Partners in crime? The pitfalls and risks in the new anti-bribery regime
A recent collaboration between two members of Meritas, Isle of Man firm Laurence Leenan Advocates and Solicitors and Central London firm Howard Kennedy Fsi hosted a training session in respect of the new anti-bribery regime in the Isle of Man. The training was presented to a mixed audience of lawyers, accountants, corporate service providers, compliance and banking personnel, by Dan Hyde, who has specialised in high-value commercial fraud and complex city crime, and Hannah Bradshaw who specialises in compliance matters. The presentation was designed to highlight the legislation which is predominantly designed to criminalise bribery and to apply very stringent penalties for any offences.
They were joined by Tim Kendal, a leading business crime barrister of Bedford Row, London, who gave a comparative overview of the Isle of Man legislation as against that in force in the United Kingdom. Mr Kendal reviewed the Island’s legislation and revealed the main sections of the Isle of Man Bribery Act 2013 were in fact identical to the Bribery Act 2010 (UK).
Mr Kendal addressed the one significant difference in the legislation on the Isle of Man, namely that public officials in the Isle of Man have a duty to report their suspicions to the authorities if they believe that bribery has taken place. In considering Manx parliamentary debates on the topic Mr Kendal considered that it could be down to the size or nature of the jurisdiction in the Isle of Man stating ‘I have looked at the debates in your parliament to discover why that would be. But it may be that in a much smaller community the relationships between persons here are closer, more difficult to confront by way of whistleblowing, I don’t know.’ In the Isle of Man there is a clear duty upon the public officials to report to a proper authority, be that his employer, or a police constable. Any failure to disclose an offer or advantage that may constitute an offence under the Bribery Act 2013 in itself means that public official commits an offence.
The serious nature of the legislation and indeed it’s penalties were pointed out by Mr Kendal. They are far reaching and carry very significant penalties, namely 10 years custody and heavy fines. Mr Kendal expressed a view that the legislation in the Isle of Man had been somewhat finessed.
The implications and ramifications of the legislation were highlighted by Mr Kendal, who confirmed that the legislation had a very far reaching effect, noting ‘It makes no difference whether the function or activity is connected with or performed in the IK, the Isle of Man or abroad.’ He continued ‘it does not matter if the person you are bribing is here in Douglas or Dubai.’
Both Mr Kendal and Mr Laurence Keenan of Laurence Keenan Advocates and Solicitors strongly recommended to the audience that the legislation be urgently read, considered and controls implemented. Comparisons were drawn in respect of the regular business practice of proportionate promotion and hospitality, as against disproportionate gifts, offers or advantages. Mr Kendal warned that any such offer or advantage should always be proportionate perhaps suggesting that indulgent client entertaining, holidays, VIP experiences or otherwise could in some instances fall foul of the law if their intention was to induce or reward someone.
In the contextual background of the legislation, Ms Bradshaw gave an insightful presentation on the practicalities of the legislation and the implementation of appropriate procedures in the workplace, to minimise the risks of non compliance on behalf of clients. Echoing the sentiments of Mr Kendal, Ms Bradshaw reviewed the relevant guidance published with the Act, which she also considered was easier to follow and implement than that of its UK counterpart.
She said businesses in the Island could take practical steps to protect themselves from falling foul of the law by:
l Assessing the risks of their business’s susceptibility to and from bribery.
l Draw up a comprehensive anti-bribery policy and procedures, keep these under review and test them.
l Foster a culture of zero tolerance from the management level down and communicate this internally and externally.
l Undertake careful due diligence before working with third parties.
l Reassess the risks when moving into new markets.
l Provide training.
Clearly there is an opportunity now for businesses to implement appropriate controls. Mr Keenan concluded with a short summary and asked the audience to consider and read the legislation in detail. He said ‘In this case the Act focuses on obligations of the individuals . We can’t just sit by passively. Particularly those of you involved in administration, who are directors of companies etc.’
There is planned a follow up session which will focus on implementing compliance procedures, specific case examples and guidelines. The training provided an opportunity for two Meritas members to put together a comprehensive overview of the legislation for the benefit of the delegates, bringing opportunities for further training to be presented, and the referral of compliance based work between the two firms.