New Guidance Released for Businesses Countering Small Bribes

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Posted in:Banking and Finance, Business Finance, Corporate and Commercial, Litigation|July 28, 2014 | Join the mailing list

Small bribes are seen to be one of the most difficult corruption problems for businesses to eliminate. Therefore, on 26 June 2014, Transparency International UK published guidance designed to help businesses counter such bribery.

A bribe may be given to obtain improper preferential treatment or to induce an employee to perform a function improperly. Small bribes can come in many forms to include cash, vouchers and benefits such as alcohol or tickets to sporting events.

The consequences of not addressing the challenge to counter bribery can be substantial. The company may face:

•    Legal risks (including criminal prosecution, settlement and investigation costs);

•    Reputational damage (including market and financing issues, loss of confidence by business partners, and increased vulnerability to bribe solicitation and demands); and

•    Operational impacts (including the cost to the business of paying small bribes, market distortion, entrenching a corrupt bureaucracy and putting employees at risk).

Accordingly, the guidance provides 10 recommendations for businesses to follow for countering small bribes:

1.    Provide a supporting corporate culture with integrity and responsibility;

2.    Commit to eliminating small bribes through a programme of internal controls and collaborative action;

3.    Identify and assess the risks of any small bribes within the company’s operations and the factors that caused them;

4.    Implement a programme of internal controls comprising of detailed policies and procedures to counter small bribes;

5.    Communicate with employees and provide training on how to anticipate and resist demands;

6.    Implement adequate procedures to ensure that third parties are not relying on small bribes;

7.    Modify and extend internal accounting controls in order to counter small bribes;

8.    Have a procedure in place to deal with any incidents where small bribes are detected. This may include investigation, disciplinary action and reporting to the relevant authority;

9.    Continue to monitor and review the effectiveness of the company’s procedures to counter small bribes; and

10.    Influence the operating environment through collaborative working in order to tackle a deep-rooted demand culture.

Small bribes corrode public confidence and business standards. It is important to remember that in aggregate, many small bribes amount to large-scale bribery.

Should you have any concerns regarding dealing with small bribes or business regulation generally please contact
Stephen Foster, Head of Corporate and Commercial at or by telephoning 0161 833 9211.
The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice should
be obtained before taking, or refraining from taking, any action as a result of this article.

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