Bribery and corruption are two sides of the same coin. Often, public officials who accept bribes are usually considered corrupt, as are organisations that attempt to bribe.
According to Diligent, this makes anti-bribery and corruption equally essential parts of a company’s compliance programs.
The firm said, “Anti-bribery guidelines prevent people and organizations from attempting to bribe others, while anti-corruption guidelines prevent public officials from accepting those bribes. Both bribery and corruption are unethical, but there are also laws to prevent them, such as the Foreign Corrupt Practices Act (FCPA) in the U.S. and the UK Bribery Act.”
Anti-bribery makes it a crime to offer a bribe, accept a bribe, attempt to bribe a foreign official or fail to prevent someone else from offering a bribe for your organization. That means your organization can be held accountable if a third-party attempts to bribe public officials while acting on behalf of your organization.
Meanwhile, anti-corruption guidelines are similar to anti-bribery. They prohibit paying foreign public officials or the leaders of state-owned organizations in return for favourable treatment.
Globally, 46 jurisdictions have laws associated with anti-bribery and corruption. For example, the US and the UK have influential ABAC laws that set a global standard for bribery and corruption and the penalties associated with each.
One example is the UK Bribery Act. The UK Bribery Act is considered a landmark law. It establishes criminal law related to bribery and covers not only those that offer or accept bribes but also any third parties that offer or accept bribes on behalf of another entity. Unlike other laws, the UK Bribery Act covers the private and public sectors.
Under the law, bribery is defined as an individual or organisation that pays a bribe to gain favourable treatment towards their business activities.
Diligent said, “This doesn’t require the intent of the individual or business paying the bribe. It’s important to note that the UK Bribery Act sets a stricter standard than many other laws since even paying to expedite a routine government action is considered a bribe. You are still accountable even if a third party offers a bribe to benefit your organization.”
Some of the penalties- varying on severity – include up to ten years in prison, unlimited fines and prohibition from bidding for public contracts.
Meanwhile, the US’ Foreign Corrupt Practices Act (FCPA) of 1977 can be seen as a companion to the UK Bribery Act.
Diligent said, “It prevents organizations from bribing foreign officials to benefit their business. It also sets a global standard for corruption since it was amended in 1998 to cover domestic and foreign organizations”
The FCPA requires all publicly-traded companies to document their internal accounting controls to reflect all transactions. The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) enforce the FCPA, which has been a top priority for both organizations for over a decade.
Organizations that violate the FCPA could face penalties, including up to five years in prison, up to $100,000 in criminal penalties and $10,000 in civil penalties.
Diligent concluded, “Regulators routinely uncover evidence of corrupt acts by an intermediary acting on the company’s behalf, both with and without the company’s knowledge, making risk-based due diligence a top priority for your anti-bribery and corruption compliance program.
“Assigning the appropriate level of due diligence for the company’s third parties requires assessing risks objectively and systematically, but finding the right balance of how much and how often to conduct due diligence isn’t always easy.”
Read the full post here.
Copyright © 2022 FinTech Global