03 February 2005 | David Arminas
Supply chain professionals face uncertainty over anti-corruption rules after the government was forced to review its regulations.
The Export Credits Guarantee Department (ECGD), which insures UK companies' contracts with overseas clients, has agreed to a public consultation on its rules that businesses have to guarantee their overseas deals are free from corruption and bribery.
The regulations were relaxed in May after business groups claimed British firms could lose out to competitors in countries with looser rules.
But a High Court challenge this month by Corner House, an anti-corruption group, has forced the ECGD to rethink the relaxation of the regulations.
As a result, it could have to reinstate random audits of foreign transactions and demand that companies disclose commission payments.
But the government could opt for a compromise similar to anti-corruption guidelines in the US, according to Andrew Berkeley, a barrister and consultant to the multinationals group of the International Chamber of Commerce.
"In the event of bribery issues, companies will have to demonstrate that they had in place all the machinery they could have to catch and identify corrupt practices," said Berkeley, who worked on the Organisation for Economic Co-operation and Development's anti-corruption rules.
Les Pyle, chief executive of Partnership Sourcing Limited, a supply chain advisory group, said a compromise could work but warned it could be difficult: "One man's reasonable effort is another man's not good enough. "