Bribery Act 2010: Supplier Audits Benchmarking

Fulcrium offers a range of supplier audit and compliance services that help clients to proactively manage, and respond to, their supplier bribery and corruption risks. We also help design control frameworks to ensure due diligence is performed over third party firms to mitigate undue risk.

Bribery Act 2010: Supplier Audits’ Benchmarking.

Fulcrium offers a range of supplier audit and compliance services that help clients to proactively manage, and respond to, their supplier bribery and corruption risks. We also help design control frameworks to ensure due diligence is performed over third party firms to mitigate undue risk.

If you want expert anti-bribery and corruption supplier / supply chain compliance audits then Contact Us today.

Overview.

The UK Bribery Act 2010 came into force on 1 July 2011 to address the requirements of the 1997 OECD anti-bribery Convention,and is regarded as setting the global standard for anti-bribery and anti-corruption legislation alongside the US Foreign Corrupt Practices Act (FCPA). However, the Act differs in several respects from the FCPA and compliance with the ECPA does not constitute compliance under the Act.

The Bribery Act created four prime offences:

A new corporate criminal offence of failing to prevent a bribe from being offered, given or received on its behalf. This applies to any relevant commercial organisation defined as a body incorporated under the law of the United Kingdom (or United Kingdom registered partnership) and any overseas entity that carries on a business or part of a business in the United Kingdom. In addition, it applies to suppliers and other third parties working for the company - one of the main differentiators from the ECPA.

Clients refer to Fulcrium as their “highly valuable secret intelligence resource.”

Consequences.

The first successful prosecution under the Bribery Act was of Standard Bank in November 2015 which required the bank to pay financial orders of $25.2 million, to pay the Government of Tanzania $7 million and to pay the Serious Fraud Office’s costs of £330,000.

These financial penalties have since been dramatically exceeded: in 2017 two companies in the Rolls-Royce group agreed to pay penalties of approximately £652 million as a result of 12 counts of bribery, corruption and fraud dating back to 1989 in the United States, Brazil, India, Russia, Nigeria and Indonesia. https://www.bevanbrittan.com/insights/articles/2017/rolls-royce-to-pay-652-million-for-bribery-and-corruption-offences/

Defence.

If faced with an allegation of wrong-doing under the Bribery Act, the only defence a firm can point to is that it developed adequate procedures to prevent this taking place.The six principles covered by the UK Ministry of Justice guidance on these adequate procedures are, in summary:

1. Proportionate procedures

Bribery prevention procedures should be:

2. Top-level commitment

Top-level management should:

3. Risk assessment

The risk assessment should:

4. Due diligence

Due diligence should be:

5. Communication

Communication and training:

6. Monitoring and review

Regular monitoring and review should:

Key Internal Risk Areas.

Bribery can be a risk in many areas of the firm. Below are the key areas you should be aware of in particular:

Actions by third parties for which the firm may be held responsible:
can include a range of people i.e. agents, contractors and consultants, acting on the firm’s behalf. Appropriate due diligence should be undertaken before a third party is engaged. Third parties should only be engaged where there is a clear business rationale for doing so, with an appropriate contract. Any payments to third parties should be properly authorised and recorded.

Key Supplier and Supply Chain Risk Areas.

If you have framework agreements in place with large suppliers, your key risks are:

Active and Passive Bribery
Risks when interacting with domestic and foreign public officials
Bribery in the Supply Chain through employees, agents or subsidiaries
Assurance of the Adequacy of Companies’ Internal Procedures in preventing bribery
Money Laundering
Fraud
Overcharging
Not performing up to documented standards

The Need for Benchmarking.

Most of our clients have in place a comprehensive compliance procedure and high quality anti-bribery and corruption training for their employees. Where they are more vulnerable under the Bribery Act is in not:

With unlimited fines and custodial sentences, the Bribery Act certainly has teeth. But there is no need to fear that there are gaps or cracks in your anti-bribery and anti-corruption programmes.

Fulcrium’s unique proprietary benchmarking database enables us to measure and compare the performance of anti-bribery and anti-corruption programmes against best practices in your own company, in peer companies, and across many geographies.

For evidence to prove your company is watertight on the UK Bribery Act, contact us today.

Bribery Act 2010: Supplier Audits Benchmarking

Fulcrium offers a range of supplier audit and compliance services that help clients to proactively manage, and respond to, their supplier bribery and corruption risks. We also help design control frameworks to ensure due diligence is performed over third party firms to mitigate undue risk.