In April 2017, the Criminal Finances Act achieved Royal Ascent, bringing with it stronger anti-bribery measures. This, along with new anti-money laundering regulations (which came into force in June 2017), are just a few of the measures the government have been adopting to tackle corruption. They serve as a reminder of the importance of having robust anti-bribery and corruption measures in place.
What constitutes corruption?
Given its international nature and the number of third parties that are involved, bribery and corruption are a particularly high risk for the travel and aviation sector. It is important to understand that corruption can take many forms (e.g. bribes, fraud or extortion) and occurs on different scales. Bribery, for example, is not just about brown envelopes stuffed with cash, it can take the form of gifts and hospitality. Knowingly accepting a bribe is just as much an offence as offering a bribe in the first place.
Additionally, it is not just your own actions that you must consider. As a business, you are also accountable for the actions of your own employees and that of third parties (including suppliers, agents and partners) – whether you know about their actions or not. This is referred to as corporate bribery. It is therefore your responsibility to take appropriate steps to educate employees and prevent bribery and corruption.
What are the implications?
Although what constitutes corruption varies from country to country, the UK government takes a hard line when it comes to tackling corruption. In January 2017 it was ranked 10th in the Transparency International Corruption Perception Index which scores countries on how corrupt their public sectors are seen to be.
Over the last few years, there have been several high profile investigations into the practices of various organisations, from aircraft manufacturers and airlines, through to government tourism bodies. If found guilty, there can be serious consequences. For example, an aviation company had to pay a $107m penalty as part of a deferred prosecution agreement, while two businessmen who pleaded guilty to bribing foreign aviation officials were imprisoned for 18 months.
What action should you take?
However tempting it can be to gain a competitive advantage, the legal, financial and reputational consequences of stepping out of line can be far reaching. So how do you minimise the risk of falling foul of international anti-corruption legislation?
- Undertake a risk assessment to identify high risk areas
- Take a top down approach to anti-corruption
- Put in place appropriate policies and procedures, including whistleblowing measures and guidelines on gifts, entertainment and hospitality
- Ensure staff receive regular training on anti-corruption measures and know how to identify situations or activities which have a high risk of bribery or corruption
- Conduct due diligence (including checks for sanctions and politically exposed persons) on new and existing suppliers and customers
- Ensure contracts include anti-corruption clauses and rights to terminate in the event of non-compliance
- Continuously monitor, test and review compliance with anti-corruption measures both internally and within your supply chain.
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