Wake-up call: Is it lawful to accept gifts from suppliers?
PROBLEM I am the manager of a large restaurant. Our drinks supplier has invited me to take a free holiday in his Caribbean holiday home. I realise that this is because our current contract is due to expire in a few months and he wants me to renew it without going through a formal tender process. Is it lawful for me to accept his offer?
LAW The current laws on bribery and anti-corruption are contained in various pieces of legislation but a new act, known as the Bribery Act 2010, is due to come into force shortly.
An exact implementation date is yet to be set but it was anticipated to be April 2011 - although the Government is currently reviewing this. If implemented it will result in an extension in the scope of this area of law.
This article focuses on the effects of the new act. Under the Bribery Act 2010, there will be various offences, including:
â- Being bribed.
â- Bribing a foreign public official.
â- Failure of a commercial organisation to prevent bribery - as well as an offence of consent and connivance by a senior officer.
Although there is no express definition of "bribery", it is clear from the act that bribery occurs where an advantage is given in exchange for improper decision-making or action.
EXPERT ADVICE In your situation, there are a number of potential offences under the new act:
â- If you accept the Caribbean holiday, both you and the restaurant are potentially committing the offence of being bribed as you are accepting the holiday with the intention that you will forgo your usual procurement process.
â- Your drinks supplier and his company are committing the offence of bribing another as he is offering you the stay at his holiday home as an inducement for bypassing your usual tendering process.
â- The restaurant that you work at may have committed the offence of failing to prevent bribery, unless it can show that it had adequate procedures in place to prevent bribery. Also, any senior officers of the restaurant - such as directors and managers - who consent to or connive in the bribe, may have personal liability. This would potentially include you.
CHECK LIST A bribe occurs under the Bribery Act 2010 where a person offers, promises or gives a financial or other advantage to another person in order to gain a reward.
Both individuals in their own capacity and corporate bodies can be liable for the offences of active bribery, passive bribery and bribing a foreign public official.
The Bribery Act 2010 does not mean that all corporate hospitality will be classified as an illegal bribe. Draft guidelines have made it clear that routine and inexpensive hospitality that is reasonable and proportionate is unlikely to fall foul of the act as, practically speaking, it is unlikely to impact on the decision-making.
A commercial organisation may be able to avoid liability for failing to prevent bribery if it is able to show that it had adequate procedures in place to prevent bribery.
It remains to be seen exactly what organisations must do to show that they have "adequate procedures" in place. However, draft guidance has suggested that it will involve risk assessments, top-level commitment, due diligence, clear, practical and accessible policies and procedures, effective implementation as well as monitoring and review.
BEWARE If you fall foul of the new act, there are tough criminal sanctions. An individual can be sentenced to up to 10 years imprisonment and/or receive an unlimited fine. A body corporate can be punished with an unlimited fine.
Additionally, there may be civil penalties, including recovery of the proceeds of the crime. Also, directors may face disqualification proceedings, effectively banning them from holding any future office as a director. Companies can also be permanently disbarred from tendering for government contracts.
CONTACT
Katee Dias, Goodman Derrick LLP
kdias@gdlaw.co.uk
