Finders Fees Under Fire in England

The Art Newspaper is reporting that a new law being enacted in England may well make finders fees and introductory commissions illegal.  The law is aimed at large scale corruption, but according to the article, if finders fee are not properly disclosed to all parties involved they too may fall under scrutiny and suspicion.  The way the new law is written, it may also be hard to either enforce or to convict at this level as there needs to be an intention to deceive involved.

The Art Newspaper reports

Art dealers in Britain could fall foul of new anti-bribery legislation which comes into effect next year. The Bribery Act makes it an offence to give or accept bribes and also introduces a new corporate offence: a company may commit an offence if it fails to prevent bribery by its employees or associates, even those working abroad.

Art lawyer Pierre Valentin of legal firm Withers warns that the widespread practice of paying finders’ fees to individuals who bring in new business could constitute bribery under the new act.

“Whilst the payment of commission remains a perfectly legitimate business practice, the days when this is paid or received without consideration of the nature of the relationship between the payer, the payee, and the other parties to the transaction may well be over,” said Valentin.

The new act “will capture the payment of commission to intermediaries owing a duty of trust to art collectors…without the collector’s consent to such payment,” he explained. “For example, if you pay a commission to the decorator of an art collector because the decorator assisted you in selling a painting to this collector you could be committing an offence if the collector is not aware that you are making this payment.”

The new law has a wide territorial scope. If the representative of a British firm commits an act abroad which would amount to bribery if committed in the UK, the firm may be committing an offence even if it is unaware that its representative has acted improperly.

To read the full Art Newspaper article, click HERE.