Organizations at risk of anti-bribery and anti-corruption (ABAC) violations should implement risk-based ABAC compliance programs.
The layman’s definition of corruption is the favouring of personal interests over duties owed to others, for example, employers or constituents. Corruption includes bribery, conflicts of interest, extortion and illegal gratuities. Bribery is the provision of a benefit to induce someone to act in favour of the person providing the benefit.
Globally, corruption is a trillion-dollar industry and is the focus of lawmakers and regulators worldwide. Many countries have enacted ABAC legislation which provides more nuanced and differing definitions for bribery and corruption. Some, like Canada’s Corruption of Foreign Public Officials Act (CFPOA), define bribery offences by reference to the person giving or offering the bribe—that is, it is an offence to offer or give or agree to offer or give a bribe. Others, like the UK’s Bribery Act 2010 (the “Bribery Act”), also make it an offence to receive bribes, and in some contexts, to fail to prevent bribery.
Some statutes, like the CFPOA and the United States’ Foreign Corrupt Practices Act (FCPA), govern bribery of foreign public officials, which include specified personnel of foreign states and foreign public international organizations (that is, organizations formed by two or more countries or other public international organizations, for example, the International Monetary Fund or IMF). Other statutes, like the Bribery Act, govern bribery in the context of any employment and business relationship, in addition to the public sector.
Some statutes, including the CFPOA, include requirements related to the maintenance of accounting records, while others, like the FCPA, also include requirements related to internal controls. The accounting or books and records provisions require organizations to maintain books and records that comply with generally accepted accounting and auditing principles and standards. These provisions make it an offence to engage in improper accounting practices, including falsifying accounting documents, to commit or conceal bribery (as the particular statute defines it). Internal control provisions include requirements to devise and maintain a system of internal accounting controls that provide reasonable assurances over the accuracy and completeness of books and records, management’s inability to override controls, and other characteristics of accounting information and systems.
Despite the differences between the statutes, the essential elements of an ABAC compliance program are similar, although requiring adjustments to tailor the policy to applicable statutory requirements. For instance, even if an ABAC statute does not include books and records or internal control provisions, the procedures relevant to these provisions will improve the ABAC program and are best practices. Regardless of whether the ABAC statute defines bribery by reference to the person providing the bribe, or by reference to the recipient as well, similar procedures (with adjustments) can combat both types of offences.
An effective ABAC program should:
- Have the commitment of the board and senior management. Both should articulate, model and adhere to appropriate ABAC standards, ensure adequate resourcing for ABAC compliance, and otherwise provide demonstrable support of the ABAC program;
- Be risk-based – assess the risks applicable to your organization, to determine the content and scope of the program to mitigate these risks;
- Foster a culture of transparency and ethical conduct, supported by an appropriate code of conduct;
- Include policies and procedures addressing bribery; corruption; money laundering; conflicts of interest; codes of conduct; donations to political parties, charities and other not-for-profits; management of relationships and contracts with intermediaries and other business partners; facilitation or “grease” payments; gifts and hospitality expenses; training and communication; human resources (HR) matters like discipline, investigations, whistleblowing and performance evaluations, and other issues that support the prevention and detection of corruption;
- Include effective and monitored internal controls, including those over accounting and books and records, to reduce the risk of bribery and other corruption; and
- Include processes and tools for monitoring, reviewing and continuously improving the ABAC program.
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