The Bribery Act 2010 at Christmas

The Bribery Act 2010 (“the Bribery Act”) became UK law on 1 July 2011. The Act contains two general offences of the giving/promising of a bribe and the receiving/requesting of a bribe (sections 1 and 2 respectively); and two further commercial offences of bribery of a foreign public official and failing to prevent bribery on behalf of a commercial organisation (sections 7 and 6 respectively). A business will be liable under section 7 if one of its employees or agents commits bribery on its behalf, even if it has no knowledge of the conduct.

In the upcoming festive season many businesses will be giving and receiving gifts and hospitality to and from clients and suppliers. In the absence of careful consideration, this could trigger an offence under either section 1 or 2 of the Act for the individuals concerned, and also under section 7 for the employer (or the business of which the individual is an ‘associated person’ – eg. in agency scenarios). The penalties are potentially huge, including unlimited fines and 10 year prison sentences.

In light of the above, Royal Mail have recently issued guidance to its workers proscribing £30 as the maximum value allowed to be accepted as Christmas tips by post workers. This poses the question – when can a Christmas gift constitute bribery?

Guidance issued by the Government highlights the importance of proportionality when giving and receiving corporate hospitality and gifts. The offence of bribing another person, or receiving a bribe, is such where the giving of the ‘gift’ is intended to bring about the improper performance of a relevant function of the receiver. ‘Improper performance’ means performance which breaches an expectation that the receiver will act in good faith and impartially. The test is what a reasonable person would expect in relation to the performance of that function or activity. Any gift should be proportionate in the circumstances; for example giving an extravagant gift to a new contact just before submitting a tender to their business would likely be inappropriate, however giving a bottle of wine to a long-standing business contact is highly unlikely to constitute bribery.

When assessing gifts where bribery is alleged the authorities would look at the value, the way in which it was provided and the level of influence that the receiver of the gift has on the business decision in question.

Therefore it is unlikely that the usual small token gifts often exchanged by businesses at Christmas would trigger an offence under the Bribery Act, although, if an individual or a business feels it necessary to hide or cover up the giving of any gift or hospitality then this would infer questionable status of the gift.

Some guidance for businesses when taking part in the giving and receiving of Christmas gifts in particular may be:

• Ensure transparency in procedures relating to the giving and receiving of gifts and make these clear to all staff and agents.
• Keep a record of gifts given and received to promote transparency.
• Make it clear that any gifts or hospitality should reflect the desire to cement good relations or improve the business image and NOT give the impression to the recipient that they are under any obligation to confer any business advantage.
• Ensure that any gift is appropriate in all the circumstances. Consider the ‘reasonable person’ test.

Where the commercial offence under section 7 is concerned, there is a full defence under the Bribery Act if the business in question had ‘adequate procedures’ in place to prevent bribery. Adequate procedures will be procedures that are proportionate to the business in the circumstances, taking into account the risk of bribery in that particular business or industry. It is therefore important for businesses to ensure that they have formally assessed the risk of bribery and put in place sufficient clear and transparent procedures, and of course ensured that these are communicated to all staff and agents (as Royal Mail have done).

Notably, no prosecution can be made under the Bribery Act in England and Wales unless either the Director of Public Prosecutions or the Director of the Serious Fraud Office is personally satisfied that the prosecution would be in the public’s interest and that a conviction would be more likely than not. The Bribery Act is not intended to prohibit reasonable hospitality and gifts and it is unlikely that a business or individual would unwittingly be caught out.

Stephanie Round
Paralegal
SRound@LawBlacks.com

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