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MoJ fails to meet gift and hospitality transparency requirements

It has recently been reported by the National Audit Office that the MoJ has failed to meet transparency requirements relating to gifts and…

60 seconds with Stella Duncan, Compliance Consultant in the Compli team 

It has recently been reported by the National Audit Office that the MoJ has failed to meet transparency requirements relating to gifts and hospitality.

The Cabinet Office requires central government departments to report the hospitality accepted by senior officials each quarter and it appears that the MoJ was among five of 17 departments that had not published this information for every quarter from April 2012 to March 2015.

Stella, why is transparency important for a firm regarding gifts and hospitality?

Although genuine business hospitality is an essential part of any business, under the Bribery Act 2010 the giving and accepting of hospitality that is not reasonable or proportionate to the business may be construed as bribery under the Act i.e giving someone a financial or other advantage to perform their duties or activities improperly or influencing a decision maker for a desired outcome.  There is a risk that the firm may be liable if a senior person within it commits bribery offence as their activities would then be attributed to the firm. To minimise this risk, transparency and having adequate procedures in place to prevent bribery are key.

What factors would you suggest a firm should consider in assessing the risk of bribery?

Risk assess all areas of you business and evaluate the potential for a client to commit bribery in the sectors that you work in together with the risk to the firm under the POCA 2002 Regulations. Assess the adequacy of the due diligence that you conduct on your clients and associated parties. Consider the corporate hospitality that you give and receive and charitable and political donations that you make. Also consider who is involved in making the decisions regarding these areas and what influences the decision.

What would the next steps be to minimise any risk?

Use this assessment to establish your firm’s policy and set parameters for expenditure and gifts and hospitality received and implement a recording procedure such as a gifts and hospitality register. This should be analysed periodically to identify any trends and ensure that the firm’s policy is being followed.

The most important preventative action to take however is communication of your policy and procedures to your staff and the provision of regular training in Anti Money Laundering legislation and the Bribery Act 2010.

Finally, remember your business and the risks you face change over time so continue to re-evaluate your policies and procedures regularly.

If you would like any advice in relation to compliance or any other matters, please contact the Compli team on 0345 070 1047.