The consequences of corruption can be severe, ranging from reputational damage, business disruption and significant fines and claims for damages. Businesses should therefore identify their exposure to corruption and implement general anti-corruption and marketing policies in the area. Marketing in the form of free meals for customers and other business partners has given rise to many problems for businesses in Denmark and abroad.
Many Danish businesses have activities abroad, exposing them to different market conditions and anti-corruption regulations. As a result of the increased international focus on corruption, Danish businesses may have to comply with different rules around the world, in addition to the Danish rules.
For a business to be subject to the rules applicable in the UK and the USA, it need not have a significant presence on those markets. A Danish business may be covered by the anti-corruption rules in another country not only if it has subsidiaries or branches in that country; the establishment of sales offices and listing of securities or similar representation may have a similar effect. Many of these rules are intended to prevent corruption regardless of where it takes place and whether the acts are committed by commercial agents or other intermediaries.
It is characteristic of the foreign rules that the level of fines is significantly higher than in Denmark and that the fines may be accompanied by other severe sanctions, including listing of the business on a public “name and shame “ list, prohibition of participation in public tenders, and risk of being kept under supervision. Further, (managerial) employees risk imprisonment.
Drafting and implementation of an efficient anti-corruption programme with down-to-earth everyday examples may contribute to identifying potential risks and serve as a cultural carrier, while also acting as a deterrent through internal controls.
Further, an anti-corruption programme may prove useful if the business is subjected to corruption. First, the programme will state how to proceed, also in relation to the authorities, and which processes to initiate. Second, an efficient anti-corruption programme may contribute to withdrawal or reduction of the fine.
An anti-corruption programme which is tailored to your specific business will therefore contribute to identifying and eliminating the risks associated with the industry and the markets in which you carry on business.
We cooperate with relevant employees in your business to draw up a tailored anti-corruption programme covering the whole organisation, from senior management to employees who are in contact with customers, suppliers, distributors, other business partners and authorities. We also offer to go through existing marketing policies and/or practices and to provide training to relevant staff groups.
UK anti-bribery rules
A new act to combat corruption entered into force in the UK on 1 July 2011 (UK Bribery Act 2010). It means that Danish businesses operating in the UK may have to have internal anti-bribery guidelines and programmes in place. Many businesses will therefore need to prepare new or update their existing internal guidelines and/or programmes.
More and more Danish businesses are operating internationally in an increasingly global market. They are also more frequently acting in markets where corruption is more widespread than in traditional Danish export markets and where employees risk being asked to give bribes.
In 1997, the OECD adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Several countries, including Denmark, subsequently introduced rules criminalising corruption regardless of where it takes place. In 2000, a prohibition against bribery of foreign public officials was implemented in Denmark. Danish businesses with, for example, a US parent are also subject to the prohibition of the US Foreign Corrupt Practices Act ("FCPA") against bribery of foreign public officials. Now, the UK has adopted a new anti-corruption act, which came into force on 1 July 2011.
The most important innovation in the UK Bribery Act is that a business will be guilty of an offence if it does not have adequate procedures designed to prevent persons associated with the business from giving bribes. In order to have a defence against allegations of bribery, it is imperative that the business is able to show that it has guidelines and programmes which meet the requirements of the new UK Bribery Act and that these are effectively implemented throughout the entire organisation, for example through training for employees, agents, and others.
As a general rule, the UK Bribery Act applies to British citizens and companies incorporated in the UK. The Act also applies to overseas companies that “carry on part of their business in the UK”. This expression is assumed to be interpreted broadly, and therefore the UK Bribery Act will also apply to many Danish businesses even if they are not resident in the UK.
We advise clients on the implementation and revision of anti-corruption programmes that meet the requirements of the UK Bribery Act and other anti-bribery rules. We have an extensive international network and cooperate with international experts within the area.
We offer advice on anti-corruption issues in relation to e.g.:
- Conflicts of interest
- Facilitation payments
- Interaction with suppliers
- International production
Kromann Reumert also assists in drafting codes of conduct, contractual clauses, including clauses covering breach, website content and large-scale anti-corruption programmes, and in setting up a whistleblower hotline.
Do not hesitate to contact us if you need assistance in identifying potential risks of corruption and assessing the need to draw up and implement an anti-corruption programme. We would be happy to meet and discuss your exposure to corruption risks, both within your organisation and in relation to cooperative partners, and to suggest proper legal measures.