A NEW strict liability rule under the Bribery Act exposes companies to prosecution if they do not put necessary procedures in place to police those acting on their behalf.

The warning comes from specialist law firm Withers. Companies in the art and antiques industry are particularly at risk because of the payment of commission linked to introductions and gratuities.

Only two years ago, Withers partner Pierre Valentin astounded delegates at a seminar held by the Society of Fine Art Auctioneers and Valuers (SOFAA) when he explained just how easy it was to fall foul of the bribery laws.

Then, auctioneers were visibly shocked as they learnt that activities that were understood to be common practice, such as the paying of finder's fees, in some circumstances could make them an unwitting party to a bribe.

Now Withers warn that the new strict liability offence for companies of "failure to prevent bribery" is a "significant departure from the current law".

Firms need to be aware that a corporate offence can be triggered by people associated with the company, not just employees, and this can happen even when the company exercises no direct control over the individual concerned.

"The definition is likely to include persons retained by art dealers and galleries to drum up business for them abroad," said Withers.

Importantly, the rules are not limited to the payment of money, but can extend to "practices such as excessive corporate entertainment, which the art market may not necessarily think a mounts to a bribe. Art market professionals will have to evaluate whether the level of entertainment is appropriate in the circumstances, or whether it risks inducing the recipient to act improperly," the law firm advised.

With a maximum penalty of ten years' imprisonment for all offences, other than the corporate offence, which can carry an unlimited fine, Withers further advise that "the courts have indicated that they view bribery as an extremely serious offence, and corporate fines are likely to be very high".

So what exactly do companies need to do? According to Withers, they should carry out an assessment of where bribery risks may arise and put clear anti-bribery policies and internal guidelines in place.

"Consideration should be given to circumstances when commission is paid or received, who within the organisation gives or receives commission and their connection with the business, the relationship between the person receiving the commission and the person whose business is being introduced, and crucially, your disclosure obligations."

The law firm reassured that "there is no suggestion that the Act equates commission with bribe. The payment of commission remains perfectly acceptable, provided that certain conditions are met."

By Ivan Macquisten