The Bribery Act seminar with the CBI

Bribery Act
7 April 2011

Philip Somarakis
Partner
philip.somarakis@bllaw.co.uk

How corrupt is UK PLC?

Transparency International Corruption Perception
Index

180 Countries Ranked – low score is good

UK ranked 11th 2005 (better)

UK ranked 20th 2010 (worse)

Main features of the Bribery Act 2010
General offences - bribing or receiving a bribe

Paying or offering to pay a bribe

Requesting or receiving a bribe

examples
Bribing a planning officer to grant you planning
permission

Planning officer asking you for a reward for granting
permission

Sometimes making the offer itself is enough

Corporate hospitality is ok provided it is reasonable
and proportionate

Bribing of Foreign Public Officials (FPO)

Cannot bribe overseas officials

Local written laws that permit investment in the local
economy or paying for training is acceptable

Facilitation payments are prohibited unless permitted
by local law

SFO will prosecute if payments are routinely made

Territorial jurisdiction
Rules relating to the two general offences and bribing
a Foreign Public Official
Offence committed if any act or omission takes place
in the UK
Offence committed if the person has a “close
connection” with the UK
Defined as a UK citizen, resident, company or
Scottish Partnership

Corporate offence of failing to prevent bribery
A relevant commercial organisation (C) is guilty of an
offence if a person (A) associated with C bribes
another person intending to obtain or retain:
business for C
an advantage in the conduct of business for C
Relevant commercial organisation :
UK company or partnership doing business here or
elsewhere
Overseas company/partnership carrying on business
or part of business here

Corporate offence of failing to prevent bribery
A relevant commercial organisation (C) is guilty of an
offence if a person (A) associated with C bribes
another person….
A person is associated with C (disregarding any
bribe under consideration) if A performs services
for or on behalf of C
Can be an agent, subsidiary or parent company but
will depend on all the relevant circumstances
An employee of C is presumed to be providing
services for C

Corporate offence – adequate procedures defence
C has a defence that it had in place adequate
procedures designed to prevent persons associated
with C from undertaking such conduct
Adequate procedures not defined in the Act but
Guidance now published to assist companies
Objective is to support businesses in determining the
sorts of bribery measures they can put in place
CBI has lobbied hard to get better clarification from
Government on the Act

Guidance on adequate procedures
Six principles which underpin Bribery Prevention:
Risk Assessment is first then

Top Level Commitment )
Due Diligence )
Proportionate Procedures ) Risk Mitigation
Communication and training )
Monitoring and Review )

Six principles
First – undertake a risk assessment
You must regularly and comprehensively assess the
nature and extent of risks relating to bribery which
you are exposed
No “one size fits all”
Skills of persons performing risk assessment
Internal risks - unawareness of staff of risks
External risks – Country, Transaction, Partner, Sector

Six principles
Top level commitment
The Board of Directors are committed to preventing
bribery
Publish statements of commitment to counter bribery
for internal and external communication
Appoint a senior person to oversee implementation of
anti bribery programme

Six principles
Due diligence
You have due diligence policies and procedures in
place which cover:
– all parties to a business relationship
– agents and intermediaries
– all forms of joint ventures
– all markets in which you operate

Six principles
Proportionate procedures
Revised Guidance much more conciliatory
Procedures and therefore resources expended need
to be proportionate to risks you face
Procedures should ensure that there is a practical
and realistic means of achieving your anti-bribery
policy
DHL example to follow

Six principles
Communication and training
Anti-bribery policies and procedures are embedded
and understood throughout the organisation
Appoint someone senior to oversee the
implementation
– Internal and external communication
– Method and timescale of training
Various methods of training
Arrangements for Monitoring
Penalties for breaching policy

Six principles
Monitoring and review
Monitoring and review mechanisms to ensure
compliance
Internal monitoring
Transparency is important
External auditors

Miscellaneous matters

The likelihood of a prosecution
– Resources
– Evidential Test
– Public Interest Test
– Must have regard to Guidance
Sentence
– 10 years imprisonment for an individual convicted of an
offence (NB senior officer liability where corporate
offence committed)
– Unlimited fine for company

Legal Services, UK & Ireland

CBI Presentation
Steven Fink
Southampton, Thursday 7 April 2011

Contents

1. Corporate Structure of DP DHL

2. Compliance within DP DHL

3. Bribery Act

• What have we done?

• Particular concerns/ implications

• Next steps

Steven Fink/ Southampton/ Thursday 7 April 2011 Page 19

Corporate structure: One company with two strong pillars

The postal service The logistics company
for Germany for the world

Steven Fink/ Southampton/ Thursday 7 April 2011 Page

Corporate structure

Corporate Center

Corporate
Functions

GLOBAL
FOR- SUPPLY
MAIL EXPRESS GBS
WARDING, CHAIN
FREIGHT


Corporate division EXPRESS (I)

DHL Express

• Express courier services using ground and air transport for
companies and private customers alike

• Widest reach in the industry, with own network covering
more than 220 countries and territories in Europe, Americas,
Asia/Pacific and emerging markets; and with a choice of
transit times in each market

• Core business comprises Time Definite and Day Definite
international transportation of conveyable shipments, door
to door

• Progressively more focused on industry-specific solutions,
among others for Technology, Life Sciences, Consumer
goods and Automotive sectors


Corporate division EXPRESS (II)

DHL Express

• 120,000 destinations in more than 220 countries and
territories

• Approx. 100,000 employees worldwide

• Over 8 million customers

• 6 main regional DHL Air Hubs:
Bahrain, Cincinnati, Hong Kong, Lagos, Leipzig, Miami

• Approx. 4,500 facilities worldwide

• Approx. 62,000 vehicles

• Global QCC: A Global Quality Control Center located at DHL
Express’ Head Office in Bonn

– Key functions: Real Time Shipment Management and
Crisis Command Center


Corporate division GLOBAL FORWARDING, FREIGHT (I)

DHL Global Forwarding

• World’s No.1 in air freight and ocean freight

• Presence in 150 countries and territories


• 810 terminals, warehouses and offices

• Air freight volume: approx. 3,700,000 t

• Ocean freight volume in TEU: approx. 2,600,0001)

• Business units and products:

– Air freight

– Ocean freight

– Industrial projects

– International Supply Chain Management


Corporate division GLOBAL FORWARDING, FREIGHT (II)

DHL Freight

• No. 2 in European road freight

• Presence in 53 countries and territories


• More than 160 terminals

• 2 million full truck load movements p.a.

• More than 40 million tons transported p.a.


– Full truck load

– Less than truck load

– Customs brokerage

– Intermodal transports

– Trade Fairs and Event Logistics

Corporate division SUPPLY CHAIN (I)

DHL Supply Chain

• World’s No.1 in contract logistics
• Presence in more than 60 countries and territories
• 2,400 logistic centers, warehouses, terminals
• Approx. 23 million sqm storage capacities worldwide
• Expertise in key sectors including fashion and retail, consumer
goods, technology, health care, automotive, chemical &
industrial
– Warehousing
– Distribution
– Managed Transport services
– Value-added services (e.g. packaging, technical
services, procurement)
– Business process outsourcing
– Supply chain management & consulting
– Lead Logistics Provider


Corporate division SUPPLY CHAIN (II)

Corporate Information Solutions

• Leading global provider of Corporate
Information Solutions

• Business Process Outsourcing solutions for the
largest organizations and companies with
international presence

• Transformation of business processes of
information and communication management in
a strategic and holistic way

• Global presence: Approx. 9,000 employees in
Europe, North America and Asia/Pacific.


Compliance within DP DHL

• Global Compliance Office

– Based in Bonn HQ

– Functional move to Global Legal Services July 2010

• Regional Compliance Officers

• Online ‘elearning’ modules.

– Mandatory for Corporate Executives

• Full suite of Policies and Procedures

• Local bespoke updates


Bribery Act – what have we done?

•Compliance training

– 10 sessions held October 2010 – March 2011.

– Attended by over 300 people across all DHL business units.

– Senior level sponsorship.

– Small groups of 20 – 30 people.

– Mix of internal and external presenters.

– Raised awareness of implication of new legislation as well as existing
policies and procedures.

– Also dealt with directors’ duties, health and safety and competition law.

– Very interactive, prompting much discussion (some heated).

– Often divergent views.


Bribery Act – particular concerns and implications

• Corporate Entertainment

– Perceived as part of ‘day to day’ business.

– Concern over ability to develop and maintain customer/ supplier
relationships.

– Existing high profile activities: F1, Man United.

– Olympics 2012?

• Facilitation Payments

– Belief legislation goes too far

– Concern at activities in Africa/ Emerging Markets/ Russia

– Unfair advantage to FedEx and UPS

– Concern over wide-scale application

– Watered down in guidance?

Bribery Act – particular concerns and implications

• Scope

– Wide-reaching outside UK

– Effect on expatriates

– Offence under Bribery Act and FCPA?

– Control over employees in other jurisdictions.


Bribery Act – next steps in DP DHL

•Review of particular risk areas

•Procedure for vetting corporate hospitality requests

•Review Policies and Procedures to bring in line with legislation

•Re-affirm top level commitment

•Continue roll-out of training to increase awareness

•Consider impact of Guidance.

AIM: Have Adequate Procedures in place.


Thank you for your attention.

Steven Fink/ Southampton/ Thursday 7 April 2011 Page 33

The Bribery Act seminar with the CBI

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