Bribery

Bribery Bribery Act 2010 Financial Advantage Corruption Legal Compliance Business Ethics Corporate Governance
Under the Bribery Act 2010, bribery refers to the offering, giving, receiving, or soliciting of any 'financial or other advantage' to induce or reward the improper performance of a public function or business activity.
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Definition: Bribery is the crime of offering, giving, receiving, or soliciting something of value as a way to influence the actions of an individual holding a public or legal duty. Under the Bribery Act 2010, this includes any ‘financial or other advantage’ intended to induce ‘improper’ performance of any public role or business activity. Such actions are considered ‘improper’ if they breach a reasonable expectation of good faith, impartiality, or proper conduct by someone in a trusted position.

Examples:

  1. Corporate Bribery:

    • A commercial company offers lavish gifts to a government official to secure a valuable contract. Under the Bribery Act 2010, this would constitute bribery because it influences the official to act improperly.

  2. Bribery in International Business:

    • A business executive offers payments to foreign public officials to facilitate expeditions of contracts or permits. Such acts are considered bribery under both domestic laws and international anti-corruption conventions.

  3. Accepting Bribes:

    • A procurement officer accepts a bribe from a supplier to favor them in a tender process. This action breaches the reasonable expectation of impartiality and is an example of accepting bribes.

Frequently Asked Questions:

  1. What constitutes ‘improper performance’ under the Bribery Act 2010?

    • Improper performance occurs when a function, duty, or activity is performed inadequately or dishonestly, based on reasonable expectations of impartiality, good faith, or trust.

  2. Who is considered an ‘associated person’?

    • An ‘associated person’ could be an employee, agent, subsidiary, or any other entity performing services on behalf of the organization.

  3. Can a commercial organization be guilty of bribery if they have no direct knowledge of it?

    • Yes, under the Act, organizations can be liable if they fail to prevent bribery by associated persons unless they can demonstrate ‘adequate procedures’ to prevent such acts.

  4. What are ‘adequate procedures’ to prevent bribery?

    • Adequate procedures might include conducting risk assessments, implementing anti-bribery policies, providing training and communication, conducting due diligence, and monitoring and reviewing practices regularly.

  5. What are the penalties for violating the Bribery Act 2010?

    • Individuals can face up to 10 years of imprisonment and/or an unlimited fine. Organizations can also receive unlimited fines.

Related Terms:

  • Corruption:

    • Generally refers to dishonesty or fraudulent conduct by those in power, typically involving bribery.

  • Kickback:

    • A form of negotiated bribery where a commission is paid to the bribe-taker in return for services rendered.

  • Facilitation Payment:

    • Small payments made to expedite routine governmental actions. These are generally viewed as bribes under the Bribery Act 2010.

Online References:

Suggested Books for Further Studies:

  1. “Bribery and Corruption: How to Be an Impeccable Custodian of Your Company’s Reputation” by Michael V. Pocalyko
  2. “Corruption and the Global Economy” edited by Kimberly Ann Elliott
  3. “Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization” by Andrew Crane and Dirk Matten

Accounting Basics: “Bribery” Fundamentals Quiz

### Which act defines the current legal framework for bribery in the United Kingdom? - [ ] The Fraud Act 2006 - [x] The Bribery Act 2010 - [ ] The Corruption Act 1995 - [ ] The Economic Crime Act 2022 > **Explanation:** The Bribery Act 2010 is the primary piece of legislation governing bribery-related offenses in the UK. ### What is the maximum imprisonment term under the Bribery Act 2010? - [ ] 5 years - [x] 10 years - [ ] 15 years - [ ] 20 years > **Explanation:** The maximum penalty for bribery under the Bribery Act 2010 is 10 years’ imprisonment together with an unlimited fine. ### What might be considered 'adequate procedures' to prevent bribery? - [x] Risk assessments, anti-bribery policies, training, due diligence, and regular monitoring - [ ] Having a compliance officer on staff - [ ] A visible code of ethics only - [ ] Periodic team meetings > **Explanation:** Adequate procedures include a comprehensive approach of risk assessments, policies, training, due diligence, and regular monitoring to prevent bribery. ### What is a common form of bribery in international business? - [x] Offering payments to foreign public officials for contract facilitation - [ ] Giving charity donations - [ ] Organizing business lunches - [ ] Performing regular due diligence > **Explanation:** Offering payments to foreign public officials to expedite contracts or permits is a frequent occurrence and falls under the definition of bribery. ### Can organizations be penalized under the Bribery Act 2010 without direct knowledge of bribery? - [x] Yes, if they fail to prevent bribery by associated persons - [ ] No, they must have direct knowledge - [ ] Only if they instruct the bribery directly - [ ] It depends on the extent of the bribery > **Explanation:** Organizations can be held liable even without direct knowledge if they fail to prevent bribery unless they have 'adequate procedures' in place. ### What breaches a 'reasonable expectation of good faith or impartiality'? - [ ] Doing business transparently - [x] Engaging in dishonest or biased behavior - [ ] Declaring conflicts of interest - [ ] Avoiding all non-governmental transactions > **Explanation:** Engaging in dishonest or biased behavior breaches the expectation of good faith or impartiality, characterizing improper performance under the Bribery Act 2010. ### What would not be classified as bribery under the Bribery Act 2010? - [x] Charitable donations unrelated to influencing a decision - [ ] Offering expensive gifts to secure a contract - [ ] Cash payments to expedite standard procedures - [ ] Intentionally overpaying for services to gain future favor > **Explanation:** Charitable donations that do not aim to influence any decision or induce improper performance are not classified as bribery. ### Who must comply with the Bribery Act 2010? - [ ] Only UK-based companies - [x] All individuals and entities conducting business in the UK - [ ] Solely government officials - [ ] Non-profit organizations exclusively > **Explanation:** All individuals and entities conducting business in the UK, regardless of where they are based, must comply with the Bribery Act 2010. ### What is 'kickback' in terms of bribery? - [ ] A professional consultation fee - [ ] A donation to a charity - [ ] A gift for business achievements - [x] A negotiated bribe paid back in return for services rendered > **Explanation:** A 'kickback' refers to money or perks paid back as part of a secret agreement to return favors or profits from a deal. ### Under the Bribery Act 2010, for which types of actions can organizations be held liable? - [ ] Only for deliberate wrongful actions - [x] For failing to prevent bribery by associated persons - [ ] For accounting inaccuracies - [ ] For high-value transactions involving multiple currencies > **Explanation:** Organizations can be held liable if they fail to prevent bribery by associated persons, highlighting the importance of maintaining adequate anti-bribery policies and procedures.

Thank you for diving deeply into the comprehensive examination of bribery within the framework of international and UK law. Your continued efforts to understand and manage legal compliance and corporate governance are highly commendable!

Tuesday, August 6, 2024
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