Advice

Bribery and corruption: understand the risks

Doing business with integrity avoids risk and can help to build your company’s reputation and its commercial success.

Last updated 02 November 2020

Definitions of corruption and bribery

Corruption is defined by Transparency International as “the abuse of entrusted power for private gain.”

Examples of this are:

  • abuse of the power given to an individual by another person or organisation
  • activity that’s beyond the position or remit of a person
  • benefits obtained for an employee’s personal gain, rather than for their organisation

Bribery is a specific subset of corruption and is defined as the offering, promising, or giving of something to influence an official. Examples of this include:

  • payments to get a faster or better service, for example in clearance of goods or certifications
  • payments made to gain advantage in public procurement processes
  • offering, providing or receiving gifts, entertainment and hospitality or other items of value such as donations, sponsorships and internships
  • levels of hospitality disproportionate to a business transaction

Exposure to these risks varies significantly from one country to another. Researching thoroughly can help you act with integrity, protecting yourself and your company and avoiding risk.

Corruption: recognise risks and warning signs

Avoid working with agents, distributors or overseas partners who:

  • are reluctant to go through a due diligence procedure or provide the requested documents
  • insist that you use specific suppliers without making a business case for this
  • request a high commission or unusually large fees for your chosen market
  • have been found guilty of misconduct due to the nature of their relationship to a government official or other influential person
  • refuse to have a written agreement or sign a contract
  • requests that payments be made into an offshore account, in cash, or to a charitable cause

Bribery: recognise situations where you may be at risk

Working with business partners or associates

Working with agents and distributors is a popular route into a new market. But this can sometimes leave exporters vulnerable to corrupt practices, with third parties paying bribes on their partner’s behalf. The UK Bribery Act incorporates liability for the actions of your partners operating overseas.

Small bribe offers for routine services

These are also known as facilitation payments.

Payments to officials to perform routine functions they would be obliged to perform anyway are bribes. Legally required administrative fees or legitimately organised fast-track services are not. Risk areas for this type of activity include obtaining customs clearance and licences and permits, moving goods and ensuring brand protection.

Gifts, entertainment and hospitality

Although gifts, entertainment and hospitality are not prohibited under the Bribery Act, this is another issue that can cause difficulty in business circles. It requires sound judgement on the level of hospitality to offer, the way to provide it, and determination of the influence the recipient might have. Consider gifts as anything given of value - including sponsorships, donations and internships.

Generally, hospitality or promotional expenditure which is proportionate and reasonable to the business you’re doing is very unlikely to be considered corruption.

More information

Find more information on great.gov.uk on what you can do to manage risk of bribery and corruption.

Sources which explain general corruption risk, and those for particular situations and markets, include: