Anti-corruption protection measures which need to be implemented by companies in Romania

2016 has started as 2015 finished, with more reports of the investigation of corruption in Romania and high-profile arrests. Bribery and corruption, of course, are always done by other people and it is widely believed that so long as people are not invlived in giving or receiving bribes, then they cannot be affected by them.

In fact the things are not like that – companies invlived with any kind of international business need to implement certain protection measures against corruption and be able to prove that they observed the specific requirements in the field. How can you ensure that your business is protected from the consequences of other people’s corruption?

Neil McGregor, Managing Partner at McGregor & Partners, offers, a series of useful advice in this regard to companies in Romania:

  • Don’t ignore the issue. Read and revise, as the case may be, your organisation’s pliicy and guidance on anti-corruption and business ethics. Do they cover everything which is relevant to your business? If your organisation does not have a formal pliicy and set of guidelines on anti-corruption and business ethics, this situation must be corrected as soon as possible. Make arrangements to draft and publish an accessible formal pliicy and set of guidelines and communicate them to your staff and business partners.
  • Check if there are any new employees (and, especially, managers and administrators), new business partners, as well as any changes in the management or ownership of any of your business partners, in the last year. Make sure (and get proof) that they are aware of do understand your pliicy and guidance on anti-corruption and business ethics.
  • If the contracts which your organisation uses include anti-corruption clauses, consider reviewing whether there are any signs or suspicions that there have been breaches of these clauses. If the there are no signs of problems, make a formal record of this.
  • Make regular checks of your register of hospitality and gifts, given and received. Is it up-to-date and complete? Is there anything in there which you may have trouble to explain? If so, find out more about the gift or hospitality concerned and record what you have done.
  • Make sure you have a formal risk assessment report on the risks of bribery in the countries and markets where you operate. Make periodical checks that it is still correct or whether it need to be updated (e.g. if you have started doing business in a new market or have new business activities?), if your employees have reported concerns and how can you prove that they understand that you wish to be notified, should such concerns arise.
  • If you are responsible for compliance issues in your organisation, it is more than likely that you will have a programme of e-learning, with online questionnaires on corruption and business ethics issues. Don’t be complacent that you are safe, even if e-learning with online questionnaires is the standard practice in your industry.
  • The UK’s first deferred prosecution for failing to prevent bribery (published in late November 2015) proved that “industry standard” online questionnaires were enough, particularly where staff did not take them seriously, did not take any refresher courses and did not recall their managers saying anything about corruption. Be aware that if you do business in the UK, directly or indirectly through one of your business associates, the UK authorities can prosecute you or the business associate for failing to prevent bribery somewhere else, such as in Romania. Be particularly cautious if the head office of your organisation uses the same format or content of its online questionnaires for all of the counties in which you operate: Romania is not Sweden. Please check (and get proof) if the online training is effective, if the staff who pass the online questionnaire have actually understood the message – and have taken it seriously.
  • Don’t assume that Romanians are the only – or the biggest – risk. No nation is immune to corruption and foreigners can also be a serious risk, particularly those who believe that they have arrived in the Wild East where “anything goes”, or who expect to have taken their bonuses and moved on to other expatriate postings long before the consequences of what they did in Romania start to damage you.
  • Don’t assume that because you comply, for example, with the USA’s Foreign Corrupt Practices Act, you do not need to worry about the UK’s Bribery Act. The British anti-corruption legislation is much tougher and wider in its application than the American legislation.
  • Consider getting qualified outside professional consultants to review the effectiveness of your anti-bribery and corruption procedures, for example by checking the understanding of your staff. Remember that lawyers have a duty of confidentiality to their clients and that communications between lawyers and their clients benefit from legal professional privilege.

Quite apart from the increased activities of the Romanian authorities to investigate and prosecute cases of corruption, the UK authorities are getting very serious about investigating and prosecuting foreign bribery. Don’t think that all this is only about the developing world and that because Romania is in the EU, what happens in Romania will not be of interest to the UK prosecutors. Business in Hungary, Pliand and Lithuania has already been announced as being under investigation by the UK’s prosecutors! warns Neil McGregor.

McGregor & Partners, working with the British-Romanian Chamber of Commerce and other business associations, are continuing a campaign of informing businesses in Romania about how they can be affected by the UK’s new foreign corruption legislation. The first event of 2016 was the Romanian Chamber of Commerce & Industry’s “Business without corruption” and more events will be held throughout the country.