0. Session 5 Avoiding bribery and corruption

1. Contents What does the law say about bribery and corruption?
What does the SRA Handbook say about bribery and corruption?
Our anti-bribery and corruption processes and procedures
It is our responsibility under the SRA Handbook on behalf of the firm to ensure that you all understand the rules and requirements governing the avoidance of bribery and corruption and why this is so important both to our firm and to us as individuals.
Full compliance with bribery laws requires the commitment and participation of every employee. Your support and active involvement is critical in ensuring that we adhere to the laws and policies prohibiting bribery.
I will be guiding you through today’s training session, which will cover [refer to slide for contents].

2. What does the law say about bribery and corruption?
As a law firm, we have legal obligations imposed on us through Acts of Parliament, and through regulations that are issued by Government or via one of the regulators we are governed by, eg the Solicitors Regulation Authority (SRA). Many of these rules and regulations apply to all business, not just law firms. We also have internal policies and procedures that we need to adhere to.
The area we are going to look at today relates to the issues of bribery and corruption:
corruption is the misuse of office or power for private gain
bribery is a form of corruption
Our main obligations relating to anti-bribery and corruption are contained in the Bribery Act 2010, although these obligations are supplemented by the SRA Handbook 2011.
Corruption and bribery are serious offences that we need to ensure we don’t get involved with, inadvertently or otherwise. The potential consequences of committing a crime under the Bribery Act 2010 include:
a maximum of ten years' imprisonment
an unlimited fine
criminal penalties under the Proceeds of Crime Act 2002
disciplinary action by the SRA
These penalties don’t just apply to the firm—they could apply to people within the firm, including you.

3. Bribery Act 2010
Bribery Act 2010 (BA 2010) came into force on 1 July 2011:
applies to any business incorporated or trading in
the UK
covers bribery committed by an organisation, or on its behalf through an associated person, anywhere in the world
BA 2010 creates new four new offences
The Bribery Act 2010 is the piece of legislation that sets out legal obligations that we must comply with relating to bribery. The Act is designed to provide an effective legal framework to tackle corruption in both the public and private sectors and came into force on 1 July 2011.
This Act will affect us if bribery occurs anywhere in our business.
This Act puts far greater legal obligations on us than ever before and we must ensure we are all aware of what it says and what is an offence under this Act.
The Act creates four new offences. Let’s have a look at these in more detail.

4. individual or business
BA 2010—new offences
Offence
Description
Can be committed by 1
bribing another person
individual or business 2
soliciting or accepting a bribe 3
bribing a foreign public official 4
failing to prevent bribery
business only
Here is an overview of the four new offences that were created by the BA It is really important that we are all clear on what these four offences under the BA 2010 are.
In a moment we will take a look at each one of these individually but, as we will see today, all four offences share some common factors in their wording. The Act refers to a person giving, promising or requesting ‘an advantage’ intending to bring about or reward improper performance of a relevant function or activity.
‘An advantage’ could be financial or it could be something else, eg a gift, the awarding of a contract or a free holiday. It does not matter whether the advantage is offered or given to the person performing the activity or to someone else, and it does not matter whether it is offered directly or indirectly.
A ‘relevant function or activity’ is a public, business or employment-related activity that it is expected will be performed in good faith or by someone in a position of trust. It does not need to be connected with the UK.
‘Improper performance’ means that whoever performs such an activity does so in breach of that expectation (ie that it will be performed in good faith, etc). The expectation is that of a reasonable person in the UK.
Please note these offences do not require an offer of an advantage and improper performance; these are just common factors. You can commit an offence even if the improper performance doesn’t actually happen.

5. BA 2010—Offence 1 Description of Offence 1 Offence is committed if
Intention of bribing another person is
Bribing another person
one party offers or gives another party an advantage
an advantage is offered or given with the intention of bringing about or rewarding improper performance of a relevant function or activity
an advantage is offered knowing or believing that the other party accepting the advantage would itself constitute improper performance of a relevant function or activity
To commit this offence you would have to offer or give something to someone else in return for them doing something for you improperly.
Whatever you offer them you have to:
intend to bring about improper performance by the other person, or
know or believe that if the other party accepts, this would be improper performance on their part
Some of the key words/phrases to be aware of in relation to this offence are highlighted in bold on this slide—we spoke about these a moment ago.
We will now look at some examples of what could be seen as an advantage under Offence 1 and constitute a bribe if they are given, promised or requested.

6. Could be seen as an advantage if offered/given?
BA 2010—Offence 1 (cont)
Examples
Could be seen as an advantage if offered/given?
Cash/cash equivalent 
Preferential treatment in a tender
Hospitality
Entertainment
Gifts
Donations
A 'financial or other advantage' is not defined in the Act but is likely to include the examples shown on this slide.
This does not mean that we can never offer a gift, hospitality or entertainment to a client, for example, but we have to be careful to ensure that these are not lavish and out of the ordinary (non-routine).
If you are unsure about whether it is appropriate to offer a third party anything like this please discuss this with the COLP (Teresa Payne) or Deputy COLP (Nigel Harper) at the earliest opportunity before taking any further action.

7. BA 2010—Offence 2 Description of Offence 2 Offence is committed if
Intention of soliciting or accepting a bribe is
Soliciting or accepting a bribe
one party accepts or requests an advantage from another party
a relevant function or activity is improperly performed either by the party or by another person with that party’s consent
the request or acceptance is in itself improper performance of a relevant function or activity by that party
as a reward for the improper performance of a relevant function or activity
You would commit this offence if you ask for or accept any form of an advantage from another party in return for knowingly doing, or getting someone else to do, something improperly.
Again the key words to be aware of are highlighted on this slide—‘Relevant function or activity’ and ‘improper performance’ have the same meanings as we went through previously.
It does not matter whether you request/accept the advantage directly or indirectly from the other party.
In most cases, it is irrelevant whether or not the requesting/accepting party (or another person performing the activity on their behalf) thinks that the performance is improper. There is no defence of innocent error.

8. Could be seen as an advantage if offered/given?
BA 2010—Offence 2 (cont)
Examples
Could be seen as an advantage if offered/given?
Cash/cash equivalent 
Preferential treatment in a tender
Hospitality
Entertainment
Gifts
Donations
As mentioned when we looked at Offence 1, there is no definition of what exactly is ‘an advantage’ but as before it is likely that any of the examples shown on this slide could be seen as a bribe if you solicit or accept them.
If you are offered anything like this, or are unsure about whether you can accept something offered to you by a third party, you should discuss this matter with the COLP at the earliest opportunity. You should not accept it unless or until the COLP has confirmed that we will not fall foul of the Bribery Act by you doing so.

9. BA 2010—Offence 3 Description of Offence 3 Offence is committed if
Intention of bribing another person is
Bribing a foreign public official
a party bribes a foreign public official
to influence them in their capacity as a foreign public official, and
to obtain business advantage
Put simply, you will be guilty of the offence of bribing a foreign public official (FPO) if you try to bribe an individual with the intention of influencing that individual in their capacity as a FPO.
The Bribery Act 2010 defines who a FPO is.
It states it is an individual who:
holds a legislative, administrative or judicial position of any kind, whether appointed or elected, of a country or territory outside the United Kingdom (or any subdivision of such a country or territory)
exercises a public function, or
is an official or agent of a public international organisation
In this offence, bribery means offering, promising or giving a financial or other advantage, either to an FPO or to another person at the FPO's request (unless written law allows the FPO to do so).

10. Could be seen as an attempt to bribe an FPO?
BA 2010—Offence 3 (cont)
Examples
Could be seen as an attempt to bribe an FPO?
Cash/cash equivalent 
Paying any amount to expedite a visa
Paying any amount to expedite a planning application
Political or other donations
Again, there is no definition but it is likely that any of these examples could be seen as an attempt to bribe a FPO if you offer, promise or give them to a FPO or another person at the FPO’s request.
If you are involved with a FPO and have any questions or concerns about potential Bribery Act 2010 infringements please contact the COLP as soon as possible before taking any further action.

11. BA 2010—Offence 4 Description of Offence 4 Offence is committed if
Difference from Offences 1–3
Failing to prevent bribery
a person associated with an organisation bribes another person with the intention of obtaining or retaining business or a business advantage for this organisation
It applies to commercial organisations only
It does not apply to individuals
A commercial organisation is an incorporated body or partnership formed under UK law or carrying on business in the UK.
This offence is committed if any of the first three offences are committed inside a business.
The offence of failing to prevent bribery is the most dangerous one for law firms as it is widely drawn. The individual’s intention does not have to be dishonest and the organisation does not have to know about the bribery for it to have failed to prevent bribery.
You should be aware that someone is an ‘associated person’ if they perform services for an organisation—the test is not one of control, so agents, distributors, joint venture partners, etc, as well as employees and subsidiaries, are ‘associated persons’ for the purposes of BA 2010.
Remember that the bribery may occur in the UK or elsewhere—even if the corrupt act takes place outside of the UK it could still result in prosecution in the UK.
It is a defence for an organisation to prove it had adequate procedures in place against bribery—we will be going through our own procedures in today’s session.

12. BA 2010—other points to note
Senior officers—if a senior officer has consented to or been involved with a bribery offence that has been committed by an organisation:
they can also be held liable, and
proceedings can be taken against them personally
Territorial application—offences 1–3 are committed:
if they take place in the UK, or
if they take place abroad and they would be offences in
the UK, and
the perpetrator is closely connected with the UK
Facilitation payments—are not permissible
Senior officers
Section 14 of the BA 2010 states that where any of the first three bribery offences have been committed within a business (reminder—bribing another person, soliciting or accepting a bribe, or bribing a foreign public official) with the consent or connivance of a senior officer, the senior officer can also be held liable for the offence and punished individually.
Negligence by the senior officer isn’t enough—only consent or connivance are enough to establish individual criminal liability. 
For a senior officer to be found guilty under this offence they must have a close connection with the UK.
A senior officer means a:
director
manager
member, or
other similar officer
A senior officer cannot be jointly liable with a company for their failure to prevent bribery (offence 4).
Territorial application
Please be aware that you will commit any of the first three offences if any act or omission which forms part of the offence takes place:
in the UK
overseas but the act/omission would have been an offence if it took place in the UK
and
you are a British citizen, or
you are ordinarily resident in the UK
The Act applies to businesses incorporated or trading in the UK including:
foreign businesses having a trading presence (however small) in the UK, and
UK businesses trading abroad
This shows the BA 2010 has extra-territorial effect.
Facilitation payments
A facilitation payment is usually a payment made to ensure that an official does what they are already bound to do. If made to foreign public officials, they will almost certainly constitute the offence of bribing a foreign public official; there is no need to show corrupt intent in making the payment.
Although permitted in some jurisdictions, in the UK under the BA 2010 there are no exceptions for facilitation payments.

13. BA 2010—penalties Individuals Directors Companies
May be subject to unlimited fines and/or up to ten years' imprisonment
May be disqualified from acting as a director for between two and 15 years
May be subject to unlimited fines and may be disbarred from public procurement in the UK
First conviction under s 2 of Bribery Act 2010: R v Patel (Munir) [2012] EWCA Crim 1243
As you can see there can be harsh penalties for individuals, directors or companies found guilty of an offence under the Bribery Act 2010 and this shows why we need to be so careful that we do not fall foul of the Act.
The first prosecution to be brought under section 2 of the Bribery Act 2010 (Soliciting or accepting a bribe) was in October 2011 and was brought against a magistrates’ court clerk who was found to have accepted £500 by way of a bribe to 'get rid of a speeding charge'. He received a six year prison sentence (three years for the BA 2010 offence and six years for misconduct in public office; sentences to run concurrently). This was reduced to a total of four years on appeal. See R v Patel (Munir) [2012] EWCA Crim 1243.
This is interesting as the publicity surrounding the BA 2010 had suggested that wrongdoing in the corporate world would be targeted, but the first prosecution was against a relatively lowly public official for receiving a bribe of a few hundred pounds.
You may also have read about the recent corruption case involving a company director and an account manager of a potato supplier who were found guilty of paying millions of pounds in bribes to a Sainsbury’s food buyer in return for retaining lucrative supply contracts. The food buyer accepted cash, hospitality and gifts and colluded with them to defraud Sainsbury’s. The offences were committed prior to the Bribery Act 2010 coming into force last July, so these individuals could not be prosecuted under this Act and the penalties set out on this slide will therefore not apply. I have highlighted this recent case though as it illustrates perfectly an example of what would be caught by Offence 1 (bribing another person) and Offence 2 (soliciting or accepting a bribe under this Act).

14. Proceeds of Crime Act 2002 (POCA)
Actions
Offence?
Concealing, disguising, converting, transferring or removing criminal property out of the jurisdiction 
Entering into or becoming concerned in an arrangement that facilitates the acquisition, retention, use or control of criminal property
Acquiring, using or possessing criminal property
Failure to report suspicions
This Act is commonly referred to as ‘POCA’ and it is very important that I tell you a bit about this as it is relevant to the subject matter we are covering today.
The proceeds of any bribe will be criminal property under the Proceeds of Crime Act If you handle or are involved in handling proceeds of any crime (or monies or assets representing the proceeds of crime) you will commit an offence under this Act.
So if we know, or suspect, that a bribe has been paid or received in a transaction in which we are involved in, we could potentially commit an offence under POCA if we fail to disclose our knowledge or suspicion to the Serious Organised Crime Agency. Note that custodial punishments can be handed down for failing to report suspicions.
We will look at how you should disclose any suspicions later in this session when we look at our internal processes and procedures.
If you have any concerns about anything to do with money laundering or you suspect a bribe has been offered/received you must talk to the COLP as soon as possible to report this matter before taking any further steps.

15. Penalties under POCA Up to 14 years’ imprisonment Unlimited fines
POCA carries heavy penalties—a maximum sentence of 14 years’ imprisonment and/or an unlimited fine!

16. What does the SRA Handbook say about bribery and corruption?
As well as needing to ensure that we comply with any legislation relating to bribery/corruption, we also have regulations that we need to follow that are set out within the SRA Handbook. We will now briefly look at the most relevant sections from the Handbook.

17. SRA Handbook—key extracts
Principle 2:
You must act with integrity
Principle 3:
You must not allow your independence to
be compromised
Principle 6:
You must behave in a way that maintains the
trust the public places in you and in the
provision of legal services
I have extracted three of the SRA’s 10 Principles—their ten pillars of legal practice that are all pervading—which would be breached if an act of bribery was committed to illustrate our obligations in this area under this regulation.
Principle 2: You must act with integrity
Personal integrity is central to your role as the client's trusted adviser and should characterise all your professional dealings with clients, the court, other lawyers and the public.
Principle 3: You must not allow your independence to be compromised
‘Independence’ means your own and your firm's independence, and not merely your ability to give independent advice to a client. You should avoid situations which might put your independence at risk.
Principle 6: You must behave in a way that maintains the trust the public places in you and in the provision of legal services
Members of the public should be able to place their trust in you. Any behaviour either within or outside your professional practice which undermines this trust damages not only you, but also the ability of the legal profession as a whole to serve society.

18. SRA Code of Conduct—key extracts
Management of your business:
Outcome 7.2: have effective systems and controls in place
Outcome 7.5: comply with legislation applicable to your business
You and your regulator:
Outcome 10.4: report to the SRA promptly any serious misconduct by any person/firm/employee/manager/owner
The Code also contains compulsory outcomes that we must achieve that mean we have to have anti-bribery and corruption processes and procedures in place. I have extracted the most relevant ones for you and you can see them on this slide:
Management of your business
Outcome 7.2: We must have effective systems and controls in place to achieve and comply with all the Principles, rules and outcomes and other requirements of the SRA Handbook, where applicable;
Outcome 7.5: We must comply with legislation applicable to our business, including anti-money laundering and data protection legislation
You and your regulator
Outcome 10.4: we must report promptly to the SRA serious misconduct by any person or by the firm, or any employee, manager or owner of any the firm (taking into account, where necessary, our duty of confidentiality to your client)

19. Our anti-bribery and corruption processes and procedures
I and the management team at this firm are committed to preventing bribery and as such we have put a number of procedures and policies in place that we must all be aware of and actively follow.
We expect you all to be as committed to preventing bribery as we are. Bribery is never acceptable—we have zero tolerance of bribery in this firm.
Now let’s have a look at the policies we have in place in this firm around this topic—you can find these policies on the intranet.

20. Intranet & Firm’s Compliance Manual
Our policies
Name of policy
Location of policy
Anti-bribery and corruption policy
Intranet & Firm’s Compliance Manual
Gifts and hospitality policy
Intermediaries policy
Charitable and political donations
policy
Anti-bribery and corruption policy
This sets out the steps all of us must take to prevent bribery and corruption in our business and to comply with the legislation.
Gifts and hospitality policy
There can be significant risks around accepting or offering gifts and hospitality as they can be used to influence and corrupt third parties.
This aim of this policy is to:
• provide you with guidance on acceptable gifts and hospitality
• prevent the giving or receiving of gifts or hospitality that might influence or be perceived to influence a business decision
• provide you with a process to ensure that any legitimate expenditure is recorded
Intermediaries policy
As we use intermediaries (eg associates, agents, contractors and referrers), this policy contains processes for:
• conducting due diligence on them
• ensuring they will comply with our anti-bribery and corruption policies
There can be significant risks around accepting or offering gifts and hospitality as they can be used to influence and corrupt third parties.
Charitable and political donations policy
Charitable and political donations can be (or can be seen as) bribes in disguise. Our policy covers political and charitable donations made by the firm or on its behalf. This is to ensure that any legitimate contribution is recorded and does not improperly affect the firm.

21. Indicators of bribery and corruption
Action
Indicator?
Payments are for abnormal amounts 
Payments are made in an unusual way
Processes are bypassed for approval or sign-off of terms or other commercial matters
You are prevented from or hindered in monitoring commercial processes
Individuals are secretive about certain matters/relationships and/or insist on dealing with them personally
Records are incomplete or missing
A big part of our anti-bribery and corruption procedures is ensuring that you are all aware of what is/isn’t acceptable and that you know what to look out for so you can let us know about any potential indicators of bribery and corruption you identify.
Let’s now look at some common indicators of bribery and corruption:
• payments are for abnormal amounts (eg commission) or made in an unusual way (eg in cash when they are normally settled by invoice)
• processes are bypassed for approval or sign-off of terms or other commercial matters (eg you are usually the one to approve or sign off on something and suddenly you are no longer required to) or you are prevented from or hindered in monitoring commercial processes (eg you are being by-passed or excluded from matters in which you would usually be involved)
• individuals are secretive about certain matters or relationships and/or insist on dealing with them personally (eg you are no longer allowed to deal with clients you previously dealt with)
• records are incomplete or missing (eg you notice that information that is usually recorded is no longer being recorded or transaction details have been omitted from statements/records)

22. If you suspect bribery or corruption…
REPORT!
Our anti-bribery and corruption policy sets out the process for reporting knowledge or suspicion of bribery or any breaches of our policy.
All members of staff have an obligation to report actual or potential suspicions of bribery or corruption. We take our regulatory obligations very seriously but do not want to encourage a ‘blame culture’. We are all in the same boat and if something needs to be raised, it needs to be raised as soon as it is spotted. The sooner a matter is raised, the more likely it is that it can be resolved quickly. Matters that are ignored tend to get worse.
If you know or have formed a suspicion that another person is engaged in bribery or corruption you must complete an internal suspicious activity report form (SAR).
You must use this form in every case where you know or suspect that another person is engaged in bribery or corruption.
It is critical that any concern is raised in neutral terms. Just stick to the facts as perceived without subjective remarks or judgment.
A record of this SAR will be kept by the nominated officer for at least five years.
If you are unsure as to whether you have such a suspicion, please do not use the form but instead seek guidance from the firm’s MLO or COLP.

23. Summary What does the law say about bribery and corruption?
What does the SRA Handbook say about bribery and corruption?
Our anti-bribery and corruption processes and procedures
What to do if you suspect bribery or corruption
This presentation has covered:
• what does the law say about bribery and corruption?
• what does the SRA Handbook say about bribery and corruption?
• our anti-bribery and corruption processes and procedures
We have several documents to hand out to you:
our anti-bribery and corruption policy
our gifts and hospitality policy
our intermediaries policy
our charitable and political donations policy
You can also find these documents in the firm’s Compliance Manual and on the intranet.
As a reminder, full compliance with bribery laws requires the commitment and participation of every employee. Your support and active involvement is critical in ensuring that we adhere to the law.
If you have any questions related to bribery/corruption compliance, please raise them right away with the COLP or your manager. 
We regularly review our policies and procedures and further training will be given as and when these policies change. If you would like further training in the interim please contact your manger and myself.

24. Final comments Any questions?to
Update your training records in Compliance Manager
If you have any questions arising from this presentation please them to
Don’t forget to update your training records in Compliance Manager to indicate that you have completed this training session.