The Act came into force in July of last year amidst great concern from the business community that its drafting was too wide so as to render even the most innocent of transactions as potentially corrupt. The government, keen to uphold the banner of ‘zero tolerance’ over the Act, kept the generic and broad drafting. The result – businesses are now asking how the Act relates to their business practices in real terms.

Many of our clients, particularly those in the design field, operate as a ‘middle-man’ when it comes to procurement. For example, our client acts for business A to provide design services and procure design goods from business B. In order for business A to achieve a good rate for those goods, our client has established a working relationship with business B such that if they provide business A with goods, they would do so at a special rate and, for his efforts, our client would receive a commission.

Under the Act, section 7 creates an offence whereby an organisation or person associated with it ‘bribes’ another person to gain a business advantage. Under the broad wording of the Act, receiving (or offering) a commission in this way could potentially be an act of ‘bribery’ but it depends on whether such an act could be deemed to be ‘improper performance’ of your duties.

So how do our clients try to make their performance ‘proper’ for the purposes of the Act? Unfortunately, there is little guidance on this point both in terms of official guidance and case law. The best practice advice currently seems to be:

1. Make sure the commissions are reasonable and proportionate to the value of the contract. Inflated commissions are likely to be more questionable.
2. Make sure the reason for getting business B to provide the goods for business A is primarily in the best interests of business A and not yourself. Wherever possible, make sure you can show the reason why you approached business B as opposed to some other entity. Was it solely so you could get your commission or was the deal beneficial to business A also?
3. Be aware that disclosing the commission to business A will not relieve you of your liability. If the act falls foul of the Act, you will still be committing an offence even if business A was aware of it and approved it. This is, of course, not to discourage transparency between business partners, simply to state that disclosure is not a defence.
4.  Know your obligations under the Act and have in place (and take note of) an anti-bribery policy which you can rely upon in an investigation of an offence under section 7 to show that you have taken appropriate steps to prevent bribery.
5.  Finally, official guidance stresses that a reasonable approach should be taken to the application of the Act to businesses. What is appropriate for a large corporate entity may not be necessary for a small business and the nature of your business will also determine the measures you should be taking.