Anti-corruption watchdog Transparency International (TI) released the third edition of its Business Principles for Countering Bribery, which was initially released in 2003 and last updated in 2009. This document is widely used as a framework for multinational companies that are developing new anti-bribery programs or evaluating existing programs. The principles continue to emphasize strong controls over political and charitable contributions as well as gifts, hospitality and business entertainment expenses.
Some of the most significant changes in the overhaul by TI include:
- Stance against facilitation payments. The document takes a much stronger stance against facilitation payments than in prior editions, saying these are bribes and that companies should prohibit employees from making them. The earlier version of the document advocated against allowing these small payments to low-level government officials for accelerated handling of routine administrative tasks. The new guidance runs contrary to the U.S. Foreign Corrupt Practices Act’s view of facilitation payments as permissible.
- Emphasis on risk assessments. The new principles place a stronger emphasis on risk assessments. Specifically, TI urges companies to consider risks to their business and industry when creating their anti-bribery policies.
- New focus on conflicts of interest. Conflicts of interest are a new focus of the principles. TI’s updated document says that companies should actively monitor and manage potential conflicts of interest.
- Lobbyists as intermediaries. In discussion of the use of intermediaries, the revised document specifies the risks lobbyists can pose to companies that use them.
- Communication, transparency and reporting. The new report emphasizes transparency and reporting, suggesting that companies should communicate publicly and transparently about their anti-bribery efforts and any payments they make to government officials.
TI is expected to release additional guidance in the coming year, recommending that companies conduct formal anti-corruption assessment, including transaction testing.
How this may impact you
This updated document from TI is instructive, but not authoritative. However, companies that want to stay in compliance with anti-corruption laws will want to review these carefully and determine which elements to adopt.
- We believe regulators will be paying close attention to these revisions from TI. It is likely that these concepts will be considered carefully by regulators.
- Companies that are developing their risk response plans will want to take the new guidance into account.
- This guidance is intended to be global. In addition, companies should always confer with local laws with regard to bribery.
If you have questions about the new principles and how they may affect your company, please do not hesitate to call your local Grant Thornton Advisory Services partner.