The business advantage linkage
The Guidance points out (as is set out in the Bribery Act itself) that a section 7 offence will only arise if the payer of the bribe intended to obtain or retain business or an advantage in the conduct of business for the organisation. The relevant intention here is of the associated person. The fact that an organisation may benefit indirectly from a bribe through an investment or through receipt of dividends from a subsidiary, will be unlikely (in itself) to amount to proof of the specific intention required for the offence. A bribe on behalf of a subsidiary by one of its employees will not automatically involve liability for the parent company or the other subsidiaries of the parent company.
Facilitation payments remain illegal under the Bribery Act as under previous UK law and there has been no change to the zero-tolerance position under the Bribery Act. The Guidance notes the long-term objective of the Government to eradicate such payments from business transactions. The Guidance suggests a number of set procedures to deal with the issue of facilitation payments which are set out in one of the Guidance case studies.
In circumstances where a failure to make a payment may be a matter of life, limb or liberty, the Guidance recognises that the common law defence of duress is likely to be available to defend any bribery charge. The Guidance makes reference to the joint prosecution guidance issued by the Director of the Serious Fraud Office and the Director of Public Prosecutions which considers the approach of the departments to prosecution in relation to such payments. Importantly this document highlights the public interest framework in any decision on bringing prosecutions. It also makes the significant statement that the Bribery Act "is not intended to penalise ethically run companies that encounter an isolated incident of bribery”.
The Champagne Can Still Flow
There is much emphasis in the Guidance on reassuring the business community that bona fide reasonable and proportionate corporate hospitality and promotional or other business expenditure, intended to promote the image of a commercial organisation, cement good relations, or to market or present its products or services, is legitimate under the Act. The Guidance recognises that such expenditure plays an important role in commercial relations, both in the private and the public sectors. In relation to private corporate hospitality, such as an invitation for clients to a rugby international or to Grand Prix racing, the Guidance makes it clear that this is highly unlikely to be considered bribery unless the intention was to influence someone to perform his or her relevant function improperly. Proportionality is a key factor.
The Guidance covers public sector considerations when analysing bribery offences under section 6 of the Act (bribery of foreign public officials). With regard to gifts or hospitality given to foreign public officials, an offence would only be committed where it was intended that the advantage conferred on the official (or another person at his request) would influence him in his decision-making process. Generally, the greater and more lavish the hospitality or gift, the greater is the inference that it was intended to influence. However, the Guidance surprisingly endorses the concept of flights and hotels for officials if required for a genuine and justifiable business meet-up with executives from a commercial organisation, or for flights to a trip to distant mining installations in order to verify the organisation’s safety requirements which the Guidance also says will fall outside the scope of the Act. On the other hand a five-star holiday for a foreign public official, to a destination unrelated to the organisation’s activities, is more likely to give rise to the inference that the trip was intended to influence.
The Guidance tells us that the more lavish the hospitality or the higher the expenditure in relation to travel accommodation which is provided to a foreign public official then the greater the inference that it is intended to influence the official to grant business or a business advantage in return.
A strong message is given to companies in the business world to review their policies on hospitality and promotional expenditure as part of their anti-bribery procedures leaving it to corporates to decide what are reasonable and proportionate standards. Again, the theme is common sense not burdensome procedures.