Despite the crescendo of noise and continued speculation surrounding the new Bribery Act, a third of all UK companies remained unprepared for its introduction in law late last week, with business leaders and employees in turn risking a jail sentence or a potentially unlimited fine.
In fact, 70% of companies questioned by KPMG for the Global Anti-Bribery and Corruption Survey (see the foot of this page for a link to the full report) still firmly believe and assert that there are some places in the world where business simply cannot be done without engaging in some form of bribery and corruption.
“While many corporates are already tackling the Act head on,” said Brent McDaniel, UK head of anti-bribery and corruption at KPMG, “the fear is whether or not training and policy are extending to global partnerships and overseas third parties.”
McDaniel continued: “For those who were enjoying corporate hospitality last week, proportionality sits at the heart of this legislation. The Serious Fraud Office is likely to have little interest in prosecuting over a bottle of wine or a day at the races. Rather, the mandate is to stamp out grand scale corruption in high risk countries, but evidence of companies undertaking thorough risk assessments and training is going to be vital if they are to evade prosecution.”
He concluded: “In a crowded regulatory world, the Bribery Act is but one element and should not be tackled in isolation. However, it must also be the catalyst for company Boards of Directors to overhaul the entire compliance agenda.”
International clampdown on corruption
Certainly, Britain will now play its fullest part in the international clampdown on corruption as the Bribery Act comes into force.
The Act will allow the country to tackle what has always been a serious obstacle to trade and development without placing additional burdens on business and legitimate enterprise.
In essence, the Bribery Act will:
- introduce a corporate offence of failure to prevent bribery by persons working on behalf of a business (a business can avoid conviction if it can show that it has adequate procedures in place to prevent bribery)
- make it a criminal offence to give, promise or offer a bribe and to request, agree to receive or accept a bribe either at home or abroad (the Act also covers bribery of a foreign public official)
- increase the maximum penalty for bribery from seven to ten years of imprisonment with the threat of an unlimited fine
Guidance on the type of procedures businesses can put in place to prevent bribery has been available since March, allowing businesses to familiarise themselves with the new legislation and ensure they are prepared (access the dedicated web links at the foot of this page).
Improvement of business opportunities
Justice secretary Kenneth Clarke said: “A free, fair and competitive global market is vital to the growth of British industry. Bribery and corruption has a direct impact on the ability of honest businessmen and women to export and to make their living. By tackling bribery we believe we can improve business opportunities for enterprising citizens.”
Clarke added: “The guidance that is already available should reassure companies, especially those smaller businesses with limited resources. We will demonstrate that the prevention of bribery is commonsense and does not require unduly expensive or onerous procedures for legitimate businesses.”
The Justice Secretary also stressed that normal corporate hospitality will be largely unaffected by the new Act, which will reassure businesses hoping to make the most of the opportunities provided by the Olympic Games in 2012.
Vince Cable, the secretary of state for business, commented: “We have listened to the concerns from business and published guidance three months ago to help companies large and small prepare ahead of last Friday’s launch.”
He added: “As we focus on growth and rebalancing the economy it’s vital that our companies can compete on a level playing field. The new Act will boost the prospects of UK businesses and is an important step forward for ethical standards.”
Guidance for companies has been published on the Ministry of Justice website along with easy-to-understand ‘Quick-start’ guidance for small business.
As well as advising on anti-bribery procedures, the guidance includes practical Case Studies, including some focusing on hospitality, facilitation payments and joint ventures.