UK government to review Bribery Act as business fears mount

British business has campaigned hard against the Bribery Act that received Royal Assent last April and which many claim are much stricter than laws in other European countries, could damage economic growth and remain very broad and unclear. The Act aims to provide a modern and comprehensive scheme of bribery offences that will enable courts and prosecutors to respond more effectively to bribery at home or abroad, the Ministry of Justice explained last year. The Act intends to provide a more effective legal framework to combat bribery in the public or private sectors, including any dealings a UK company has overseas. It creates a discrete offence of bribery of a foreign public official and aims to help tackle the threat that bribery poses to economic progress and development around the world. hideThe new Act will place a penal penalty on directors, including jail sentences of up to 10 years, if they, or people within their organisation, break the new law. The Act was discussed in depth during the annual Institute of Risk Management (IRM) conference last November when it was argued that in some countries certain payments, which could be seen as bribes, are part of life and facilitate trade. Outlawing them for UK companies would place its organisations at a disadvantage, argued speakers. “It is clearly an issue that is causing a big challenge in the humanitarian and the aid sector which I work in,” said Pesh Framjee, Head of Non Profits for the audit, tax and advisory service, Crowe Clarke Whitehill LLP, “In situations whereby you have an emergency and you have to get trucks through customs and someone will not open a file until some dollars have been passed across the table. “Understanding now what the Bribery Act says, even on issues like facilitation payments, is going to be very challenging for UK organisations working in the private sector and the voluntary sector. Because the same rules do not apply across the world and we are not going to be playing on level playing fields when we compete for work, business and contracts across the world,” he explained. UK risk management association AIRMIC has also discussed the new Act and registered concerns about it. Broader business groups have also focused on the vagueness of the new provisions that they argue could mean executives may end up in court and even prison after unwittingly committing an offence. In response to these concerns the prime minister’s office has reportedly confirmed that it will carry out the review of the Act just weeks before it was supposed to come into force. The London Evening Standard newspaper reported this week that Jonathan Djanogly, a junior justice minister, had condemned the way the Bribery Act was pushed through the Commons weeks before the general election last year as ‘hardly an example of thoughtful or effective government’. Mr Djanogly reportedly first issued the warning in a letter of March 4 last year when he was solicitor general with the then opposition Conservatives. The newspaper said that the legislation may now go before a ‘star chamber’ chaired by Chancellor George Osborne and Business Secretary Vince Cable. A government spokesman reportedly told the Standard that the law is being looked at in the context of a review of burdens on the growth of UK business. But not everyone was overjoyed to hear reports of the review. Global compliance specialist World-Check said that the introduction of the UK Bribery Act would set ‘a new bar’ in the fight against business corruption and any move to dilute, or drop, the proposed Act would be detrimental to the UK from a reputational point of view and open to question the UK’s commitment to stamping out bribery. It did, however, concede that the Act, that replaces laws that date back to the late 19th century, needed clarification and further guidance on many aspects. Robert Mitchell, head of enhanced due diligence, EMEA, World-Check, said any review of the UK Bribery Act in its current form must not compromise the country’s move to a more just and bribe-free business environment. “Widespread confusion about the impact the Act will have on business, particularly with regards to adequate procedures and corporate hospitality, points to the fact clear guidance from the Ministry of Justice (MoJ) is crucial. But any move to about-turn on approved legislation could have a disastrous affect on Britain’s commitment to stamping out corruption, and its chances of winning international business.” Mr Mitchell said it should be remembered that the previous government initiated the introduction of legislation that would see the introduction of the Bribery Act, which was then passed by the then Conservative opposition. He said while there are a ‘number of grey areas that require urgent clarification’, the Act casts a wider ‘jurisdictional net’ than the US Foreign Corrupt Practices Act (FCPA) once and for all—stating that corruption, private or public, large or small, is illegal. “We feel strongly that the Act must have substance and be appropriately enforced—it is far more relevant and effective than the current Victorian legislation and quite simply, any civilised nation should not be seen to be reneging on plans to eliminate the cancer of bribery,” Mr Mitchell said. He said while UK businesses have been convicted of bribery in other jurisdictions, the number of organisations being convicted in the UK is considerably lower in comparison. “That’s not to say cases weren’t brought before the courts but the current legislation has proven wholly ineffective lacking both clarity and teeth, making convictions for bribery near to impossible—this should be a clear enough sign that our legislation needs updating. “Looking post implementation, the new laws on bribery and corruption will only truly demonstrate that the UK has changed its attitude to corruption with an increase in the levels of prosecution and severity of outcomes which will really demonstrate—and plea bargaining, as an incentive to self report, will be one way of achieving this.”

UK government to review Bribery Act as business fears mount

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