UK Bribery Act receives Royal Assent
The UK has been criticised for some years for its failure to develop a robust anti bribery regime and in 2009 fell to an embarrassing 12th in a list of the least corruptible countries in Europe prepared by Transparancy International. The country’s reputation was further damaged by revelations relating to arms sales. The new Act however takes Britain into the forefront of the international anti corruption drive in terms of breadth of coverage and severity of penalties.
Many businesses may have failed to take heed of its passage on the grounds that it did not seem to be relevant to them however the breadth of its scope means that it will be relevant to nearly every business in the country. The Act outlaws both the giving and receiving of bribes and it is clear that it is also intended to prohibit excessive hospitality. The corruption of both public officials and private companies is covered and unlike the US equivalent legislation making payments to facilitate the performance of “routine government action” becomes an offence.
Companies that do business in the UK or are otherwise connected with this country will need to take great care in the appointment of agents and distributors both here and abroad. Unless the company can show that it had effective procedures in place to prevent bribery it will be liable for offences committed by its employees and business partners, including joint venture partners. The penalties are extremely severe with unlimited fines for companies and possible prison sentences for individual managers.
What then must companies do? The Act provides that further guidance will be issued before the Act comes into effect however as substantial procedural changes will be required companies should be starting to plan now. Firstly they need to consider how they will conduct due diligence on potential partners and how they will raise the issue with existing partners. Codes of practice will need to be developed for staff and partners along with appropriate training programmes. A guide to the sort of standards that might be required can be found on the website of Transparency International. Wording will need to be added to standard commercial contracts committing the partner to ethical standards compatable with the Act and the company’s internal code and consideration given as to how existing contracts can be brought into compliance.
Clearly this short note can only highlight a few key features of the legislation. For a more indepth discussion of what this could mean for your business please contact me on 0131 202 6527 or at email@example.com