It was recently reported that an admiral in the US Navy has pleaded guilty to lying to federal authorities investigating a multi-million dollar fraud scheme.
Rear Adm. Robert Gilbeau is reported to have admitted to having lied to US authorities investigating the suspected bribery of Navy officers by a Malaysian contractor, who is said to have provided gifts and dinners to the officers in exchange for classified information which he then used to overcharge the US Navy. The investigation is on-going and is said to be one of the worst to have hit the US navy in recent history.
The crime of bribery is one that has received a significant amount of attention on the global stage in recent years involving, amongst others, some of the worlds most decorated athletes and powerful organisations. At Lewis Nedas, we are routinely sought out by clients to provide pragmatic, tailored legal advice and representation to clients facing allegations of bribery. In this blog post, we review the UK’s legal framework for dealing with the offence of bribery and what needs to be done to guard against any allegation of being implicated in committing the offence.
How is the offence of ‘bribery’ legally defined?
The offence of bribery is governed by the Bribery Act 2010 (the “2010 Act”). Interestingly, the 2010 Act does not identify a single offence of bribery, but narrates a list of ‘general bribery offences’, including:
- Offences of bribing another person;
- Offences relating to being bribed;
- Bribery of foreign public officials.
The offence of bribery is quite sophisticated and can, at times, be difficult for regulatory and prosecuting authorities to identify. This is why the 2010 Act has been drafted to be so wide-ranging. Essentially, while the offences listed above are technically distinct, bribery (in one or another form) relates to the providing of a benefit – tangible or intangible – in order to persuade someone to do something other than what is legally expected of them in the circumstances. Examples include:
- A contractor bribing company (or public) officials with gifts or hospitality with a view to securing a piece of work or receiving preferential rates over their competitors (not unlike in the situation currently being investigated in the US);
- An individual or organisation making significant financial contributions to a political party or government with a view to influencing decision-making; and
- An individual or organisation providing financial benefit to a regulatory official to overlook any breaches of codes of practice or health and safety legislation.
An important point to note regarding the offence of Bribery under the 2010 Act is the fact that it criminalises both (i) the offering of a bribe; and (ii) the taking of a bribe. Furthermore, the Act penalises those individuals/ organisations that offer or accept a bribe and will also penalise those organisations that do not put sufficiently robust guards in place to avoid being implicated in the commission of the offence.
Does the 2010 Act only apply to individuals?
As mentioned above, commercial bodies together with individuals are governed by the 2010 Act – both are vulnerable to being charged with the offence of having committed bribery. This is particularly important for those organisations that operate on the international stage: senior employees who are directed to seek out new opportunities may unintentionally implicate your business in bribery. Many businesses operate in countries with a business culture that is different to that in the UK – this may involve the granting of hospitality, or the provision of gifts etc. However, the fact that another country allows a particular business practice which is different to that which would be accepted in the UK can give rise to legal issues. If an organisation has a base in the UK, and it operates internationally, its actions abroad could make it liable in the UK for having committed bribery. The point to appreciate is that, if a business’s activities internationally are deemed to be illegal under the terms of the 2010 Act, this can give rise to allegations of bribery (even if the local, cultural practice does not treat the activities as being illegal).
How can you avoid violating the 2010 Act?
The 2010 Act places responsibility with individuals and businesses to take active steps to avoid being implicated in the commission of bribery. In the case of individuals, they must do everything in their power to avoid becoming involved in any kind of activity which could, under UK legislation, be deemed to be bribery. This is also true of UK businesses. This can be particularly difficult for those businesses that are operating across national borders, where there may be a need to take a particular position in terms of placing their legal obligations above cultural niceties. Moreover, the 2010 Act also places an obligation on organisations to design and implement practices and procedures that reduce the likelihood of bribery taking place.
What happens if there are allegations of bribery?
The drafting of the 2010 Act means that it is relatively easy to unintentionally breach the legislation, especially for businesses who may be implicated in the actions of their employees. That being said, it is important to understand that there is a defence for the charge of having committed bribery: organisations can defend against such a claim, provided they are able to demonstrate that they had implemented ‘adequate procedures’ that were designed to prevent them (through their employees) from becoming involved in bribery.
The 2010 Act does not expressly define what ‘adequate procedures’ means, which places a heavy burden on organisations to prove that they had taken every reasonable precaution to avoid becoming involved in bribery. Essentially, ‘adequate procedures’ tends to involve a framework whereby a business can train its staff to police against bribery; monitor the implementation of anti-bribery policies; and report back on gaps in the framework and identify ways to address these before any offence is committed. Businesses would be well advised to take their obligations under the 2010 Act seriously, particularly given that prosecuting authorities have a lower threshold to meet in terms of prosecuting the offence than individuals and/ or businesses have in defending against any such claim.
Who can I speak to about representing my business?
At Lewis Nedas, we are specialists in the field of corporate crime, and are routinely sought out by organisations of varying sizes to provide comprehensive legal advice and representation. Our lawyers understand the challenges of operating in the international sphere, and in ensuring that employees conduct themselves in a way that does not endanger business interests. If you are concerned about how the 2010 Act operates, or what this could potentially mean for you and your business, contact us today. We will be happy to review your situation and provide you with detailed guidance to address your concerns.
