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Gleeds

Anti-Bribery and Corruption

Richard Burger
18 & 19 July 2011

Introduction
Understanding the Bribery Act 2010

Gleeds response to the Act


Anti-Bribery & Corruption policies and procedures Practical guidance

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Why do we need the Bribery Act 2010?


$1 Trillion is paid in bribes each year Corruption adds to the cost of doing business International pressure on the UK to bring laws up to date

Measures to tackle corruption announced at the G8 Summit in 2006

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Where does the UK sit in terms of anticorruption? Transparency International Corruption Perceptions Index

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New offences under the Bribery Act 2010


Active briber Passive briber Offence of bribing a foreign public official

Corporate offence

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What is Bribery?
An inducement or reward offered, promised or provided in order to gain any commercial advantage Subversion of the relationship between principal and agent So that the agent is induced to act contrary to the duties he/she owes to the principal Agent relationships: employer/employee

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Section 1 the active briber


A financial or other advantage given or offered to a person Either as an inducement to breach a duty that person owes to another Or as a reward for having breached a duty in the past

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Section 2 the passive briber


A financial or other advantage requested, received or accepted by a person To perform a relevant function or activity improperly

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Section 3 the type of function


The function or activity must be:

Any function of a public nature


Any activity connected with a business Any activity performed in the course of a persons employment Any activity performed by or on behalf of a body or person

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Section 4 the type of duty


To act in good faith

To act impartially
To act in accordance with a duty of trust

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The Law Commission Reforming Bribery


The difficulty is that most commercial enterprises are constantly trying to bring in business in a variety of ways all of which involve influencing those agents of other firms whose job it is to decide where their firms business should go. Our task is to structure the law of bribery such that there is adequate space for commercial enterprises, without fear of legal sanctions, to pursue their goals with determination and imagination.

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The new corporate offence


Failure of a commercial organisation to prevent bribery

Person associated with company bribes another


To obtain or retain business or an advantage for the company

BUT a defence for the company to show that it had adequate procedures to prevent bribery

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Associated Persons wide definition


Directors and employees Contractors Consultants

Agents
Subsidiaries Joint venture partners

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Defence adequate procedures


Defence for commercial organisation to prove that it had in place adequate procedures designed to prevent associated persons from undertaking bribery General guidance issued by the Government for UK business to follow and implement proportionate systems and controls

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Gleeds adequate procedures


Risk Assessment of the potential bribery risk facing the business Full engagement at Board level Statement from senior management

Anti-corruption and bribery policy


Expenditure Control Sheet Staff training Annual auditing
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Potential bribery risks facing Gleeds


Countries where corruption is perceived to be a higher risk Interaction with public officials in high risk jurisdictions Sector risks Use of third party agents

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Cost of getting it wrong


Criminal sanctions: unlimited fine for commercial organisation several millions Serious Fraud Office civil recovery powers Prosecution and Defence costs (NOT a criminal case but and example of significant legal costs: FSA v Aon fine 5.25M plus legal costs est. 5M to 10M) Possible debarment from public contract tendering Massive reputational damage

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Hospitality and promotional expenditures


The Act will not outlaw promotional expenditure However, lavish hospitality would amount to a bribe. Sensible and proportionate expenditure is entirely legitimate most routine and inexpensive hospitality would be unlikely to lead to a reasonable expectation of improper conduct - SFO

Follow guidance on Expenditure Authorisation in the Anti-bribery and Corruption Policy


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Facilitation payments
What is a facilitation payment?

A small facilitation payment is a bribe and unlawful


Very limited circumstances when a payment may be made

Always consult with the line manager or Compliance Officer Ken Reid

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Use of agents
The Bribery Act 2010 applies to agents

Due Diligence
Training for overseas agents and consultants Clear messages from the business Agents should consult with the business if asked to pay a bribe and/or are offered a bribe Possible change in culture

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Differences between Foreign Corrupt Practices Act 1977 and the Bribery Act 2010
Differences
Application

F.C.P.A
Only Foreign Officials

Bribery Act
Private and Public

Extent of Criminal Liability

Active Briber

Both Active and Passive Briber

Corporate Offence

No

Yes

Facilitation Payments

Limited Circumstances

No!

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Anti-Corruption and Bribery policy


Your responsibilities follow the policy Your liabilities possible criminal sanctions Unacceptable behaviour examples

Record keeping expense claims


How to raise a concern Do not tip off the active/passive briber that you have made a report Protections and support for you
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Red flags
Intelligence of alleged bribery

Requests for payments


Facilitation payments Demands for lavish entertainment Use of side letters Invoicing and payment to an unrelated party Unusual gifts

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Q&A

1 February 2011

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