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Jo C.
Jo C., Barrister
Category: Law
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Experience:  Over 5 years in practice
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Bribery act 2010 we are planning to operate a B2B multi-level

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bribery act 2010
we are planning to operate a B2B multi-level marketing company. However, I do worry about the bribery act 2010 to be impact on this business. i.e. there may be some decision maker to be part of our distributorship, and they sell to their company. We are not sure about whether this would be considered as a bribery or not.
Please advise.
Submitted: 1 year ago.
Category: Law
Expert:  Jenny replied 1 year ago.
Hello my name is ***** ***** I am happy to help you today. Please can you explain the situation in more detail?
Customer: replied 1 year ago.
Hello TaratillThanks for the response.We are going to launch our multy level marketing company targeting on electricians who are buying electrical products on regular basis. However, as we do not have the overall control of our members and their downlines, in some case, we think it may be happen that: a company's buyer will join our business as a distributor / member. in this case, the buyer will be our business distributor, we will pay commission to him if the company he works for signed as a customer under him.We are not sure about in this situation, would this kind of activities to be considered as bribery to this buyer?
Expert:  Jenny replied 1 year ago.
Hi I am going to opt out as this not my area. A colleague will pick this up for you. Good luck.
Customer: replied 1 year ago.
multi-level marketing is like the way Herbalife, ACN, Avon that kind of distribution channel.
Expert:  Jo C. replied 1 year ago.
Hi.
Thank you for your question. My name is ***** ***** I will try to help with this.
I'm not sure what the bribery point is? I'm fairly well aware of the issues with multi level marketing. Pyramid selling has been considered but what is the bribery?
Customer: replied 1 year ago.
Hello JoThanks for your reply.Here is why the bribery coming from:As our targeted market is trade business. The initial main targets are trademen and electricians who may work for themselves or for a large contractor. As the characters of Multy-level marketing i.e. upline will be rewarded a commission from downlines sales and purchases, it is very likely that this commission to be considered as a bribe.For example: one of our distributor successfully signed up a buyer of a contracting company, then buyer become a distributor of our business; and then this buyer signed up the company he works for as a customer of our business. In other words, because of this buyer becoming a distributor of our business, we have the chance to sell products to the company he works for and get the order. Please note that once the order is processed and payment is collected from this contracting company, the buyer will be given commission of such as per our rules.Example two: one buyer of a contracting company is very interested to our business model and willing to signed up the distributorship. However, he is aware of the given commission generated from his company's purchasing from our business, he then decides to create up a domain company to sign up the distributorship with our business. So commission generated from the company he works for will pay to this domain company but he still works for the contracting. Would this be bribe? or just a simple agency of our business?If two examples above are considered to be bribery, what we should do to avoid such claim from others?Please note that in our business model, Pyramid selling is not the case, as we do not give money to distributors on recruiting people, but we reward money to distributors for goods sold by themselves and their teams.Please let me know if you need more information.Regards
Expert:  Jo C. replied 1 year ago.
Sorry if I am missing the point but what is the bribe? This seems to be normal network marketing.
Customer: replied 1 year ago.
it seems it is normal network marketing, however, the character of this business is Business 2 business. As the result of commission to be paid to the buyer, this would be a great influence on their buying decision, i.e. if he makes the contracting company to buy materials off from our business, he will benefits from all purchases made (he will get commission off all sales between our business and the contracting company.) remember this is very like to a guarantee bribe, i.e. you do this, you will get paid by such such. Please correct me if I am wrong from this point.could you please let me know what is bribe? From my point of view, the compensation plan is like a guaranteed monetary reward to encourage the buyer to use our business instead of others.
Customer: replied 1 year ago.
further to the previous message, please check the information below:Sections 1 to 5 of the Act cover "general bribery offences". The crime of bribery is described in Section 1 as occurring when a person offers, gives or promises to give a "financial or other advantage" to another individual in exchange for "improperly" performing a "relevant function or activity". Section 2 covers the offence of being bribed, which is defined as requesting, accepting or agreeing to accept such an advantage, in exchange for improperly performing such a function or activity. "Financial or other advantage" is not defined in the Act, but, according to Aisha Anwar and Gavin Deeprose in the Scots Law Times, "could potentially encompass items such as contracts, non-monetary gifts and offers of employment".[5] The "relevant function or activity" element is explained in Section 3—it covers "any function of a public nature; any activity connected with a business, trade or profession; any activity performed in the course of a person's employment; or any activity performed by or on behalf of a body of persons whether corporate or unincorporated". This applies to both private and public industry, and encompasses activities performed outside the UK, even activities with no link to the country.[15] The conditions attached are that the person performing the function could be expected to be performing it in good faith or with impartiality, or that an element of trust attaches to that person's role.[16]Under Section 4, the activity will be considered to be "improperly" performed when the expectation of good faith or impartiality has been breached, or when the function has been performed in a way not expected of a person in a position of trust. Section 5 provides that the standard in deciding what would be expected is what a reasonable person in the UK might expect of a person in such a position. Where the breach has occurred in a jurisdiction outside the UK, local practises or customs should be disregarded when deciding this, unless they form part of the "written law" of the jurisdiction; "written law" is given to mean any constitution, statute or judicial opinion set down in writing.[15] The general offences also cover situations where the mere acceptance of such an advantage would constitute improperly performing relevant functions or activities
Expert:  Jo C. replied 1 year ago.
There isn't actually a defiition of a bribe in the new act but I would suggest that the issue here is that S1 says that you have to influence a person to perform a function 'improperly'. There is a definition of what 'improperly' means here
http://www.legislation.gov.uk/ukpga/2010/23/section/4
Plain fact is, this is not made out here. This is a perfectul normal inducement with nothing improper abut it.
All buying decisions are made as a result of some form of inducement.
I'm sorry if I am missing the point but I can't immediately see how this applies here?
Can I clarify anything for you?
Jo
Customer: replied 1 year ago.
hello Jo.thanks again for the reply.if we don't consider mlm business model. simply consider from the simple transaction as below.I promise to the buyer if the company he works for buys goods from me, he will personally be given commission at 5% of their company spending? is this a bribery?if you would reckon this is not a bribery then MLM model has no any legal problem.however if this a bribery, then mlm model is at very high level of risk to be considered as a bribery at court no matter who provide the bribe information, our business will pay the buyer commission directly.if the word of "improper" function is the key to understand bribery act 2010. then can I understand that if there is no improper function caused by the bribe, then the act does not apply?please clarify
Expert:  Jo C. replied 1 year ago.
Well, my view is that is not a bribe. I just don't see the 'improper' function in this.
It is possible that others could take a different view but that is certainly mine.
Customer: replied 1 year ago.
Ok, from all people I asked this question, 100% of them said this is a bribery. From a Barrister's point of view, what is a "bribery" then. This would be my final question? Appreciate for your time.
Expert:  Jo C. replied 1 year ago.
No, it is fine. It is quite interesting actually.
There is a definition here
4Improper performance to which bribe relates
(1)For the purposes of this Act a relevant function or activity—
(a)is performed improperly if it is performed in breach of a relevant expectation, and
(b)is to be treated as being performed improperly if there is a failure to perform the function or activity and that failure is itself a breach of a relevant expectation.
(2)In subsection (1) “relevant expectation”—
(a)in relation to a function or activity which meets condition A or B, means the expectation mentioned in the condition concerned, and
(b)in relation to a function or activity which meets condition C, means any expectation as to the manner in which, or the reasons for which, the function or activity will be performed that arises from the position of trust mentioned in that condition.
(3)Anything that a person does (or omits to do) arising from or in connection with that person's past performance of a relevant function or activity is to be treated for the purposes of this Act as being done (or omitted) by that person in the performance of that function or activity.
I just don't see how this amounts to a breach of a relevant expectation. It is an inducement to buy of course. As are discounts or vouchers and the like.
Customer: replied 1 year ago.
year. however, if a company spending over £25000 per month, this buyer would accept about £1500 commission, I think this would be a case and not a small amount, isn't it?
Expert:  Jo C. replied 1 year ago.
No, it wouldn't not be a bribe because it is a small amount. That isn't the issue.
The Bribery Act is drafted to avoid small gifts amounting to a bribe.
Jo C., Barrister
Category: Law
Satisfied Customers: 70197
Experience: Over 5 years in practice
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