Although the UK’s anti-corruption watchdog has branded official guidance to the Bribery Act as a “deplorable” handbook for evasion, the head of the Serious Fraud Office has pledged to take a tough stance on enforcement.
The Act, which passed into law last April, is now due to come into force in July. The delay of more than a year was due to a public consultation that has seen the coalition government subject to furious lobbying from businesses to soften its impact.
Justice Secretary Ken Clarke denied the legislation had been watered down, however, claiming it would “reinforce Britain’s reputation as a leader in the global fight against corruption”.
The guidelines have clarified that there will be no exemption for “facilitation payments”, deemed to amount to a bribe, but gifts, tickets to sporting events and dinners will be permitted to reflect “good relations” with customers.
Controversially, however, companies listed on the London stock exchange will not automatically be covered by the new laws and it will be left to the courts to decide whether individual firms fall under the legislation or not. Moreover, employers will “not need to put bribery prevention procedures in place if there is no risk of bribery on [its] behalf” elsewhere in the supply chain.
Katja Hall, chief policy director at employers’ lobby group the CBI, welcomed the guidance, saying that the government had “listened to concerns that honest companies could have been unwittingly caught out by poorly-drafted legislation”.
But transparency International UK, the UK’s anti-corruption watchdog, was highly critical. It attested that the coalition government had “surrendered to last-minute lobbying by some business groups, opening up loopholes that could allow dishonest companies to continue paying bribes”.
Chandrashekhar Krishnan, the body’s executive director, said: “The Bribery Act, as passed by the last Parliament, is one of the best anti-bribery laws in the world. But the guidance will achieve exactly the opposite of what is claimed for it. Parts of it read more like a guide on how to evade the Act than how to develop company procedures that will uphold it.”
Such a situation was “deplorable” and indicated that the Ministry of Justice had “exceeded its brief” by undermining the Act and limiting its effectiveness, she added.
“There is now a significant risk that bribery will go unpunished. For instance, foreign companies could be listed on the London Stock Exchange, pay bribes and get away with it. This will disadvantage all honest companies and, perversely, turn on its head the government’s stated aim of creating a level playing field through the Act’s extra-territorial reach,” Krishnan said.
But Richard Alderman, director of the Serious Fraud Office, told the Financial Times that enforcing the new Act would be a “high priority” for prosecutors despite their “scarce resources”.
“I would say to companies not to rely on very technical arguments that…..you are outside the scope of the Act,” he said, adding that even if organisations claimed only to have a stock market listing, the SFO would investigate its UK activities if it received evidence or tip-offs about malpractice.
