Bribery and Corruption
For many years it has been an offence to make any gift or other consideration to a public official, or an employee in the private sector as an inducement or reward for that person doing or not doing an act in relation to his principal's affairs or business. It does not matter whether the bribe is accepted or acted upon.
Since February 2002, it has been illegal to bribe a person even if they have no connection with the UK. This applies in all situations where the bribe constitutes an offence in the UK, even if the act is permitted in the country where it takes place. So, for example, where "facilitation payments" are permitted in other countries, they would still constitute an offence under UK anti-bribery legislation.
The Bribery Act 2010 ("the Act") consolidated existing bribery legislation and created a new offence of 'failing to prevent bribery', which applies to commercial organisations, or those performing services on their behalf. The Act covers bribery both in the UK and overseas. As are result, the Act is highly relevant both to London P&I and its Managers, as well as to third parties with whom London P&I and its Managers have dealings, e.g. Members, Assureds, correspondents, lawyers and surveyors.
The Act defines four criminal offences:
Giving, promising or offering a bribe.
Requesting, agreeing to receive or accepting a bribe.
Bribing a foreign public official.
Failure by a company to prevent active bribery being committed on its behalf.
There is no requirement of 'fault' on the part of the commercial organisation in proving an offence under the Act. For example, it does not matter that senior management in an organisation did not participate in, know about, or even suspect that persons associated with the business were giving bribes, an offence may still be committed. It will be a defence for the organisation to demonstrate that it had 'adequate procedures' to prevent its associated persons from giving bribes. The offences carry potential criminal penalties for both London P&I, its Managers and individuals.
London P&I and its Managers are committed to maintaining the highest business standards and has a zero tolerance approach to bribery and corruption. This extends to all business dealings, transactions in all countries and to all business counterparties including any individual or organisation doing business with London P&I or its Managers. Please see our Bribery & Corruption Prevention Policy for more details.
How you can help London P&I prevent bribery
All our staff and all who deal with London P&I have a responsibility to prevent, detect and report bribery. We provide appropriate guidance to our staff in fulfilling this duty. Beneath you will find useful information for our Members, correspondents and service providers. The Bribery Prevention Information Sheet is also available to download.
A summary of the provisions of the Act and how they affect you is included in the Bribery Prevention Information Sheet. As with any summary, not all possible issues that might arise are covered. We appreciate that written laws (particularly those from foreign countries and/or in another language) may be difficult to fully understand but if you have any questions as to the applicability of the UK Bribery Act (“the Act”) in any given circumstances, it may help you to refer to the Act itself in the first instance - Click here for the Act. If that does not resolve your query, you should consult with the Managers.
All references to section numbers in the information sheet are, unless otherwise stated, to the Bribery Act 2010.
Examples of bribes or facilitation payments with public functions are included in the table below as these may be disguised as 'miscellaneous expenses' or more imaginary descriptors within a claim invoice.
Public Function | Service or actions to which the bribe payer is entitled | Improper actions by the official or employee |
Customs | Inspection, release of goods, temporary import permits, classification of a product. | Exemption from inspections, falsification of documentation for contents and weight, overlooking improperly prepared or incomplete paperwork. |
Maritime | Vessel clearance, loading and unloading cargo, canal transits. | Approval of incomplete documentation. Improper allocation of priority clearance and delivery, misclassifying contents. Threat of unnecessary delay or other undesirable outcome. |
Any | Service fees are permitted by a government, per diems and cash payments paid direct to officials for carrying out activities or expenses incurred for the Vessel such as inspections associated with contract performance or onward transit of goods. | Services outside the official’s or employee’s permitted or assigned work. |
Government: National, federal, local | Granting of permits, licenses, certification, health and safety, fire regulation, inspections. | Overlooking abuse of regulations e.g. dumping unauthorised waste. |
Police | Protection and security services, waiving fines. | Concocted offences, harassment, and improper issue of security documents. |
Interior Ministry | Border control, visas, residency and work permits, medical certification. | Overlooking incomplete or improper documentation. |
Courts | Access to or speeding up of court processes and documentation. | Abuse of judicial process e.g. losing documents, illegal access to records. |
Revenue and Customs | Release of tax or VAT refunds, approval of returns, books and documents. | Overlooking errors or offences. |
This list is provided by the Serious Fraud Office (SFO) and is not exhaustive as the ingenuity of those involved in corruption knows no bounds!
Abnormal cash payments.
Expense payments made in round sums or excessive for role.
Pressure exerted for payments to be made urgently or ahead of schedule.
Payments being made through 3rd party country, e.g. goods or services supplied to country 'A' but payment is being made, usually to shell company in country 'B'.
Abnormally high commission percentage being paid to a particular broker. This may be split into 2 accounts for the same broker, often in different jurisdictions.
Private meetings with public contractors or companies hoping to tender for contracts.
Lavish gifts being received.
Individual never takes time off even if ill, or holidays, or insists on dealing with specific contractors him/herself.
Making unexpected or illogical decisions accepting projects or contracts.
Unusually smooth process of cases where individual does not have the expected level of knowledge or expertise.
Abusing decision process or delegated powers in specific cases.
Agreeing contracts not favourable to the organisation either with terms or time period.
Unexplained preference for certain contractors during tendering period.
Avoidance of independent checks on tendering or contracting processes.
Raising barriers around specific roles or departments which are key in the tendering/contracting process.
Bypassing normal tendering/contractor’s procedure.
Invoices being agreed in excess of contract without reasonable cause.
Missing documents or records regarding meetings or decisions.
Company procedures or guidelines not being followed.
The payment of, or making funds available for high value expenses or school fees etc. on behalf of others.
Agents or other third parties do not want our employees to be present at negotiations or interactions with officials.
Should you hold any suspicion of bribery or attempted bribery committed by or against an employee, agent or other party acting on behalf of the Club, it must be reported immediately to Mike Furlepa, Head of Risk & Compliance.
Email: [email protected]