The Serious Fraud Office toughens its stance on The Bribery Act

With construction identified as a high-risk industry and many engineering contracts being international, prosecution for a breach of the Bribery Act is a real risk.

Firms will need to be aware of the new guidance on facilitation payments, hospitality and corporate self-reporting introduced by the Serious Fraud Office.

A tougher approach

It has been suggested that the Serious Fraud Office wishes to make clear that it is an investigator and prosecutor, rather than a regulator.

As a result, a toughening of its position seems clear. For example, the Serious Fraud Office has now stated that “corporates cannot be seen to be allowed some special kid glove treatment”.

In line with this statement, the Serious Fraud Office has also stated that “there will be no presumption in favour of civil settlement in any circumstances” This makes prosecutions more likely.

Risky areas for your business

The previous Guidance on facilitation payments, (payments made to smooth the way for transactions), and on examples of legitimate hospitality has been removed.

Whilst the Serious Fraud Office recognises that bona fide hospitality is an established and important part of doing business, they point out that there is a risk of bribes being disguised as hospitality.

As a result, it will deem companies to be using hospitality to encourage or reward improper performance where it is lavish, it lacks a clear legitimate business connection or it is concealed.

How do you protect yourself?

It remains a defence to a charge of failure to prevent bribery for a business to show that it has adequate procedures in place to prevent bribery.

If you have not already done so, we recommend that you put in place appropriate procedures. Existing policies should also be reviewed in light of this change in stance.

Just as important is to ensure that all procedures are followed. For example, it would be wise to record all accepted hospitality, (possibly above set levels), rather than taking a more ad hoc approach. By doing that, matters should not be missed, which is important because unreported hospitality might now be treated as having been “concealed”.