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Corruption


Article exclusively contributed
by the ICAC

Watch out for bribery traps!


Paul, employed by a toy manufacturing company as a merchandiser, was responsible for placing orders with suppliers and negotiating prices with them. One of the suppliers often treated him to lavish meals and karaoke entertainment, and lent him money to speculate on the stock market. One day, the supplier offered to give Paul rebates of up to 10% of the total value of each order.

Paul was facing a dilemma. He was well aware that the component parts provided by the supplier were not competitive in terms of the price and quality. However, it was a tempting offer as he was in need of cash to settle his mounting debts. Besides, the supplier had already become his personal friend through frequent social contact, so Paul eventually agreed to the deal and pocketed commissions totalling $400,000 without permission from the company.

Have Paul and the supplier contravened the anti-bribery law in Hong Kong?

Yes, both Paul and the supplier have breached Section 9 of the Prevention of Bribery Ordinance (PBO).

Any private sector employee who accepts or solicits an advantage without the employer's permission, as an inducement to or a reward for doing an act in relation to the employer's business, will breach the law. The one who offers the advantage will also be guilty of an offence under Section 9 of the PBO.

The maximum penalty is seven years imprisonment and a fine of $500,000.

In this hypothetical case, Paul had abused his official position as a merchandiser to accept an advantage ($400,000 worth of commissions) for placing orders with a less competitive supplier.

As Paul did not have his employer's permission to accept the commissions, he committed an offence under Section 9 of the PBO, so did the supplier who offered the bribe.

Advice from ICAC:
Know the company's policy on acceptance of advantages

If an employee is offered money, gifts or other advantages during the course of his duties, he should observe the company's code of conduct or policy on acceptance of advantages by staff. He must get the employer's permission, preferably in writing, to accept the advantage. If the company does not have an express policy, the employee should seek his employer's prior permission before accepting the advantages.

An employee should observe his company's policy in respect of matters such as accepting entertainment and loans from suppliers or contractors, lest he may fall into an obligatory position to act in their favour.

For enquiries about this article, the PBO or any other ICAC services such as the provision of corruption prevention training, please call ICAC Regional Office (Hong Kong East) at 2519 6555.

To report corruption, call the ICAC 24-hour Hotline at 2526 6366.

For enquiries about this article, the PBO or any other ICAC services such as the provision of corruption prevention training, please call ICAC Regional Office (Hong Kong East) at 2519 6555.

To report corruption, call the ICAC 24-hour Hotline at 2526 6366.

For enquiries about this article, the PBO or any other ICAC services such as the provision of corruption prevention training, please call ICAC Regional Office (Hong Kong East) at 2519 6555.

To report corruption, call the ICAC 24-hour Hotline at 2526 6366.

For enquiries about this article, the PBO or any other ICAC services such as the provision of corruption prevention training, please call ICAC Regional Office (Hong Kong East) at 2519 6555.

To report corruption, call the ICAC 24-hour Hotline at 2526 6366.

For enquiries about this article, the PBO or any other ICAC services such as the provision of corruption prevention training, please call ICAC Regional Office (Hong Kong East) at 2519 6555.

To report corruption, call the ICAC 24-hour Hotline at 2526 6366.

Q&A about the Prevention of Bribery Ordinance (PBO)
Q1 What constitutes "an advantage"?
A1 Under the PBO, the definition of "advantage" is manifold. It includes any gift, loan, fee, reward, commission, employment, discharge of liability, service or favour, etc.

Q2 Is entertainment such as meals considered "an advantage" under the PBO?
A2 Entertainment as defined in the law refers to the provision of food or drinks for immediate consumption and any other entertainment connected with, or provided at the same time as, such provisions. Although entertainment is not considered "an advantage" under the PBO, it has been held in criminal trials that entertainment can become an advantage if the frequency and nature of that provided is wholly disproportionate to the background against which the provision is made. Therefore, it is not advisable to accept unreasonably excessive entertainment as it may be a sweetener used to make the employee obliged to connive at malpractice or corrupt activities.

Q3 Is it an offence if a private sector employee has accepted an advantage but has not done anything in relation to his employer's business in return as promised previously?
A3 The offeror and acceptor of an advantage are liable to prosecution so long as a verbal agreement of a corrupt deal is reached. It is not a defence in law that the acceptor does not have the power, right or opportunity to carry out the intended act.

Q4 If I discover corruption and related illegal activities in my company, what should I do?
A4 You should report them to the company and the ICAC. This way, you could avoid being implicated in the corrupt act or malpractice. Moreover, you could protect the interest and the reputation of your company by bringing the corrupt to justice.

   
 
Source : ICAC


Taken from Career Times 12 July 2002

(Last review date: 23 August 2013)


Disclaimer: The opinions expressed in this article are those of the contributor.

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