ONLINE BRIBERY ACT COMPLIANCE TRAINING

Our Compliance Programme

• Welcome to our Bribery Act compliance training course. The course has been designed to help you to understand the Bribery Act and anti-corruption compliance.

• The training will take you through the new law and issues arising. After you have finished the course, there is a short test to complete to assess your understanding of the law and how this relates to you. Because of the importance of the Act and the implications of getting it wrong, the test will be scored and your results captured centrally. If you score less than the pass mark you will be required to return to the training and re test.

• Further information regarding the Bribery Act and associated company policies can be found on the Intranet. If you do not understand any of the information relating to the Act please speak with your line manager or our legal department on 0113 222 6513.

Why anti-corruption compliance is so important:a message from the CEO

Dear colleagues,

 

The Bribery Act 2010 came into force on 1 July 2011. The Communisis Bribery Policy was issued in June 2011.

The Act has an effect on how we deal with customers, suppliers and other third parties that we do business with, as well as on the internal procedures we have in place.

The following training has been designed to ensure that everyone has a basic understanding of the Act and their responsibilities under it. Additional training will also be offered to colleagues in areas of the business that are specifically affected by the Act.

 

You are reminded that failure to comply with the Policy could expose the company to a conviction under the Act and could be extremely damaging to the business.  Any failure to comply with the policy will therefore be treated as a serious disciplinary offence. Individuals convicted of bribery also face a maximum sentence of 10 years imprisonment and an unlimited fine. It is in all of our interests to ensure that we comply with this important piece of legislation.

 

Andy Blundell

Chief Executive

This compliance training has been designed to give you an overview of the bribery laws in the UK; how it applies to our business and how it could affect your working life. It is designed to help you to be able to identify and avoid the sorts of activities that might constitute bribery. It is designed to supplement our Bribery policy, which is accessible in the Group Policies section of our intranet.

If, after completing the course, you are uncertain about how bribery law applies to your day to day business activities, please speak to your line manager or contact the legal department.

Ignorance of the law is no defence.

1. INTRODUCTION

WHY IS ANTI-BRIBERY TRAINING IMPORTANT?

The risks of bribery: Corruption is a real and present risk

• The risks of bribery and corruption in marketing services can arise in a variety of ways:

– Gifts and Hospitality

– Third party relationships such as suppliers, agents and distributors

– Interaction with the public sector

– Merchandising

– Dealings in other jurisdictions

The risks of bribery: Severe consequences

•There are severe consequences for involvement in bribery for both you and the Company.

• Individuals i.e. you, may face:• a prison sentence of up to 10 years and/or an unlimited fine;• loss of job; • loss of reputation – you may not be able to get another job if you have had a conviction; and• dismissal from any professional/trade association.

• Businesses i.e. the Company, may face:• criminal prosecution and an unlimited fine;• loss of reputation;• loss of business; and • debarment from tendering for public contracts.

• People often become involved in bribery because they do not understand it is actually bribery. They may think:– the activity isn't criminal; – the activity is usual business practice or local custom/common practice in the country in which they are operating; and – if they have been ordered by someone more senior to carry out a particular activity that it is therefore acceptable, or they

are not prepared to challenge their more senior colleague/manager in relation to it.

• All of the above are common misconceptions. If you justify any bribery activity on the above basis you are putting both yourself and Communisis in grave danger of investigation and prosecution

Overseas corruption and UK approach

Combating bribery at home and abroad

•There is both a moral and a practical imperative for tackling bribery whether it occurs at home or abroad. Whilst the Bribery Act is a UK law, it also allows the UK prosecuting authorities to prosecute individuals and companies for offences committed overseas by those individuals and businesses. – Those at risk include British citizens, British nationals, anyone who usually resides in the UK and any company incorporated in the UK.

•Most countries will have their own anti-corruption laws and an offence under the UK Bribery Act is also likely to be an offence in a foreign country if committed there.

•Note: as will be looked at later, UK businesses will also be liable for corrupt acts of any person performing services on their behalf.

UK commitment to compliance

• The main UK prosecuting authority for the most serious cases of corruption, the Serious Fraud Office, has publicly stated its intention and commitment to vigorously enforce the Bribery Act, US-style. It is committed to acting as a deterrent to bribery by presenting a credible threat of successful investigations and prosecutions in the fight against bribery.

• Recent cases have demonstrated that the UK courts will be looking to impose far greater levels of fine and other penalties than previously, even where companies have come forward voluntarily to report wrongdoing they have uncovered.

IGNORANCE OF THE LAW IS NO DEFENCE

2. THE BRIBERY ACT: OFFENCES AND DEFENCES

Objectives

By the end of this section you should have a good understanding of:

•The purpose of the Bribery Act 2010•The bribery offences• Possible defences

What is the purpose of the Bribery Act 2010?

Corrupt business practices pose a serious risk to the longer-term sustainability of business.

The Bribery Act makes it easier for the police and the prosecuting authorities, such as the Serious Fraud Office and Crown Prosecution Service, to investigate and bring prosecutions.

The Act shows the UK's commitment to getting tough on bribery and corruption and eradicating it from business practices.

The Act sets out four distinct offences of bribery and three possible defences.

What are the bribery offences?

Active bribery i.e. bribing someone. This means:

• Offering, promising or giving a financial or other advantage to another person, to either:

• induce that person to perform improperly a relevant function or activity; or

• reward a person for the improper performance of a function or activity.

• It is also an offence if you know or believe that acceptance of an advantage by another person is in itself an improper performance of their function or activity.

• Bribes are often paid through intermediaries or "middle men" as they are more difficult to detect and traditionally have been more difficult to prosecute. The Bribery Act catches not just direct bribery but also indirect bribery including the use of intermediaries and middle men.

Important note:

•It does not matter whether the person given the bribe is the same person that performs the function or activity.

•It does not matter if the advantage is offered, promised or given through someone else.

What are the bribery offences?

Passive bribery i.e. being bribed. This means:

• Requesting, accepting or agreeing to receive a financial or other advantage to perform a function or activity improperly.

• It is also an offence:

– Where your request or receipt of the advantage is in itself an improper performance of a function or activity;

– Where your request or receipt is a reward for your or someone else's improper performance in the past;

– Where your improper performance takes place in anticipation or as a consequence of a request or receipt of an advantage.

• In these other scenarios, it does not matter whether you know or believe that the performance of a function or activity is improper.

Important note:

•It does not matter if the recipient of the bribe requests or receives it directly or through someone else.

•This means that as well as direct bribery, indirect bribery and the use of "middle men" are also caught by the Act.

What are the bribery offences?

Bribery committed outside of the UK

• You may as part of your employment travel abroad on business.

• You may think that any act of bribery overseas may not be caught by the UK law. You would be wrong.

• The Bribery Act covers acts of bribery committed overseas by any British citizen, British national (overseas), a British overseas citizen, and anyone who usually lives in the UK (even if they are not a UK national or citizen).

• Businesses which are incorporated in the UK are also caught by the Act if they commit bribery overseas when conducting business.

What are the bribery offences?

Directors and Senior Officers: Separate Liabilities

• Directors and senior management can also be held personally liable if bribery offences are committed by the company with their "consent or connivance“ (i.e. they agree to or turn a blind eye to wrongdoing).

• If directors and/or senior managers turn a blind eye they may be personally liable – even if they have not expressly been told or informed about any corrupt activity.

• Deliberately avoiding making enquiries or taking reasonable preventative action is not acceptable.

• If directors and/or senior managers become aware of offences being/having been committed or become suspicious that offences may be/have been committed then they must report their concerns and/or investigate in line with the Company’s bribery policy.

• All directors and senior managers are also responsible for fully investigating and/or reporting on matters reported to them by employees in line with the Company’s bribery policy.

What are the bribery offences?

Bribery of a Foreign Public Official

• There is an additional offence of bribery of a Foreign Public Official (FPO).

• This offence is the offer, promise or gift of a financial or other advantage to an FPO:

– directly or through a third party;

– TO INFLUENCE them in their capacity as a FPO;

– to obtain or retain business, or a business advantage.

• Note: There is NO REQUIREMENT (unlike the earlier bribery offences) to prove that the FPO was induced to or did perform their functions improperly.

Important note:

• For all the bribery offences, it is no defence to argue that a bribe was permitted by local custom or culture.

•There is a very limited defence available only if the written law applicable in the overseas jurisdiction permits a particular act.

What are the bribery offences?

Corporate failure to prevent bribery

• A commercial organisation may be guilty of an offence where:– a person associated with the organisation commits an act of bribery;– with the intention of obtaining or retaining business or a business advantage for the organisation.

Important note:•Commercial organisations will be strictly liable for acts of bribery committed on their behalf by “associated persons” - regardless of whether they were aware or not.

•The acts of bribery can take place anywhere in the world.

•Anyone performing services (in any capacity) for or on behalf of a commercial organisation is an "associated person“. This means that a commercial organisation can be held liable for the acts of its employees, agents, contractors, consultants, joint venture partners and subsidiaries.

What are the bribery offences?

Continued

•A commercial organisation will have a defence if it can show that it had adequate procedures in place to prevent bribery.

• A commercial organisation is either a UK based company or partnership, or is a company or partnership which carries on a business or part of a business in the UK. This means that certain overseas companies could also be prosecuted under the Bribery Act.

•In Section 4, we will look at this offence and the adequate procedures defence in more detail.

Corporate failure to prevent bribery

What defences are available?

There are only three defences permitted under the Act:

• Bribery is specifically authorised by some written law: it is unlikely that any written law would authorise bribery. Mere local custom or practice is no defence.

• The conduct is necessary for proper exercise of any function of an intelligence service or the armed forces when engaged on active service. This is not relevant to Communisis.

• Corporate failure to prevent bribery can be defended if the organisation can show it had adequate procedures to prevent bribery in place: the corporate offence together with the potential defence of adequate procedures will be looked at in more detail in Section 4.

Ignorance of the law is NO defence

Summary

• You have now reached the end of this Section.

• This Section has covered the following points:

– The purpose of the Bribery Act 2010– The bribery offences– Possible defences

• Please proceed to Section 3

3. FURTHER TOPICS

IMPROPER PERFORMANCE AND WHAT IS A "BRIBE"?

Objectives

• By the end of this Section you should have a good understanding of:

– What is meant by the term “improper performance” in relation to the active and passive bribery offences

– What is meant by the term "bribe“

– When a bribe can occur

– Some examples of bribery in the marketing industry

What is improper performance?

• In Section 2, we saw that two offences rely on the concept of “improper performance”

– Active bribery (paying a bribe)– Passive bribery (receiving a bribe)

• For these offences, a bribe is the offer, promise, gift, request, acceptance or receipt of a financial or other advantage to induce a person to perform a function or activity improperly or reward a person for the improper performance of a function or activity.

• In addition, sometimes the giving or receiving of a financial or other advantage is in itself improper, without the need for someone to perform any other function or activity.

• In all the above, improper performance has the following components:– It must relate to a function or activity where there is an expectation that this will be carried out in good faith or

impartially; or arising from a position of trust – There must be a breach of this expectation. This means the function or activity is (or would be) performed in breach

of what a reasonable person in the UK would expect in relation to the function or activity concerned.

• In other words, what somebody outside of the UK would expect is not taken into consideration. The test is what someone in the UK would expect. Put another way it does not matter what local custom and practice is.

Function or activity

• Functions or activities covered by the active and passive offences under the Bribery Act include:

– All functions of a public nature;

– All activities connected with a business, trade or profession;

– Any activity performed in the course of a person's employment;

– Any activity carried out on behalf of a body of persons

• These offences therefore apply to corrupt acts involving businesses (commercial bribery) as well as bribery of government officials (public sector bribery).

Important notes

• The active and passive offences of paying or receiving bribes are about conduct rather than actual outcomes.

• This means an offence will be committed even if:

– the person who was offered or received the bribe does not actually carry out the function or activity improperly;

– the offer or request for a bribe is declined (the person making the offer or request is still guilty of an offence);

– the bribe was offered but not in fact paid;

– the individual making or requesting the bribe did not benefit personally, but was acting in the interests of their company, and/or acting on the instruction of another and/or was acting in order to benefit another third party.

 • The acceptance of an offer, request or receipt of a bribe can in itself amount to improper performance of a function or

activity.

KEY PRINCIPLES

• Do not make payments to someone (or favour them in any other way) if you know that this will involve someone in misuse of their position.

• Do not misuse your position in connection with payments (or other favours) for yourself or others.

What is a bribe?

• A bribe can be any “financial or other advantage”.

• It not necessarily just a straight cash payment – it can be any type of benefit. For example it can include:

– gifts

– donations

– corporate hospitality and entertainment

– the promise of future work or employment

– the award of a contract

– some other intangible benefit

• "Facilitation payments" cause particular difficulties. A facilitation payment is a certain type of payment to government officials in order to secure their performance of a routine function, such as to allow you to pass through customs.

• Facilitation payments are bribes under UK law. However, in some jurisdictions, anti-corruption laws can make certain exemptions for these types of payment. No exemption applies under the Bribery Act.

• There has also been considerable debate on whether corporate hospitality may infringe the Bribery Act. We will look at this later in this section.

Facilitation Payments

• Broadly speaking, a "facilitation" or "grease" payment is a payment to a foreign official, political party or party official for "routine governmental action" - such as processing papers, issuing permits, and other actions of an official – for example, in order to expedite performance of duties of non-discretionary nature (i.e. which they are already bound to perform). The payment is not intended to influence the outcome of the official's action, only its timing.

• In the UK facilitation payments are classed as bribes and are illegal.

• Examples of when such payments may be requested include:

– To obtain or expedite a permit, licence or other official document or approval– To obtain or expedite the loading and unloading of goods at a port or airport– To secure police protection for a site against risk of theft or arson– To facilitate mail pick-up and delivery– To facilitate provision of utilities to a site, such as connecting water, electricity, gas or telephone services – At border controls or crossings to allow safe or prompt entry or exit from a jurisdiction

• Facilitation payments should be contrasted with official, lawful payments (typically to an organisation rather than an individual) to expedite certain functions (e.g. where there is a choice of fast track services to obtain a passport).

• However, if an employee is in fear for their safety or at risk of loss of liberty, they should not refuse the demand for a payment.

Corporate Hospitality

• Corporate hospitality can also present problems.

• In the US there is a "promotional expenditure" defence but there is no such defence in the UK and so technically there is a risk of an offence being committed when corporate hospitality is offered/accepted.

• However, modest corporate hospitality (not extravagant or lavish), which is not intended as a bribe, will not be caught.

• Government Guidance has also confirmed that most normal corporate hospitality is not intended to be caught by the Bribery Act. This means there should be no difficulty with hospitality intended to foster or enhance:

– reasonable public relations – cordial business relationships – knowledge of organisation

Provided there is no intention to induce improper performance

• All employees should refer to the company’s gifts and hospitality policy when offered or wishing to offer corporate hospitality.

When can a bribe occur?

• As explained in Section 1, marketing services is particularly exposed to risk of bribery in certain areas:

– Gifts and Hospitality

– Third party relationships such as suppliers, agents and distributors

– Interaction with the public sector

– Merchandising

– Dealings in other jurisdictions

Summary

• You have now reached the end of this Section.

• This Section has covered the following points:

– What is meant by “improper performance”

– What is meant by the term "bribe“

– An introduction to Facilitation Payments

– Corporate hospitality and the Bribery Act

– When a bribe can occur in the marketing sector

• Please proceed to Section 4

4. CORPORATE OFFENCE OF FAILURE TO PREVENT BRIBERY: IN DETAIL

Objectives

• By the end of this Section you should have a good understanding of:

– The corporate offence of failure to prevent bribery

– The "adequate procedures" defence

– Key principles for bribery-free business practice

– Examples of practical steps to ensure adequate procedures are in place

What is the corporate offence?

• A relevant commercial organisation is guilty of an offence if:

–a person associated with the commercial organisation

–bribes another person

–with the intention of obtaining or retaining business or a business advantage for the commercial organisation.

• Any business that is incorporated in the UK or any business incorporated outside of the UK but which carries on a business or part of a business in the UK is caught by the Act.

What is the corporate offence?

• Any person who performs services for or on behalf of the Company in any capacity is caught by the Act. Therefore, it is not just employees who are caught by the Act. Also covered are:

–agents;

–subsidiaries;

–consultants;

–sub-contractors; and

–joint venture partners.

• If that person commits bribery for the benefit of the Company, the Company is potentially liable for their acts even if it was unaware of the activities being undertaken or did not order or condone any such activities.

What is the corporate offence?

Example

• Bribes are often paid through or by agents. A company in the UK may be acting under the false impression it is legitimately using an agent to help it win or develop business in a foreign country. However, the agent may in fact be claiming an excessive fee for exaggerated services provided, and using all or part of the fee to pay a bribe used to secure the contract.

• In this scenario, under the Act, the company in the UK would be liable for failure to prevent an act of bribery – even if it had no knowledge of the actions of the agent at the time, unless the company can prove it had adequate procedures in place to prevent the bribery from happening.

What is the "adequate procedures" defence?

• As was referred to in Section 2, a commercial organisation will have a defence to this offence if it can prove that it had adequate procedures in place to prevent acts of bribery occurring.

• On 30 March 2011, the UK Government published Guidance on adequate procedures to prevent bribery. This Guidance was not a prescriptive set of rules. Instead it set out six principles for commercial organisations to consider in relation to their anti-corruption compliance programme. The six principles are set out below:

Monitoring and Review

Adequate Procedures in practice

• The Guidance makes clear that commercial organisations can approach anti-corruption compliance proportionately to the potential corruption risks faced by their organisation.

• As an overview of what the six principles in the Guidance mean, below are some examples of what a company may decide to put in place as part of its adequate procedures.

– Top level commitment: a company sets a tone of zero tolerance towards corruption from board level; senior officers are nominated to take on responsibility for implementing anti-corruption compliance and maintain an oversight during the process; there is a clear articulated commitment to establishing a bribery free culture, which is also communicated to external partners;

– Risk assessment: the company establishes procedures to assess risks of bribery arising on an on going basis. The assessment considers country risks, sector risks, transaction risks and business partnership risks (amongst others), along with any risks with its own internal processes or procedures leaving the company vulnerable to corrupt acts by others.

– Proportionate procedures: the company puts in place policies and procedures which are clear, practical, accessible, effectively implemented, and enforced. This may include an anti-corruption policy; revised procedures for gifts and hospitality, charitable giving, political donations and employee expenses; and reforming the staff code of conduct or handbook. The company may also update its employment procedures and contracts to include contractual obligations in relation to bribery and which permit the company to discipline and/or dismiss any employee found to be committing (or have committed) acts of bribery

Further examples continued on next slide...

Adequate Procedures in practice

• The company also decides to adopt the following steps under the other principles of the Government Guidance:

– Due Diligence: the company puts in place procedures to assess its business relationships – including suppliers, agents, intermediaries, sub-contractors, consultants and joint ventures. For higher risk relationships, it gathers information from the service provider about its composition and activities, the detailed nature of the services it intends to provide, and other compliance information; the company then takes steps to verify the information and conducts its own enquiries independently before deciding whether to engage the service provider. The company also decides to include various anti-corruption clauses in its commercial contracts with suppliers, contractors etc. that strictly prohibit any acts of bribery and e.g. allow the company to terminate those relationships in the event third parties acting on its behalf are found to be committing (or have committed) acts of bribery;

– Communication (including training): the company provides its staff with regular training and updates on anti-corruption issues; it also develops and implements confidential whistle blowing procedures for reporting suspected bribery; as well as promoting a culture where employees know that they can report any suspicions of corrupt activity without fear of suffering any detrimental effect for doing so.

– Monitoring and review: the company ensures that feedback mechanisms and internal audit processes are in place which support the continuous review and improvement of its anti-bribery programme. It also commits to fully and properly investigating any allegations of corruption by appropriately qualified internal or external individuals.

Summary

• You have now reached the end of this Section.

• This Section has covered the following points:

– The corporate offence of failure to prevent bribery

– The "adequate procedures" defence

– Examples of how a company might implement adequate procedures by reference to six principles in the Government Guidance.

• Please proceed to Section 5

5. REPORTING CONCERNS

Reporting concerns

• All employees should report any concerns that they have about bribery and corruption.

• In the first instance, you should raise any concerns with your line manager.

• If you feel that you cannot raise your concerns with your line manager Communisis has put in place a Whistleblowing Procedure that can be followed. Employees should refer to this procedure , which is located on the Intranet.

• Employees should note that Communisis will ensure that no-one is victimised or penalised as a result of raising a genuine concern.

Action points

• The Company is implementing a series of measures to improve or review its anti-corruption compliance procedures.

• All employees also have responsibilities in this area. This includes undertaking training as required by the Company from time to time , maintaining familiarity with all relevant company policies (including the bribery policy) and other procedures in this area and reporting any concerns they have about any potential corrupt activity.

• Andy Blundell has responsibility for the Group’s anti-corruption compliance programme. His email contact details are:– Email: andy.blundell@communisis.com

• All employees should not hesitate to contact Sarah Caddy on 0113 222 6513 if they have any queries relating to this training or other anti-corruption issues.

the Company does not tolerate bribery in any shape or form.

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