“One person in four has paid a bribe to a public body in the last year, according to a survey carried out in 95 countries by Transparency International.”

GlaxoSmithKline is currently feeling the heat with allegations that agents and sales representatives in China bribed doctors to prescribe GSK products.

But it is most certainly not the only company to have had allegations of bribery lodged against it. Nor it will be the last.

Bribery is an issue for all principals as the offence is widely drawn and catches a bribe paid by an agent who performs services on behalf of a UK business, whether the wrongdoing was committed in a foreign jurisdiction or in the UK. With agents and distributors abroad this is an issue that requires particular attention.

Facts

As part of China’s current anti-corruption drive, the Chinese Ministry of Public Security is investigating senior executives in the Chinese division of British pharmaceutical company GlaxoSmithKline for allegedly offering bribes to officials and doctors in order to boost company sales. Reports suggest that sales agents of pharmaceutical giant GSK were trained to build relationships with doctors by offering money and “catering to their pleasures”, in return for prescribing GSK products.

The allegations suggest that a total of £320m was spent in the form of bribes, which has helped bolster GSK’s £750m a year of annual sales in China. The chief executive, Sir Andrew Witty, said the allegations were “shameful” and pledged to co-operate with Chinese authorities. Notably, GSK have now hired a new boss of its Chinese division. In addition it is possible that GSK will also face charges in the UK under the Bribery Act.

The only defence to a criminal offence under the Act is for a UK corporate to show that it has in place "adequate procedures", systems and controls to prevent bribery and corruption. Ultimately this is the responsibility of senior management.

It is a responsibility which needs to be discharged as the maximum sanctions are 10 years’ imprisonment and/or an unlimited fine for individuals and unlimited fines for a corporate.

Prevent Bribery

To ensure that you do not fall into the trap which it is alleged GSK has, it is imperative that you establish "adequate procedures". This is particularly so if you sell overseas as you may face liability under the Bribery Act as well as local sanctions.

Practical tips

1.  Proportionality

Commercial organisations must undertake regular and comprehensive assessments of the internal and external risks they face, the nature and frequency of which will and can vary. 

Any action taken should be proportionate to the risks faced and the nature of those risks, and to the size of the business and the scale and complexity of the activities involved. Such actions should be clear, practical, accessible, effectively implemented and enforced. It may be necessary to do more to prevent bribery if your organisation is large, or if you are operating in an overseas market where bribery is known to be commonplace.

2.  Top-level commitment

There must be a clear commitment to counter bribery in the management structure of an organisation and this must be embedded to establish a culture in which bribery is never accepted.

This commitment against bribery should be clearly communicated from the top to all levels of an organisation and to any relevant external parties. Businesses should also consider publishing a statement of their commitment to counter bribery. Government guidance emphasises that those at the top of an organisation are in the best position to ensure their organisation conducts business without bribery. It is necessary to demonstrate that a business has been active in making sure that staff (including any middle management) and the key people who do business with that business understand that bribery is not tolerated.

3.  Risk assessment 

As bribery and corruption risks may evolve over time, it is also imperative that risk assessment procedures take account of any new risks which may be posed by a particular country, transaction or business partner of the organisation.

Due attention must be paid to existing and potential markets operated in and third parties dealt with, especially if a corporation is entering into new business arrangements in new overseas markets.

4.  Due diligence

Knowing exactly the parties an organisation deals with can help to protect an organisation from taking on people who might be less than trustworthy.

Due diligence enquiries should cover all parties to a business relationship, including the organisation’s supply chain, agents, distributors, joint venture partners and all markets in which the organisation does business. Enquiries should also be made about the risk of bribery in a particular country, the types of bribery most commonly encountered, and the preventative measures which are most effective.

5.  Communication

Organisations are required to have in place clear, practical and accessible policies and procedures to counter bribery, and must communicate these to staff and to others who perform services.

This will enhance awareness and help to deter bribery by making clear the basis on which your organisation does business. You should consider incorporating such policies into employment and service contracts.

6.  Monitoring and review

Anti-bribery and anti-corruption policies must be viewed as dynamic and not static, to account for the evolution of risks currently faced by an organisation and the effectiveness of procedures over time.

To ensure compliance with the relevant policies and procedures and to identify any issues as they arise, organisations need to institute mechanisms for reviewing those policies and procedures at regular intervals.

Register for updates

Search

Search

Portfolio Close
Portfolio list
Title CV Email

Remove All

Download