Scotland-based company Brand-Rex, a developer of cabling solutions for network infrastructure and industrial applications, last month reached a £212,800 civil settlement with Scottish prosecutors for failing to prevent bribery by a third party in violation of Section 7 of the U.K. Bribery Act.

Between 2008 and 2012, Brand- Rex operated an incentive scheme known as “Brand Breaks” for U.K. distributors and installers. In return for meeting or exceeding sales targets, installers and distributors were eligible for varying degrees of rewards, including foreign holidays. The Brand Breaks scheme was not in itself unlawful.

What was unlawful, however, was that an independent installer of Brand-Rex products offered his company’s travel tickets to an employee of one of his customers. "This went beyond the intended terms of the scheme, as this customer was an end user of Brand-Rex products, rather than an installer or distributor," the Scottish Crown Office and Procurator Fiscal Service stated. "The individual who ultimately received the tickets was in a position to influence decisions as to which company they purchased cabling from. Personnel from this company and individuals connected to them used these tickets for foreign holidays in 2012 and 2013."

Self-Reporting Credit

Brand-Rex became aware of this issue through an internal review and launched an extensive investigation conducted by external solicitors and forensic accountants. As a result, Brand Rex self-reported to Crown Office and accepted that they failed to prevent this when they should have.

Under the self-reporting initiative, the case was deemed suitable for civil recovery settlement, rather than criminal prosecution. “In appropriate circumstances such as this, where companies accept that they have failed to prevent bribery and take steps to ensure that it will not occur again, the self-reporting initiative allows for a civil settlement rather than criminal proceedings," said Linda Hamilton, head of the Crown Office's Civil Recovery Unit. “I would urge any companies who uncover any instances of bribery to notify the Crown Office as soon as possible."

The company has taken steps to implement new policies and training to ensure that no unlawful conduct will take place in the future.