Bribery and corruption can have a serious impact on the socio-economic development of a country, as well as for the other businesses who don’t engage in those crimes. Take a look…

In the UK, the scale of bribery and corruption is significant at both a government and corporate level. These crimes create a major distortion of trade, and undermine democratic markets where businesses are all subject to the same rules.

If you’re involved in bribery or corruption, you’ll face serious consequences if it comes to light. So, you should seek white collar defence to find out where you stand.

In this post, we’re going to give a brief overview of bribery and corruption, and the consequences both on the economy and the companies who engage in these crimes. Read on for more information…

What Are Bribery and Corruption?

Before we discuss the consequences of these crimes, we’re going to briefly explain what they are, as defined by UK law.

What is Corruption?

Corruption is a broad set of crimes that involve “the abuse of entrusted power for private gain.” Some of these crimes are common, and grudgingly accepted as just the price of doing business. Others actively stifle competition and subvert the free market.

These are the 3 main types of corruption:

  • Bribery: accepting money or goods in return for preferential treatment.
  • Fraud: engaging in illegal and dishonest activities to provide financial advantages to an individual or business.
  • Embezzlement: taking a company’s goods or funds for personal gain.

What is Bribery?

Bribery, as you can see from the above list, is a type of corruption that involves the offering or accepting of any loan, gift, payment, advantage or reward for personal gain. Examples of bribery include:

  • Paying someone for a faster or better service, e.g., to clear goods or to receive a certification.
  • Paying to gain advantage in public procurement processes, i.e., governments or state-owned enterprises procuring goods, services and works.
  • Offering, providing or receiving gifts, hospitality and entertainment or other valuable items such as sponsorships and internships for personal gain.
  • Providing or receiving levels of hospitality disproportionate to a typical business transaction.

Bribing someone is a strict liability offence that could damage the reputation of a company or employee. To be legally compliant, your business must have a zero-tolerance approach to bribery, or you could face serious consequences.

What Are the Consequences of Corruption and Bribery?

Now that we’re acquainted with the legal definitions of corruption and bribery, it’s time to look at the consequences of being involved in these crimes.

Corruption

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The most noticeable consequence of corruption is the damage it does to a company or individual’s reputation. For companies and public bodies especially, it can affect the perception of the business by the public and other businesses.

Once the public trust is broken in a company or government body, it’s difficult to come back from, and the stain of these crimes going public might never be removed.

The other consequences of corruption are financial, as the government can issue hefty fines against those who engage in it. An individual can even find themselves issued with a 12-month prison sentence, depending on the level of the crime committed.

To avoid being involved in corruption, try not to work with agents, distributors or overseas partners who:

  • Refuse to go through a due diligence procedure
  • Ask for a substantially high commission or fee compared to the market standard
  • Require you to use specific suppliers without making a good business case for it
  • Refuse to sign a written agreement or have a contract of any kind
  • Request that payments be made into an offshore account, in cash, or to a charity

Bribery

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With bribery being a more specific crime than general corruption, the consequences are much easier to understand.

If you’re found guilty in a court of law you could face up to 10 years in prison, or an unlimited fine based on the level of the crime. A company would be also be subject to prosecution and liable to pay a fine.

Back in January 2020, Airbus was forced to pay a record £3bn in fines for paying huge bribes on an endemic basis to land contracts in 20 countries. This shows the true power of the ‘unlimited fines’ you could be forced to pay if you’re found guilty of bribery.

Even when the bribery isn’t found out and tried in court, it can still affect the reputation of an individual or company in any of the following ways:

  • Reputational damage: companies with poor anti-bribery and corruption compliance draw less business from other companies because they’re not seen as trustworthy.
  • Financial damage: if you become known as someone who engages in bribery, you will be actively shunned by the rest of the working world as they are all committed to working in a society that promotes free markets over monetary gain at any cost.
  • Reduced employee morale: employees who know they work for a corrupt company will feel like criminals and will be less likely to work hard or honestly. They might even lie to you about their work practices, which could see your business crumble.

To avoid being convicted of bribery, or suffering reputational and other financial damage, try not to work with:

  • Agents and distributors who could pay bribes on their partner’s behalf, i.e., if they engage in bribery, you could be complicit as their partner.
  • Anyone who offers small bribes for routine services, known as facilitation payments.
  • Officials who expect to be paid for a service they are obliged to perform anyway, for example obtaining customs clearance, licences and permits that you should already be entitled to.
  • Hospitality that goes above and beyond what you’d expect to get for the money you’ve paid including sponsorships, donations and internships.

Are the Consequences of Bribery and Corruption Worth the Risk?

In this post, we’ve discussed what bribery and corruption are, and how they can affect individuals and businesses both financially and reputationally.

The risks are hardly worth the reward if you get caught or become known as a corrupt business to people who might otherwise work with you. 

On top of that, the prison sentence for bribery is steep and with unlimited fines that can go above and beyond £3bn. You can make up your own mind as to whether it’s worth the risk or not.