Creating An Anti-Bribery And Corruption Policy For Your Company: A Primer
Bribery and corruption are a global scourge. They permeate world governments as well as the global private sector and sabotage everything they touch. American businesses are not immune to corruption -- and if they are not careful, they can succumb to serious unethical business practices that will, sooner or later, bring down the whole enterprise with criminal penalties and reputational harm.
In this article, the team at EasyLlama will talk about:
how bribery and corruption happen in American businesses
the relevant anti-corruption laws
what to include in a corporate anti-bribery and corruption policy
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Bribery As It Relates To The Business World
We hear a lot about corruption among politicians and government officials. But who is bribing them -- and to what ends?
Spoiler alert: it's companies trying to obtain or retain business -- or otherwise gain some unfair, improper advantage over the competition in the marketplace. From slipping a few bucks to the health and safety inspector -- to buying a politician's vote on a profitable initiative with thousands of dollars' worth of charitable contributions, bribery is not just a government problem, it's a business problem.
Definition Of Bribery
In Wex legal dictionary (used in US law), bribery is defined as: "corrupt solicitation, acceptance, or transfer of value in exchange for official action".
This applies to actions like soliciting, offering, giving, or receiving any "gift" (including monetary currency, job offers, and various items of value) as a means of affecting the actions of a person holding a public or legal duty (a "government official"). A matter that is meant to be handled objectively is now being considered with private interests in mind.
The definition of "government official" in this case encompasses a wide variety of professionals such as:
an official/employee of the government
an individual elected/appointed to a public office/government entity
a candidate for/official of a political office or political party
official / employee of a company wholly or partially controlled by a government (e.g. state/government-owned businesses)
a person acting in an official capacity for any of the above-mentioned categories in any rank/position
"Things of value" that serve as bribery payments are not limited to cash and job offers: they can include stocks, personal property, debt forgiveness, and cash equivalents like gift certificates.
Bribes include the so-called "facilitation payments" -- non-official fees used to "grease the wheels" of a routine governmental action to move smoother/faster. Attaching a "facilitation payment" to a bureaucratic request may be a common practice in a foreign country one is doing business with -- but it remains unlawful for all US-based companies.
Business-Applicable Anti-Bribery Laws In The United States
Bribery is a crime -- one that both the person giving the bribe and the person taking the bribe can be charged with it.
The dominant piece of legislation focused on preventing and prosecuting bribery and corruption of US federal public officials is the United States is US Code Title 18 Section 201.
The Foreign Corrupt Practices Act of 1977 (FCPA) further forbids individuals and companies from directly or indirectly offering or providing corrupt payments/other things of value to non-US government officials, employees of certain types of state-owned entities, political candidates, political parties, and officials of a public international organization such as the UN or the World Bank.
The government agency in charge of enforcing the anti bribery laws stateside and abroad is the US Department of Justice, in tandem with the Securities and Exchange Commission.
Criminal Penalties For Bribery
Bribery is punishable by up to 15 years’ imprisonment, a fine of USD 250,000 (USD 500,000 for organizations) or up to three times the value of the bribe, and a disqualification from holding any federal office.
Proof Of Bribery
Proof of bribery of a public official requires a demonstrable case of "quid pro quo": it must be evident that a voluntary, mutually beneficial exchange of favors took place to the point where the recipient of the "gift" altered their behavior upon receiving it.
The intent to improperly influence the official with the gift also must be clearly demonstrated (as opposed to making a friendly gift in "good faith").
Who Needs An Anti-Bribery And Corruption Policy?
Some organizations don't face a high risk of bribery, while there are certain industries that lend themselves to more risk of corruption (for example, mining and oil industries are extra vulnerable to bribery.) If a company does business/has business partners overseas, this ups the possibility of bribery or corruption. Conducting an objective risk assessment of one's company's vulnerability to corruption risk is recommended for every business.
Who Is Responsible For Creating The Anti-Bribery And Corruption Policy?
It is the responsibility of the CEO, the board of directors, or the top-level member of the business to nominate an individual or team in charge of creating/publishing/implementing the anti-bribery policy of the company (in larger companies, this is usually the job of the Chief Compliance Officer; the help of a legal advisor may be required to ensure compliance to the fullest).
What Every Anti-Bribery And Corruption Policy Should Include
Companies must be committed to conducting business in compliance with the highest ethical standards. This involves having -- and enforcing with due diligence -- a zero-tolerance policy for anti-bribery that is made crystal-clear to every employee.
While each company's policy should anticipate the particulars of a given industry, here are just a few essential components that every corporate anti-bribery policy should have:
A statement on the company's approach to preventing and reducing the risks of bribery.
Clear definitions of what "bribery and corruption", "government officials" an all other related concepts/terms mean in the context of the US law.
A clear statement prohibiting commercial bribery. In addition to stating that bribing government officials is unlawful, include a company policy clause that prohibits employees from providing or accepting corrupt payments/advantages from non-government business partners and associates from the private sector.
A statement about third parties declaring that all joint venture partners, contractors, vendors, distributors, agents and other third party representatives in connection with the company are expected to comply with its anti-bribery and corruption policy.
Guidelines for properly conducting business (e.g. the right and the wrong way to negotiate contracts).
Guidelines for avoiding/stopping conflicts of interest.
Clear rules about accepting gifts, hospitality, donations, etc.
A protocol for reporting observed and suspected violations.
A whistleblower policy. This protects employees from retaliation for good-faith reporting violations of anti-bribery and corruption laws and policies.
Prevent Bribery And Corruption With Proper Workforce Training
Creating an anti-corruption policy for the company is a necessary step toward putting a stop to bribery and corruption in the workplace -- but it's not the only step! Every business must also:
Run a tight ship with the company's books, with no room for improper payments
Develop a Company's Code of Business Conduct/Ethics in addition to the Anti-Bribery Policy
Make it easy for the workforce to familiarize themselves with / adhere to these policies.
Train employees and leadership to understand, identify, resist, and properly report bribery and other corrupt practices at the workplace.
Training is key to preventing bribery and corruption from happening in the first place. You certainly don't want to wait for these problems to develop: the "clean-up" is immeasurably more costly!
EasyLlama Has The Right Anti-Bribery Training For Your Business!
You don't want just any training for your employees -- you want training that sticks. People have to believe in the rules before they obey them on a zero-tolerance level.
As a leader in the corporate e-learning space, EasyLlama is joining the effort to combat bribery and help folks discover how to stop corruption in the American workplace with its new e-training that is easy, fast, and impactful!
EasyLlama's anti bribery & corruption training design breaks down the problems with bribery and corruption in ways that make sense and resonate on a personal level. Your employees will learn to recognize the signs of things being "fishy" -- and learn not to take the bait and succumb to the slippery slope of corrupt practices. They -- and your company -- will be safer and more productive for it.
Written by: Maria Malyk