‘Tis the season to be jolly, but when does a Christmas gift become a bribe?

Forgive me for seeming a little Scrooge-like, but now seems a good time to remind people of the requirements of the Bribery Act 2010 and the need to comply with it.

Acts of bribery or corruption are designed to influence an individual in the performance of their duty and incline them to act in a way that a reasonable person would consider to be dishonest in the circumstances.

Bribery can be defined as offering, promising or giving a financial (or other) advantage to another person with the intention of inducing or rewarding that person to act or for having acted in a way which a reasonable person would consider improper in the circumstances. Corruption is any form of abuse of entrusted power for private gain and may include, but is not limited to, bribery.

Bribes are not always a matter of handing over cash. Gifts, hospitality and entertainment can be bribes if they are intended to influence a decision and it is probably here that the estate agency sector needs to take a sensible and pragmatic approach.

Under the Bribery Act 2010, bribery by individuals is punishable by up to ten years’ imprisonment and/or an unlimited fine. If a business is found to have taken part in the bribery or is found to lack adequate procedures to prevent bribery, it too could also face an unlimited fine.

A conviction for a bribery or corruption related offence would clearly have severe reputational and/or financial consequences for a business.

There are a number of risk areas but excessive gifts, entertainment and hospitality is the most likely as these can be used to exert improper influence on decision makers.

A business should have a clear gifts and entertainment policy which sets out the parameters which are acceptable.

Reciprocal agreements are also a risk area and improper payments to obtain new business, retain existing business or secure any improper advantage should never be accepted or made.

Third party arrangements where they act on behalf of the business need to be carefully screened. Third parties should only be engaged after thorough due diligence and where there is a clear business rationale for doing so, with an appropriate contract. Any payments to third parties should be properly authorised and recorded.

No-one is suggesting that a thank you bottle of wine or box of chocolates after a transaction successfully completes is an issue but offers of gifts before a transaction is entered into are always suspect and, in my opinion, money should never change hands. For example, if a buyer offers to pay money to an estate agent, he can clearly pay that money by way of an increased offer to the vendor for whom the agent is probably acting.

* If you need any assistance with creating Bribery Act or gifts and entertainment compliance policies, I should be pleased to discuss them with you.

Likewise, I can help with Consumer Protection Regulation or Money Laundering Regulation compliance.

msd@integra-ps.com

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One Comment

  1. letmeout

    May be worth you speaking to FIFI

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