Toughest Anti-bribery Laws Coming in 2 Months
The Bribery Act 2010 is coming into force on 1 July 2011, bringing a sweeping change throughout the current anti-bribery regime.
UK firms have a little less than two months to strengthen their anti-bribery measures and purge their ranks of employees who would fail to comply with the law.
According to PricewaterhouseCoopers, even Christmas gifts of a gold fountain pen or a case of champagne could be construed as forms of bribery.
The Act is expected to hit the oil and gas industry the hardest because of its wide distribution in almost all parts of the globe, according to Ernst & Young.
The Ministry of Justice (MOJ) and the Serious Fraud Office (SFO) published their ‘adequate procedures guidance’ on 30 March, confirming that the Act will be implemented on 1 July 2011.
However, a webcast sponsored by Deloitte on April 2011 to discuss UK Bribery Act compliance programs of companies has revealed that 78 percent of respondents expected a large global anti-corruption enforcement in 2012, 73 percent admitted they were not familiar with most of the provisions in the UK Bribery Act.
Brent McDaniel, UK Head of Anti-Bribery & Corruption, says: “It is clear that the fight against bribery and corruption is high on the SFO’s agenda, therefore now is the time for any corporate, that conducts all or part of its business in the UK, to prepare themselves in a proportionate but adequate way.”
The guidance provides suggestions for good compliance, but precedents will be set, fines doled out, and culture shifted through the decisions made by the SFO and in court.
“We need to cut through the noise created by the corporate hospitality hype and listen to what the guidance is telling us about the Act. The SFO is likely to have little interest in prosecuting over a bottle of wine or a ticket to the Olympics. The mandate is to stamp out grand scale corruption in high risk countries, but doing so with limited resources.
“In these global times, this UK-based law is geographically omnipotent and doesn’t just apply to UK companies doing business overseas. Non-UK companies conducting business in the UK will also be a focus, in an attempt to level the playing field for domestic companies.”
MOJ Secretary, Kenneth Clarke, announced that the UK will reinforce its reputation as a leader in the global fight against corruption when the Act comes into force.
“I have listened carefully to business representatives to ensure the Bribery Act is implemented fully and in a workable, commonsense way – this is particularly important for small firms that have limited resources.
“Some have asked whether business can afford this legislation – especially at a time of economic recovery. But the choice is a false one. We don’t have to decide between tackling corruption and supporting growth. Addressing bribery is good for business because it creates the conditions for free markets to flourish.”
Vince Cable, Secretary of State for Business said: “Bribery has no place in British business, at home or abroad. This new robust law reflects the UK’s leading role in the fight against bribery, updates regulation dating back to 1906 and paves the way for competitive but fair practice.
“Over time we expect the new Act to boost the prospects of UK businesses through enhanced reputation for ethical standards, reduced costs and a level international playing field.”
The SFO has published detailed guidance setting out the approach they intend to take to prosecution of offences under the Bribery Act 2010. In addition, the MOJ has issued guidance on the procedures which organisations should put into place to prevent bribery.
The Act is set to come into force on 1 July 2011 and drastically reforms the law of bribery in the UK. The Act creates new general offences of giving and receiving bribes and bribing a foreign public official.
The Act also introduces a new corporate offence for any commercial organisation which fails to prevent bribery from being committed by their representatives.
Businesses can offer a defence in court if they can prove that they have ‘adequate procedures’ in place to prevent bribery.
Critics warned that the strict provisions in the UK Bribery Act could likely hamper establishing business ties between UK firms and overseas companies as even little offers given by companies to build up good relationships with other firms could be construed as bribery under the Act.
The Bribery Act provides that any “offer, promise or give a financial advantage or other advantage, to another person to bring about improper performance of a relevant function or an activity, or to reward a person for the improper performance of a relevant function or an activity” could be construed as bribery.