Since 1997 the UK has been a signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. As a result, UK law has been expanded to make companies and individuals liable to be prosecuted for bribery offences, even though the conduct in question has been undertaken outside the jurisdiction of the UK courts.

Two recent high profile cases have brought the issue of bribery and corruption to the fore, and will be of particular interest to companies trading overseas:

Earlier this month, the UK broking arm of the Aon insurance group, was fined £5.25m following a finding by the Financial Services Authority (FSA) that the company had inadequate controls in place to prevent payments to foreign introducers being passed on as bribes. The FSA reduced Aon’s fine (originally set at £7.5m) by 30 per cent in recognition of the company’s co-operation with the investigation and agreement to settle early.

Also in January, Lloyds TSB paid $350m to the US authorities to settle charges that it had deliberately circumvented US money laundering and anti-terrorism legislation when it allowed payments to be made to individuals and countries on the US sanctions list.

Both these cases serve to illustrate that bribery is firmly at the top of the regulator’s agenda and present a clear warning to other firms to review their foreign anti-corruption systems and controls.

Companies doing business abroad, particularly in emerging economies, are particularly at risk of being asked to pay bribes. Equally, such companies may be at risk of putting themselves at a competitive disadvantage if they do not “play the game”. But, the size of the fines imposed on Lloyds TSB and Aon demonstrate the risk involved in ignoring these laws.

Bribes are rarely described in such bald terms. Whether they are referred to as ‘commissions’, ‘referral fees’ or ‘facilitation payments’, they will be examined by the courts and treated as bribes - if that is what in reality they are.

As the Aon case illustrates, there is a positive duty on companies to ensure that appropriate and effective measures are in place to minimise the risk of these sorts of events occurring.

Clearly, turning a blind eye to the activities of sales staff increases the risk of being caught up in an expensive and unwelcome investigation. As ever, proper training assists in good risk management, as do proper controls in respect of all payments. And, should the worst come to the worst, credit will be given for full co-operation in any investigation, and early specialist advice should always be taken.

Joe Burroughes is an Associate specialising in Commercial Litigation at Howes Percival LLP’s Norwich office.