I’ll Scratch Your Back? Why You Need to be Careful When Buying Gifts on Expenses

A bottle of wine arrives in the post to say thank you for all the work you’ve done on a project. A box of chocolates arrives from someone you referred work to. They’re nice surprises that brighten up your day. But where does the line between thoughtful thank you and corporate bribe lie?

If you’re a small business it’s easy to think that bribery laws only apply to the big fish. But that’s far from the case. The Bribery Act makes it clear the rules apply to businesses of all sizes, big and small. And whether the cost of the gift was reclaimed via expenses or invoiced to the company, because you’ve signed off on it and taken responsibility, you’re putting your business at risk.

The penalties for falling foul of the regulations are potentially huge. The headlines are a maximum of ten years’ imprisonment, along with an unlimited fine for individuals. But away from these, there are also factors that will affect your business in the long term. There is the risk of criminal conviction for directors that fail to carry out sufficient background checks on employees found guilty of fraud. This could lead to directors being disqualified and could affect credit checks – and therefore your ability to grow in the future.

So what can and can’t you do? And what steps can you put in place to make sure your business is compliant with the regulations?

What Do You Need to Do to Comply?

Small gifts make great gestures of goodwill towards both customers and staff. As such they can play a big part in maintaining good relationships and retaining clients. But the key is in the word small. The gift is designed to show gratitude for the relationship you have – not the value of the business they do with you.

This is reflected in the Bribery Act, which lists three principal offences:

• Giving a person a bribe to have them do something improperly.
• Requesting, accepting or receiving a bribe as a reward for doing something improperly.
• Using a bribe to influence a foreign official to gain a business advantage.

To aid compliance, there is government guidance built around six principles to help you form your bribery policy and procedures.

Principle 1: Proportionate procedures. This recognises that different businesses face different challenges. As a small or medium-sized business you’ll face different challenges to a huge multi-national, so the way you apply the principles and the actions you take will be different.

Principle 2: Top-level commitment. As with all business cultures, ethical practices start at the top. A company’s directors and managers need to make it clear bribery is never acceptable.

Principle 3: Risk Assessment. As with all areas of risk, it’s important to conduct a thorough risk assessment and put in place strategies to reduce them. For more on this see How to Create a Risk Management Plan and Why You Need One.

Principle 4: Due diligence. This highlights the need to be confident in the compliance of the people or companies working for or on behalf of your business.

Principle 5: Communication. Your anti-bribery policy and procedures need to be embedded and understood throughout your business, including through staff training.

Principle 6: Monitoring and review. Everything changes over time, which is why you need to monitor and review your anti-bribery measures on a regular basis. Doing this will mean you can be certain your procedures are still relevant – and remain top-of-mind.

You can read the principles in full at www.justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pdf.

How Confident Are You in Your Compliance?

Bribery is a big problem around the world and companies losing out on business due to unfair practices is only the start of the effect it has. As a responsible business you need to act responsibly by making sure you have the policies and procedures in place to protect your business from the risks that bribery presents. Tools such as Concur Invoice, Concur Expense and Concur Audit embed your policies in your systems so you can be confident you aren’t falling foul of your own codes or the law.