Anti-Bribery and Anti-Corruption Compliance Training — Course Transcript

Introduction

Welcome to the Anti-Bribery and Anti-Corruption Compliance course. The focus of this course is specifically anti-bribery. There are many laws and rules related to bribery. Compliance with these rules is critical for a variety of reasons.

• First and foremost, good ethical conduct is essential in building and maintaining strong international relationships.
• Compliance is critical in building broad public support for aid and development, and influencing policy makers.
• Bribery and corruption hurt the poor disproportionately in all countries and can aggravate conflict and insecurity.
• When corruption is present, resources for development and humanitarian assistance are often diverted and the cost of public services increases.
• Finally, bribery undermines economic growth and is a barrier to poverty alleviation and good governance.

This course is designed to educate and prepare you to be in compliance with the U.K. Bribery Act. Presently 38 countries are committed to similar legislation. In the U.S. for example the U.S. Foreign Corrupt Practices Act or FCPA is the governing legislation. But the U.K. Bribery Act is the most comprehensive and currently sets the highest bar.

By the end of this course, you should:

• Be able to identify a bribe and a facilitation payment.
• You should know how to resist bribery solicitations, most notably facilitation payments.
• You should understand the loss of life, limb, or liberty exception to facilitation payments.
• You should also understand what constitutes acceptable gifts and hospitality.
• You should know how to prevent bribery by third parties.
• And finally, you should know the penalties for non-compliance, and whom to contact for help if you need it.

Let’s move on – click the Next button to continue.

 

Examining Legislation

Let’s take a look at the UK Bribery Act of 2010. This legislation became effective in July 2011, and it prohibits companies and their employees from accepting, receiving, and/or failing to prevent bribery anywhere in the world regardless of intent.

Criminal Prosecution can be brought against:

• UK citizens and residents,
• Non-UK citizens and residents (if the bribe occurs in the UK),
• UK Headquartered companies, and
• Companies that operate in the UK even if the action did not occur in the UK.

Now let’s take a quick look at the US Foreign Corrupt Practices Act otherwise referred to as the “FCPA”.

Despite its less restrictive language relative to the UK Bribery Act, the FCPA remains relevant because of its high level of enforcement. This legislation has been around for many years. Like the UK Bribery Act, it prohibits companies and their employees from accepting, receiving, and/or failing to prevent bribery anywhere in the world. However, there is a required element of intent. Since the UK Bribery Act is currently more comprehensive in scope, our focus will be predominately on this act.

US and UK authorities now expect that companies doing business internationally have a formal anti-bribery compliance program.

 

What Is a Bribe?

Bribery is the act of directly or indirectly offering, giving, or receiving anything of value with the intent to influence someone’s behavior. Specifically, behavior that is illegal, or that would help secure an improper advantage.

Remember – even a charitable donation constitutes something of value. A bribe is still a bribe even if masked by another name, such as a gift, consulting services, or a “special fee.”

 

What is a Facilitation Payment?

Facilitation payments are small payments or fees requested by government officials to speed up or facilitate the performance of routine government actions such as the provision of a visa, customs clearance, permit, license, work order, police protection, utility services, mail service, contract performance and actions of a similar nature.

In many countries these types of payments are considered normal and customary. However, under the UK Bribery Act, even facilitation payments are illegal!

 

Resisting or Dealing with Facilitation Payments

Being prepared is one of the best ways to deal with bribes, should you ever be confronted with one. There are many ways we can prepare ourselves for dealing with bribes, including participating in training and being familiar with Anti-Bribery laws; performing risk assessments and careful due diligence on third parties; drafting contracts with anti-bribery provisions; educating partners about these laws and sharing this training; following contract payment procedures, using wire transfers for payments, and not paying in cash; talking to your legal team before beginning operations in certain countries where you may not be familiar with the relevant laws and practices; monitoring or being alert for possible violations and not ignoring “Red Flags”; and, planning ahead to avoid payments under duress, using security when necessary, as well as building in time for delays caused by your refusal to pay bribes and stay in compliance with these laws. Remember – you will NOT be disciplined for compliance!

If you think you have been asked to pay a bribe or a facilitation payment, take time to think before responding and do not act alone. Take a few moments now to examine some best practices in dealing with bribery by using your mouse to click on each cell. Be sure to review all of the information in this activity before moving on.

• Say “No.” Sometimes a direct refusal is enough.
• Answer that the solicitation must be made in writing and reviewed by your manager/your legal team. Let the solicitor know that the writing should include the official or /demanding party’s name.
• Refuse the solicitation on the grounds that it violates your organization’s principles, violates the law, and could lead to your dismissal, as well as criminal prosecution for you and the soliciting party.
• Contact your legal team immediately to provide details of the incident and to develop a plan to respond.
• Record the details of the incident as soon as possible after the event.
• Never act alone – whenever possible, operate as a team of at least two employees.

 

Loss of Life, Limb or Liberty Exception

There may be exceptional situations where it is necessary to make a facilitation payment to ensure the safety of an individual. Where there is NO ALTERNATIVE to protect against loss of life, limb, or liberty, the common law defense of duress is available. If you encounter this, contact your legal team as soon as practical to report the incident.

 

Case Studies

Let’s examine a case study involving bribery. Keep in mind that in some countries, facilitation payments are considered normal and customary. Our example is a US university that has an office in another country. The university shipped medicine to its foreign office. Customs officials in this country held up the shipment and demanded 30,000 US dollars to release the shipment. What would you do?

Here’s what the university did:

1. First, they said “No.” Sometimes a direct refusal works and people back down.
2. When this didn’t work, they requested the demand in writing.
3. When Customs refused, they spoke to the university’s legal team. The team went to high- level political officials in the country to request a release. This ultimately worked…but due to heat and delay the medicine was ruined.

Now, the university ships everything to the US Embassy in that country and picks it up there. To date, no further issues have occurred.

The lesson learned from this case is to comply with policy requirements and have a plan for dealing with customs and ports of entry. For example, order things early to avoid time pressure, never indicate that you are under a deadline, research the ports of entry to determine which ones pose the highest level of corruption risk and set out primary and alternative import routes accordingly, and research customs procedures so you are aware of what is required and what is not.

Let’s look at another case study. An NGO staff person travels from the province where her organization is headquartered, to an operating site in another province. She is stopped by a local police officer who asks to see her local ID documents and permits. The officer informs her that he has to withhold her passport claiming that there is a “special” stamp missing and that she does not have the authorization necessary for internal travel. The officer offers to solve the problem in exchange for a small cash payment. What would you do?

Here’s what she did:

1. Before she left she ensured her documents were valid and that there was no need for a “special” stamp. She explained to the officer that she was certain her documents are valid and that there is no need for this “special” stamp. He ignored her.
2. She then told the officer it is against the law and against her organization’s policy. He ignored her.
3. She then told him that if is truly a required payment, she would need his name and signature on a receipt. He responded in a threatening manner suggesting that she was not free to leave until payment was made.
4. At this point, she felt threatened. So she tried to negotiate the payment to a minimum. When that didn’t work, she made the payment.
5. She documented the incident herself, reported it as soon as she was able to reach her manager and her legal team. They documented the incident and helped her devise a plan to avoid similar incidents in the future.

Lessons Learned: Comply with your organization’s policy requirements. It is especially important to document the details off the incident as soon as possible after an event and report such an incident to the appropriate persons within your organization.

Gifts and Hospitality (Reasonableness)

There are several guidelines you should follow regarding gifts and/or hospitality:

• You should keep in mind that the value of all gifts, entertainment and corporate hospitality, both given and received, must be of nominal or insubstantial value and reasonable in light of the particular circumstances of the encounter. Otherwise, it may be interpreted as bribery!
• There is legally no definitive threshold but gifts should be limited to $100 or less per individual, per year, or as proscribed by your organization’s policy.
• Cash or cash-equivalent gifts are prohibited.
• Contact your legal team if you would like more information on the subject.

Working with Third Parties (Indirect Bribery)

There is always some risk involved for indirect bribery to take place when working with third parties. An organization could be found guilty of bribery for actions taken by “associated persons” acting for or on its behalf – even actions that are unauthorized or unknown. Third parties might include:

• Employees
• Agents
• Consultants or contractors
• Employees of service providers
• Joint venture partners, and
• Grantees

Should indirect bribery occur with a third party, the only available defense is establishing that your organization had “adequate procedures” to prevent bribery by the associated person.

“Adequate procedures” may include:

• Procedures related to due diligence
• Safeguards
• Monitorin

For more information, contact your legal team.

 

Penalties for Non-Compliance under the UK Bribery Law

There are penalties involved as a result of not complying with the Anti-Corruption Act.

For instance, companies can face unlimited fines unless they have “adequate procedures” in place. “Adequate procedures” may include procedures related to due diligence, safeguards, and monitoring. For more information about your organization’s adequate procedures, contact your legal team.

• Individuals can face unlimited fines and prison sentences up to 10 years.
• Senior Executives may face personal liability if an offense is committed with their consent or passive consent. Passive consent is when a person has knowledge of, or should have known.
• Liability can attach to third-party actions, such as agents, consortia members, and partners.
• There are also operational costs and reputational risks to consider.

There are comparable penalties under the FCPA.

Remember – if you need more information about this topic, or need help with a specific situation you have encountered, contact your legal team!

 

Potential Indicators of Bribery or Corruption

There are many potential indicators of bribery or corruption. Click on each icon to learn more. When you are finished, click the Continue button.

• Abnormal cash payments.
• Pressure exerted for payments to be made urgently or ahead of schedule.
• Payments being made through a third country, usually via a shell company.
• Abnormally high commission percentage being paid to a particular agent (this may be split into two accounts for the same agent, often in different jurisdictions).
• Private meetings with public contractors or companies hoping to win a contract.
• Lavish gifts being received.
• Agreeing to contracts with terms or timing unfavorable to the organization.
• Abusing decision process or delegated powers in a specific area.
• Company procedures or guidelines not being followed.
• Invoices being accepted in excess of contract amount without reasonable cause.

 

Bribery- Red Flags

There are many red flags associated with bribery and corruption. Click each character to hear several examples of verbal red flags. When you are done, click the Next button to continue.

 

Key Risk Areas

There are several key risk areas when it comes to bribery or facilitation payments. Take some time to learn more about these key areas by clicking on each heading in the chart. When you are finished, click the Continue button.

• In certain cultures and work environments, bribes may be seen as “business as usual.”
• Emergency time pressure and security context may increase risk.
• The nature of the sector in which your organization works may pose specific risks.
• Factors that may impact bribery risk include: the size, structure and/or governance of partners; the adequacy of partners’ control systems; the partner selection processes; the partnership contracts and agreements; the partners’ monitoring and support processes; and, the political involvement or connections of partners.
• Where procurement processes are not fair or transparent there is increased risk. Procurement is a high risk area for bribery.
• Certain transactions may carry higher risk. Some examples include payments to government officials, major contracts, and payments through third parties.
• Bribes can be offered or sought as part of recruitment processes.
• There may be increased risk when your organization starts new activities in which you have limited experience, or activities in a new country.
• Risks may be higher in certain countries or regions within countries. Activities in urban areas may pose different risks than activities in rural areas.

Educate yourself before you visit an area that is considered highly corrupt, or where you may be unfamiliar with the laws and regulations applicable. Transparency International provides a Corruption Perception Index that is frequently updated. Click on the link at the bottom of the image to view the live site. When you are done, return to the player browser to continue on with the course.

 

Summary

You should now have the knowledge you need to be in compliance with the essential Anti-Bribery laws.

You should now be able to identify a bribe and a facilitation payment. You should know how to resist a bribery solicitation if you are ever confronted with one. You should now also have an understanding of the loss of life, limb, or liberty exception. You should also understand what constitutes acceptable gifts and hospitality, and you should know how to prevent bribery through third parties. Finally, you should now understand the penalties of non-compliance, and who to contact for help or more information, if you need it.

This concludes this e-learning module – thank you for your time and attention. You will now be required to take a short quiz, which will reinforce the concepts you just learned and will allow you to see what knowledge you’ve retained. Click the Next button to start the quiz.