Hello and welcome to this data law. Webinar on the Bribery Act 2010 Onda Criminal Finances Act 2017 An update My name is Trevor. Hello. Well, and unfortunately for you, I am a solicitor. I spent the bulk of my time on the train, my professional time on the training and consultancy circuit, discussing a wide range of things with a wide range of audiences on a self employed basis for nearly 20 years now, Andi, In this session, I just wanted to review the bribe react almost 10 years on. And I also wanted to pick up the criminal finances at 2017 because both of those pieces of legislation creates similar issues for law firms. Those are primarily what is bribery. What is tax evasion? But both of these statutory regimes create a range of criminal offenses off which we may well be guilty off, failing to prevent bribery or tax evasion. The Bribery Act clearly deals with the bribery offenses. The Criminal Finances Act of 2017 has introduced exactly similar provisions in relation to tax evasion, and in this comment tree, I'm going to make the point. There have been no substantial changes to the legislation, nor, indeed to the official guidance. But I just wanted to think through, perhaps a toward the the major practical implications of much of this fall or firms and what that means for our policies and procedures. In the first instance there, I just wanted to mention what these two ranges of offenses amount to, and I wanted to deal with the bribe. React first. It is the older legislation, but it creates a range of offenses in relation to bribery and corruption. It's create in Section one, the active offensive, committing bribery in section to the passive offense of receiving bribes. Section six deals with the bribery of foreign officials and Section seven with an organization's failure to prevent bribery. Now there are defenses in this particular regime for the intelligence services and armed forces who can pay people with in brown envelopes without too much difficulty. But for the rest of us, it is a regime which is applicable to any organization with a base in the UK, whether it trades here or not, and the penalties are quite severe in that they attract fighting's and anything up to 10 years in jail so I just want to run through those offenses under the bribe react. First of all, Section one in the initial instance, is the offensive. Bribing actively some other person and each says, is you can see from the slide that a person called P is guilty of an offence. If either of the following cases applies. Case one is where P offers either by himself, all through somebody else promises. All gives a financial other advantage to some other person. Andi. He intends that advantage to induce that person to perform improperly relevant function or activity. Or it's intended to reward a person for the improper performance off such a function or activity. Section two, on the other hand, defines the passive offense off being bribed, and a person called all this time is guilty of an offence if any of the following cases applies. Case three, as it happens, is where our requests agrees to receive or accept a financial other advantage, intending that in consequence, a relevant functional activity should be performed improperly, whether by that person all by somebody else. Now, another case where this might apply is where our requests agrees to receive or accept the financial other advantage as a reward for the previously improper performance off some relevant function or activity. But all of these damming the wording is complicated, tortuous and statutory ism surely appreciate, but the they circulate around this notion of improper performance. We are the pay somebody or we are being paid for the improper performance of the function and the improper performance is defined in these sections as amounting to a breach of an expectation that a person will act in good faith impartially or in accordance with the position of trust. Now, this relates to a function of a public nature connected with a business or performed in connection with the business or on behalf of somebody else. But it is a public position on the expectations off the performance of this. The public function is what we in the UK would expect even of conduct abroad. If it is improper in our perception, then that is a breach of an expectation unless the written laws of the foreign territory concerned, allow or permit such customs or practice. So this is written into the legislation that we can adapt and accommodate the local laws in the areas so corporate events. Invitations to events designed as a PR exercise or intended to cement relations or enhance relationships would not constitute an offence under these provisions, because the requisite intention would be absent. The other sections in the Bribery Act Section six on Dsev in particular, relate to the bribery off foreign public officials and this person p who bribes a foreign public official was asked, is guilty of an offence if he's intention is to influence F in his capacity as a foreign public official, and, furthermore, or the briber must also intend to obtain or retain business or an advantage in the conduct of this. But it then goes on to provide in such subsection three that P bribes F if and only if directly or through 1/3 party. P offers promises or gives a financial advantage to F or to some other person with EFS, ascent or acquiescence, and that is neither permitted nor required by the written law applicable to him to be influenced in his capacity as a foreign public official by that offer, promise or gift. So this is acknowledging that foreign laws can accommodate these kinds off payments. But broadly speaking, foreign public officials cannot be made susceptible to the payment of preferences to improperly performed their public function. But what is a foreign public official, I suppose, is the obvious next question. And subsection five defines a foreign public official as an individual who holds a legislative, administrative or judicial position of any kind in the country or territory outside the UK who exercises a public function for or on behalf of a country or territory outside the UK or for any public agency or public enterprise in that country or territory. Or is an official agent of a public international organization so genuine legitimate advantages investments alongside planning applications? Things of that nature will not become an offense. Norwood proportionate expenditure on commercial activity, promotional activity or other business expenditure. Unless an intention to bride can be demonstrated and under this regime, your policies should state what level off corporate expenditure commercial activity can and cannot be allowed. Now, Sessions seven creates a different offense. It's the offense off failure of commercial organizations to prevent bribery. I think we know what Bradley looks like. It's paying people money to do things in properly. I'm sure we could we could see that Onda understand the iniquity of the payments that were making or the clients are suggesting a to various times. This Section seven offense is the one which affect law firms, particularly because it makes the firm liable for what clients do. Relevant Commercial Organisation CEO Law firm, for example, is guilty of an offence under this section if somebody associated with US bribes another person intending to obtain or retain business or to retain them advantage in relation to that business. But it's a defense to law firms to prove that we had in place adequate procedures designed to prevent persons associated with us from undertaking such combat. But we must not, with any sense of, um, premeditation, condone, connive, indulging the payments of monies to people, nor, indeed, the receipts, off payments or other beneficence from clients which may be interpreted. Ble as a bribe is long as we have adequate procedures in place, we should be safe now, a relevant commercial organization for the purpose of Section seven, is any body established or carrying on business in the UK, so any law firm obviously will be would be caught on git also captured the activities of our employees. Onda were any associated person in fact, but you're include employees, agents, subsidiaries, suppliers, contractors, anybody in our supply chain or, indeed, the recipient of our advice or services. But obviously the presence or absence of Giresse under course prosecutorial discretion is to be taken into account in individual cases, so it's hard ultimately to be definitive about the kinds of steps that we have to have in place in order to offset this risk. But under Section nine, it says that the Secretary of state is to publish guidance and policy has done about the procedures that relevant commercial organisations should put in place to prevent persons associate it with them from being involved in bribery as mentioned in the earlier sections on Now come on to what those systems, procedures, policies and mechanics should be in just a few moments. On the other hand, we've also got the Criminal Finances Act now, which imports exactly summer restrictions into our A framework in relation to tax evasion. So one could read bribery slash tax evasion and that would work. But it is a slightly different regime. It's contained in sections 44 to 46 of the criminal. Faneuil's as active 2017 and it talks initially about a tax evasion facilitation offence. And it differs from the bribery act in that he doesn't actually itself criminalise the act of tax evasion that's already covered by tax law. It's a criminal offense to a very tax. We'll know that avoidance of taxes, a different question. But it's criminal, a criminal offence to evade tax that's already covered. What these bits off the criminal finances that do, though, is it criminalizes the activities of commercial organizations, particularly advisors, obviously particularly law firms. But it would capture captains as well who are knowingly involved in a tax evasion facilitation offence. What's that? Well, Section 45 of the act says that a tax evasion facilitation events is any instance where you become knowingly concerned or taking steps with a view to or actually becoming involved in or aiding, abetting, counselling or procuring the fraudulent evasion of tax. Now, the problem evasion of tax is effectively cheating the public revenue off tax that should be legitimately paid. Tax avoidance is fine. That's the genuine scheme for the reduction of tax liabilities using perfectly genuine and legitimate means. Tax evasion is the iniquitous, the illegal cheating of the public revenue of tax that should be played. And there's a lot of conversations about aggressive tax avoidance, almost becoming tax evasion. But that isn't yet the case, but one Section 45 goes on to criminalise is the hail yer off commercial organizations to prevent these tax evasion, facilitation offenses and a relevant body Big your lawful is guilty often offence. Under this section, if a person A who is associated with B commits the tax evasion facilitation offense, they become involved in tax evasion advice. But it then goes on to provide that it's a defense for that commercial organization to prove that it had in place reasonable prevention measures. The word in the Bribery Act is adequate prevention measures, but this is reasonable prevention procedures designed to prevent persons associated with documents organization from undertaking tax for sanitation. The offenses and there are exactly similar provisions in Section 46 in relation to foreign tax evasion as well, and it doesn't really matter where the organizations are committing these offenses. The English law will apply if they are commercial organisations with a link in England. But the other thing which the Criminal Finances Act does Is it further says in Section 47 that the chancellor of the exchequer of this time must publish governments about procedures that relevant commercial organisations could put in place to prevent persons associated with them from committing domestic or foreign tax evasion facilitation offenses. So on the one hand we got the bribery Act which says that we shall not bribe nor shut, nor must we continue to trade without adequate measures in place. On the other hand, we got the Criminal Finances Act which says that we need reasonable prevention measures in place to enable us to avoid tax evasion. But the structures of those two regimes are largely similar. Both are subject to guidance and the guidance issued under both regimes is extraordinarily similar. So I'm going to deal with the guidance Together. I'm going to discuss bribery and tax evasion in the alternative because they are effectively alternatives. And I'm just going to discuss the key implications for law firms that spring from the back of this governmental guidance. What are adequate for reasonable procedures? Well, it says in the preface to both of these documents that this guidance is directed the Mavericks, those Mavericks responsible for corruption and tax evasion. They're not intended unduly to burden the vast majority off decent, law abiding professional advice. Firms on the gardens has effectively six core principles to it, all of which are effectively risk based. The idea being that less exhaustive procedures will be required for less risky ventures. But the six principles are in order. Principle one is that off risk assessment now risk assessment is a popular notion. It runs throughout the codes of conduct it runs throughout. The money laundering regulation was the terrorism stuff. It runs through the Bribery Act. It runs through the tech, the the Criminal Finances Act. It runs through all of these things. Many years ago, I went to Ah ah Law Society training course on risk assessment, which sent that risk assessment is the assessment of risk, which didn't actually help me a great deal. But the idea is that we need to put ourselves in the position off our staff are employees, people working with us and for us and think, How could we manipulate the system to bribe people or to commit tax evasion facilitation offenses? If we were minded to do so. How could we do it on when we've addressed the When we've assessed those risks, we then need to put systems in place to make sure that they can't have. So what it says in this first principle is that the organization, whoever it may be, assesses the nature and extent off the act of its exposure to these kinds of risks. What how risky is it that we might be becoming involved in bribery, corruption or tax evasion if we're acting for, um, wealthy comedians who want to shelter their money abroad in order to avoid UK tax? It is not a game we want to play if we're acting for Rolls Royce, seeking to paying money to people to win contracts for the Saudi Arabian Air Force or whatever, Yeah, is that something we want to be doing if we're not acting in those high risk areas than we may be able to take a more relaxed view. But the point that I would also make about this risk assessment is that the assessment must be periodic. It must be informed and it must be documented, and I would just simply say that, particularly in relation to the bribery act that we've had for some 10 years or more. Chances are we drafted a policy 10 years ago, slapped in the paperwork and then forgot about it. Are we reviewing that policy periodically? Are we gathering experience for what's happened over the last 10 years? Is he documented anywhere? This is the criticism which the s. R. A are currently weighing against the profession When it comes to the risk assessments we have to undertake under the money laundering regulations. They're not necessarily doubting that the risk assessments of Bean done, but there's no documentation of it, and the rules require that these risk assessments being documented. So what kinds of component parts do we want tohave to the risk assessment that we're going to take? Well, it's just in the guidance that clearly we must have a top level commitment as well as oversight off the risk assessment process. It's got to come from the top overboard, the management team, the senior partner, whoever it might be, must commit to eradicating bribery and tax evasion from our organizations. They also have to keep oversight off everything that's going on. I either in on behalf off off our and firm and watch. The clients and associates and third parties are inviting us to get involved in. So we have to review the policy. We have to integrate it into other systems and procedures on, Of course, we will be assessing risks from a money laundering point of view. Will be assessing risks from an operational point of view, from a regulatory perspective, a swell as from a structural, uh, perspective as well. So we do risk assessments across the board. This is yet another, but we have to factor in. We also need to be able to identify triggers that might facilitate a review. We've got a policy in place. We think it's working, but what might suggest to us that it is not working Onda. We need to have triggers that would enable us to reassess the policy from time to time and just check that it is still fit for purposes. They say we ought also to be undertaking due diligence reviews off the parties with whom we are dealing our staff, the agents that people who deal with us, our suppliers as well as our clients. We need also accurately to document the updated risks. And we need to be undertaking a periodic review, and I think that will be my broad conclusion, says he leave Being ahead, I think my broad contrition would be Look, you might have these policies, but have you reviewed him? Have you looked at them since you introduced them? And if not, are the risks the same as you thought them to be 10 years ago? This is not true of the criminal finances acting tax evasion, because that's relatively recent. But even then it's still two years old. So we need now, I think, periodically to review these risk assessments. No. Some commentary that was delivered when the Criminal Finances Act guidance was issued just tends to reflect the same kinds of things circulate around this risk assessment as would circulate around a money laundry risk assessment. So the common external risks, the common retainer risks, if you want to put it that way, are the geographical considerations here. Which countries are we delivering our services in and are they know nor likely to be associating with corrupt practices? The sectoral risk there is There are certain sectors that are mawr susceptible to corruption and bribery and, to some extent, tax evasion than than the others. Petrochemicals, aviation, omam see of those heavy business is, of course, our known Teoh involved corrupt payments from time to time. The transaction risk. What are we actually doing for the clients on? Does this give rise to a greater risk of bribery, corruption or tax evasion than might otherwise be the case? Likewise, business opportunity risks. We have got the opportunity to win. Business is in a certain area. A bit of money change hands first. Is this the kind of thing we want to be doing? Likewise, Business Partnership risks. We are being asked into joint ventures with, um third parties who are known either to be involved in corruption. All could be involved in corruption, common internal risks. These risks from within the business may well be deficiencies and employee training. You know that people just don't realize can't spot bribery or corruption or tax evasion when they come across it. So we need to up their awareness with more up to date training. Just one minor example being sort of kind of wanting to make before now. But I'll make it now is that of course in certain areas in the law world, it's not unknown for clients grateful clients to showers with their beneficence. I'm thinking in terms of glass decanters or cases of fine wine at Christmas or Ah, what, Sean A Mont Blanc pen or something of that nature. On top of our fees, they have spoken to professional colleagues who are off of you. This is so perfectly OK, Grateful client. We've done a good job. Of course, we can net the benefits. What's wrong with that? You know, I'm inclined to think bribery seems like the wrong word to attach to it, but it's a financial reward, not intended to imply that we've done anything wrong in the past. But it is a reward, which is intended, I think, at least in part, to dispose us favorably to the client in the future. And I am personally off the view that we should resist any such gift's. I'm sure this is being superseded by your own bribery policy, where gifts I think of any substantial substantial size are not to be accepted, which I think is right the right way forward, because my own view is that if I'm if I'm holding this. It's not a month long, Pender, you know to me if I'm holding this pen and I think every time I write with that Oh, yes, Santo gave me that and so on. So once advice from me, I'm going to be better disposed to them because of this lovely end A gourmet. So, you know, I just wouldn't have any of it. And I think the only accepted way to deal with this generosity is to say to find Look, thank you very much indeed. But I'm afraid my my firm's policy will not allow me to accept this gift, so I'm gonna have to return it. Um, you know, you've paid me. That's all I ask for Equally bonus cultures, not something which I think is all that common in the legal sector. But bonus cultures that reward excessive risk taking are obviously bound to create issues for us, as would a lack of clarity about our internal policies. Your am I allowed to keep this all? Not you know what? What is a dim enemies threshold? Is it? 20 quid Isn't 200 quid. You What is it? Lack of clear financial controls. Likewise and lack of clarity from a boat. You know what? Why should I decline this pen you know the boss took is so you know, why can't I take my is very much, I think the the watchword So risk assessment is the first of these six principles. The second is that off proportionate procedures. And it plays in the guidance that on organizations, procedures to prevent bribery and tax evasion have to be proportionate to the wrists. New face onto the nature, scale and complexity of the activities you're conducting. But it also requires that the procedures are effectively implemented. Andi enforced which to some extent I've already said. But rest in process will vary from body to body. Of course they will. They must, however, be realistic and achievable. But the probable components of a proportionate procedure are in no particular order a policy commitment to anti bribery and anti tax evasion. Zero tolerance, approach, tax evasion and on bribery are just not acceptable patterns off combat. We just as a professional cannot and will not get involved in any of those activities. So if you're thinking of instructing me on anything, which is which is likely to fall into either of those categories. Forget it on. I think that kind of zero tolerance policy commitment from everybody in the organization from the top down needs to be communicated externally to clients. So the message gets out there that we will not tolerate any of these kinds off instructions. We then need Teoh perform due diligence on the staff that we engage the agents, that we use, the associates, that we come into contact with the contractors who are engaged periodically on our behalf to do certain things for us. We need to perform due diligence on them, and I'll come to what that might be. In a few moments. We need a policy on Gift's and hospitality. What gift we last after be allowed to accept already mentioned more brawn pen. And I think the accepted wisdom is we just don't accept gifts. I'm sorry, just simple. We just don't do it. Hospitality is a more marginal point, and I think there's every expectation that the clients may want us may want to hospitalize. It may want to offer US hospitality. We might want to offer them hospitality, and to a certain measure that's perfectly OK. But We need limits on what is and is not acceptable. We also need commitments from the staff that they will play the game to on the bus. I'm telling you that this is how it's gonna work. I want you to tell me that you understand that and you are prepared to support me in this effort. We also need governance of business dealings so that if staff inadvertently get had meshed in something dubious, that there is sufficient governance there to spot this aunt to extricate ourselves from awkward situations, transparency of the transactions in which we are engaged and clear decision making processes. So there's no suggestion that things being done iniquitous, Lee and underhand we also need an enforcement policy. If it says it, we have to mean it on. Do you know, If you do not do this, then there will be disciplinary implications which may well matched Teoh dismissal. Ultimately, we need in support of that enforcement policy a of the appointment of an individual who is responsible for undertaking those activities. I think it's also sensible for us to have a whistle blowing policy which we may well have anyway, but particularly to link it to bribery and tax evasion. How the policy is to be applied to different projects, we might be becoming involved in that we make full communication, full, open and accessible communication of all of these points to everybody in the firm. And we train everybody in the firm. Mr what the problem is and what our solutions are to those various issues on and then of course, we monitor it. We evaluated, we review it and we refresh it from time to time. The third principle is that of top level commitment. The board, the management team, the managing partner, whoever it is who runs your organisation have to be committed, committed to preventing bribery and tax evasion where it occurs. The other thing the board of the management team have to do is they ought to be fostering a culture within the organization in which bribery and tax evasion are never acceptable. A point of said on a number of occasions already. I've already said, too that board members should be encouraged, have a zero tolerance policy. We just will not accept this. They should also be involved inthe e organizations, anti bribery and anti tax evasion stance and should communicate that stance not only by what they say, but by what they dio to staff agents, suppliers, contractors and everybody else Looking. We are just not going to get involved in this. So clients take note. Customers take note. Staff take mode. Agents take notes. Suppliers take note. Contractors. You all need to know this, but we will not tolerate this. It is illegal. It's unprofessional. And this law phones, we cannot be involved. Now, communications off this top level commitment should be a commitment of zero tolerance. It should stake what the breaches of the policy should be. But I think rather than just waiting the big steak, it would be sensible for the policy to articulate the advantages of the policy. The reason we're against tax evasion on bribery and corruption is it is not only illegal, but it is improper. Um, sure, we could all understand the social own acceptability of driving diesel cars. NOx emissions kill Children in certain places. You know, I drive a diesel car and I'm guilty the whole time again in it. But the tax officials double until only to change it right now. But that not a handle that. You know, I am conscious of the fact that your days will cause off bad in one way or another. So I but so I need to be have articulated me the advantages of having an electric car. And of course I'm looking at it. Check out of all one. But I'm looking at those those adventures very carefully now. And I think that is how bribery and corruption and tax evasion could also be dealt with. Look, we just don't want to get involved with it, because it yeah, it ruins the economics of the countries in which these people are running. It's, um, artificially congratulates those who are prepared to bend the rules and the reputational damage of being associative. But it is just not worth the Campbell, so there are really positive advantages in being seen as being cleaner than clean as well as being cleaner than clean. We could also make reference to the range of prevention, procedures and policies that we have in placement in the organization. If you don't want to do it, you don't have to, and furthermore, there are people in place. There are policies in place that you can wave it plans to put them off. We also need to be communicating the identity as well as the contact details of the individuals in on teams involved in this, and we should encourage from it from the top level board position. Everybody's involvement in this collective action to eradicate these as evils. The appointments should also emphasize the appointment should also besides, if that is what we are indicating not just communications. But appointment students should emphasize the selection and training of the managers, particularly senior managers. The establishment of codes of conduct if we don't have them already in relation to these things. The leadership in training and awareness amongst staff is to be encouraged as well as involvement in high level. Decision making is well as a general oversight of the policy and the fact that everybody can contribute to its feet back, and it's a lengthy review of its efficacy principle. Four talks about due diligence and says that the organization applies due diligence on persons who will perform services for or on behalf of the organization. Now this is intended to ensure that the organization is vetting the people it's taking on and the people it's engaging to ensure that they are not themselves guilty of any of these offenses. It's intended this principle to require organizations to put in place measures that will enhance and inform the organization's policies and procedures. Do divisions is key to certain types of contracts? Certain jurisdictions. It's equally important in joint ventures mergers. We need to know who we are getting indepent with as part of the process. Now, due diligence could comprise a number of steps that we could taken. Obviously direct interrogation off the staff, the people, the associates. Whoever we're dealing with is clearly the first stage. But we have to recognize that directly asking somebody, you know, Are you involved in tax evasion? They're going to deny it. Of course they are. So we may need in direct enquiries around what it is they are suggesting. Is the surrounding evidence indicative of the truth of what it is not telling us? General research, Google enquiries, Facebook searches, but Internet enquiries Generally, general research is all part of this, and of course, taking up references when they join us is all part of the exercise. We need to be happy that we are taking in the right kind of people engaging the light kind of people. But there, after we also need to undertake an appraisal process and continually monitor what it is they're actually doing because they may have condos completely into taking them on. And then they surreptitiously start to manipulate ourselves our staff for our money in untoward ways, and that would require an appraisal process of some description. I hesitate to use appraisals to describe it, but that, I think, is the upshot of it. And this is exactly a Kerala re of what it says in the money laundering regulations. We also have to vet the staff there to when we also must keep an eye on them from appraisal perspective to make sure that they're gambling habits don't get out of hand. We also need to request details on the background, the expertise and the actual experience off. Any individuals said, You know, we need to take up references, but we also need to explore them too. Principal fun if circulates around communication and training. And it says that the organization must seek to ensure that bribery and tax evasion prevention policies are embedded and understood throughout the organization through communication and training. And this requires, though I think I've already sent this clear and adequate messaging right from the top of the organization. The tone has to be set from the top. Andi. It must be percolated down throughout the organization. It's a zero tolerance approach, as several he mentioned, but we don't have speak up procedures. There's no sense off shame or any sense of repercussion arising from a member of staff's no wish to speak up about something. There should be protection, strategy, protection for whistleblowers. If that is the way in which we want to encourage this reporting to occur, there also needs to be external deterrent messaging of our policies. That's all part of other communication. But the outside world needs to know that this is our policy to, and training should be defective. How we establish effective training is a moot point, but training should be effective at ensuring understanding in the staff. And it's one thing for me to sit here and talk about this. It's a totally different thing. So you actually to understand the points that I'm trying to make? Hopefully you do. But we should also be having tests at various stages to ensure that you do understand the importance of the message that we're We're giving principle six talks about monitoring and review, and the organization must monitor and review its procedures and make improvements where necessary. This is an acknowledgement of the idea that risks will change over time. As one type of procedure gets prevented for being illegal. They they'll invent some other way, so risks change over time, and your procedures should therefore be reviewed periodically from time to time. It just does no harm to go back to the procedures and just see how it relates to how we are currently doing your work. Because over the last 10 years since 2010 we're still in a recession. Back then. Is that what has changed? With Brexit issue on the threshold, it may well change again the nature of the clients, the way in which we seek to avoid tariff barriers, all that kind of stuff, you know, it will change from time to time. What trigger points have we got in our current systems and procedures? How frequently do do we review our policies, our procedures, trigger points and everything else which has happened. In the meantime, we could take and incorporate feedback from past instances where things have gone a little bit, Harry. But in fact we got away with it that time. So we have changed our policies. We don't do that kind of work anymore. Feedback from others in the industry groups as well, if if we are particularly acting for bridge manufacturers who constructing bridges across foreign rivers and is that a sector where corruption is rife? And if so, how did you deal with it? This is all part and parcel of the exercise, but we just need to be reviewing our policies periodically. And that, I think, is the big message. Are you still doing what you were doing 10 years ago? Because if not, your policy should change. That is the six principles. What the guidance notes then go on to do is they go on to discuss some case that isn't scenarios just to illustrate the kinds of points of principle which they're trying to make. And these are not part of the official guide. What's there simply designed to assistance to understand the issues and formula, our policies and I just wanted to mention a few of them with you now in relation to bribery. Three. Case study warm in the appendices to that particular set of guidance discusses facilitation payments, and it mentions that A has acquired a new customer in foreign area B. It operates through an agent. It was called C. These import inspectors require inspection fees before they will certify and facilitate the clearance of goods. They decide the question of tariff import barriers on you export that is yet to be determined. But what it's suggesting is that a the person is acquired. This customer, uh, who is having to pay these and special fees they should communicate their policy. Zero tolerance. We should indicate that offenses would be committed under UK law. If we were to go ahead with these payments, we must ascertain the position. Are the fees in any way legitimate, in which case clearly they would be payable. But if they are simply bribes to get people to ease the way through, then this would not be acceptable. We need to train see the agent who's acting for us in resisting the illegitimate demands made on it. We need to monitor sea in the operation off off his work on our behalf, and we should also, it suggests in the gardens be exerting diplomatic pressure on foreign country. Be to relieve the need for people to try to rip people off in this way. Now this is a counsel of perfection. Off course it is on die. Leave it entirely to you to decide how you would go about it. But this is the your position. As evidence, there's most guidance notes Randi Kaye City to talk about proportionate procedures, and it discusses a who is operating within the UK engaging independent consultants to assist it in winning business through tenders. A should communicate that policy. Zero tolerance indicate what offenses may be committed under UK law. If we were to go ahead with this, investigate the chosen consultants, undertaking due diligence on them and asking all of the questions directly off them as well as around them. We should include contract provisions which include disciplinary sanctions. For breach of this legislation, we should be providing guidance on bribery prevention. We should then will be monitoring and reviewing the relationship throughout its currency, and we should provide a confidential whistleblowing procedure so that we can be informed. If anything doesn't occurs, it should. Are the simple steps that we should be having in place robbery case study for the Round 11 off them, and we're gonna deal with all of them. But bribery case before talks about hospitality and A has established an annual rand of entertainment, sporting and dining events is a token of appreciation for its valued customers. Customers pay their own travel expenses, but foreign officials travel is paid for by a no. Is there any thing on toward or illegal or iniquitous about the payment for the travel? It could be substantial money. So we should be evaluating A's policy on the aims of hospitality provisioned, particularly travel. Why are foreign officials benefiting from this in a way that you cave officials aren't? Maybe Likewise, recipients must not be under any impression that there is any quid pro quo. Look, I pay for your flight, therefore you owe me. Provision for the hospitality for officials is cleared in advance with senior management expenditure over a certain level may have to be cleared in advance perhaps, and that there be clear and transparent accounting for a while. Payments and receipts may fall for this purpose. This is just being seen to be on the right side of the law. I think is really what I'm suggesting. But in the tax evasion guidance notes, there are also some scenarios being offered on do. This will obviously, I think, strike a chord with many people in practice if Mike's been zone to go by. But the first scenario mentions that a client asks a partner to change the description of services rendered on a bill in a way that seems designed to obscure the nature all those services rendered. Is this acceptable? No. What the scenarios then do is they offer to alternatives, one of which is okay, the other isn't. The first option is that the client explains this request in that it relates to confidential matters which he would rather the bill paying staff didn't see. He just doesn't want the people who are paying the bill who is always gonna read it before they take it to read what he was asking the firm about. That would probably be a perfectly adjustment request then that we just change the wording in some way. But if the client were to explain that the original description would cause it some tax difficulty. So could we just massaged the wording somehow? That would not be acceptable. Likewise, Tax evasion scenario to client. Asks apartment to change the address. Senior of the bill from Mr A to Entity B. Is this acceptable? I know many clients ask this off firms. Is it acceptable? No, it isn't. Would be my initial reaction. But if the explanation is that it was in fact to entity be that the services were truly delivered, then you Bill entity bait because it is entity be That is the true client. Mr. A might have been structured you and you might have sent him the bill, but actually it should have been sent to the client because the client the entity waas truly the client. And obviously it's the client's liability to pay our bill. So that kind of adjustment would be perfectly OK. What, on the other hand, would not be OK is if the client explained that he wishes to avoid the V A T on does entity be belongs to him? It shouldn't really matter too much should it that I think is incorrect and would be a problem for us equally. Tax evasions No. Three envisages a client asking a UK based lawyer to establish an offshore trust to hold that client's assets. It suggests, in the alternative propositions, it would be OK if the client explained that this was necessary to avoid local tax rules and produces a letter to you from an appropriate attorney confirming the arrangements. Legality? Yeah, that would not be a problem, I think if you were reassured of all of those things. But if the client offered no explanation when you didn't seek one, then you only have yourselves to blame for getting involved in something which could well be a criminal activity. So these are just examples. These are just a few examples of the many offered in support of the guidance notes, but it just illustrates the the principles that we should be having. I don't think it tips so general conclusion was then. I think our and this is being the conclusion of being drawing several occasions, right? This this talk. But we should be now reviewing our risk assessment, reviewing the policies underneath, um, generally and updating them. Even if we don't change that, we should be updating milk from time to show that we are actively reviewing them. Are you doing the same types of work that you were doing a decade ago or even two years ago, depending upon which regime you're looking at? But you know, we're doing the same workout we facing the same risks that we were facing back then because if not, we need to reflect and review the policies. How effective have your policies proved to be over the time you've had them? What feedback could you get from stare for from regulators or from anybody as to what kinds of activities are acceptable? What close calls of your hat, What experience from others could you review as part of your process? I once, with redouble our policies, review them. We should be reestablishing our commitment, retraining the staff, especially the newbies. Of course, who may well not have had any exposure to this before now. But as long as we have doing those essential components and we are avoiding any deliberate wrongdoing, then I think we're broadly okay. And I wouldn't sweat the small stuff too much that in pursuit of perfection, thank you very much indeed for listening
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