other external communications to show that measures are in place and carry out periodic
reviews. Although risks may be low, potential associates such as investors may want to know about the anti-bribery
measures.
Whistleblowing: f your NFP already has advice and whistleblowing channels then include provision for reporting
concerns about bribery. f such channels are not in place you could consider introducing them to your NFP as they
have wider value than just inquiries and concerns other than just those relating to bribery.
PrincipIe: Monitoring and evaIuation
The organisation monitors the implementation and effectiveness of its anti-bribery programme. The results of monitoring
are reviewed regularly by the Board and guide improvements to the programme as necessary.
Conducting monitoring and evaluation: Appoint a person to be responsible for ensuring periodic reviews to check
that the bribery risks remain low and that the existing anti-bribery programme is adequate. Look out for changes
in circumstances such as starting activities involving overseas countries. Document all reviews and make reports
periodically to the Board. Obtain an independent view if you can or benchmark peer NFPs to check that your
approach is appropriate and working.
35
APPENDX 3: RESOURCES
RISK ASSESSMENT
Diagnosing Bribery Risk, Transparency nternational UK, London, 2013
http://www.transparency.org.uk/our-work/publications
Charities and risk management: a guide for trustees, Charity Commission, 2010
http://www.charity-commission.gov.uk/Publications/cc26.aspx
OECD Risk Awareness Tool for Multinational Enterprises in Weak Governance Zones, OECD,
2006
http://www.oecd.org/daf/inv/mne/weakgovernancezones-riskawarenesstoolformultinationalenterpr
ises-oecd.htm
ANTI-BRIBERY PROGRAMMES
Business Principles for Countering Bribery, Transparency nternational
http://www.transparency.org/whatwedo/tools/business_principles_for_countering_bribery
Business Principles for Countering Bribery, Small and Medium Enterprise (SME Edition),
Transparency nternational, 2008
http://www.transparency.org/whatwedo/tools/business_principles_for_countering_bribery_sme_
edition
The Bribery Act: Guidance about procedures which relevant commercial organisations can put
into place to prevent persons associated with them from bribing, UK Ministry of Justice, 2010
http://www.justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pdf
A Resource Guide to the U.S. Foreign Corrupt Practices Act, The Criminal Division of the U.S.
Department of Justice and the Enforcement Division of the U.S. Securities and Exchange
Commission
http://www.sec.gov/spotlight/fcpa/fcpa-resource-guide.pdf
Good Practice Guidance on Internal Controls, Ethics, and Compliance, OECD 2010
http://www.oecd.org/investment/anti-bribery/anti-briberyconvention/44884389.pdf
Compliance Toolkit, Protecting Charities from Harm, Charity Commission,
http://www.charitycommission.gov.uk/detailed-guidance/protecting-your-charity/protecting-
charities-from-harm-compliance-toolkit/
DUE DILIGENCE
Anti-bribery due diligence for transactions, Transparency nternational UK, 2012
http://www.transparency.org.uk/our-work/publications/10-publications/227-anti-bribery-due-
diligence-for-transactions
ASSOCIATES
Anti-corruption clause, nternational Chamber of Commerce, 2012
http://www.iccwbo.org/Advocacy-Codes-and-Rules/Document-centre/2012/CC-Anti-corruption-
Clause/
Supplier workbook, Supplier Ethical Data Exchange (Sedex), 2013
http://www.sedexglobal.com/resources/supplier-workbook/
TRAINING
Doing Business without Bribery, Transparency nternational UK, 2012
http://www.doingbusinesswithoutbribery.com/
http://www.transparency.org.uk/our-work/publications/94-ti-uk-doing-business-without-bribery-
trainers-handbook
36
RESIST: resisting extortion and solicitation in international transactions. A company tool for
employee training, Transparency nternational and others, 2012
http://www.transparency.org/whatwedo/pub/resist_resisting_extortion_and_solicitation_in_
international_transactions
COLLECTIVE ACTION
Fighting Corruption through Collective Action: A guide for business, World Bank nstitute and
others, 2008
http://info.worldbank.org/etools/docs/antic/Whole_guide_Oct.pdf
SELF REPORTING
Compliance Toolkit, Chapter 3 Fraud and fnancial crime, Section H, p43, Charity Commission
http://www.charitycommission.gov.uk/our_regulatory_activity/counter_terrorism_work/compliance_
toolkit_index_3.aspx
Reporting Serious Incidents Charity Commission Guidance
http://www.charitycommission.gov.uk/running-a-charity/your-charitys-work/protecting-your-charity/
reporting-serious-incidents/
FCPA Compliance Guidance 2012, Self-Reporting, Cooperation, and Remedial Efforts, p 54, US
Department of Justice and Stock Exchange Commission, 2011
http://www.sec.gov/spotlight/fcpa/fcpa-resource-guide.pdf.
WHISTLEBLOWING
Whistleblowing Arrangements Code of Practice, PAS1998/2008, BS, drafted by Public Concern
at Work
http://www.pcaw.org.uk/bsi
International Chamber of Commerce Guidelines on Whistleblowing
http://www.iccwbo.org/Advocacy-Codes-and-Rules/Document-centre/2008/CC-Guidelines-on-
Whistleblowing/
CERTIFICATION AND ASSURANCE
BSI 10500 Specifcation for an anti-bribery management system (ABMS), BS, 2011 http://shop.
bsigroup.com/ProductDetail/?pid=000000000030238856
Assurance Framework for Corporate Anti-bribery Programmes, Transparency nternational, 2012
http://www.transparency.org/whatwedo/pub/assurance_framework_for_corporate_anti_bribery_
programmes
PUBLIC REPORTING
NGO Sector Supplement, Global Reporting nitiative
https://www.globalreporting.org/reporting/sector-guidance/ngo/Pages/default.aspx
Global Compact-Transparency International Reporting Guidance on the 10th Principle against
Corruption
http://www.unglobalcompact.org/docs/issues_doc/Anti-Corruption/UNGC_
AntiCorruptionReporting.pdf
Transparency International UK
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London SE1 0EH
Tel: 020 7922 7906
Fax: 020 7922 7907
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