Bribery Act: one year on

29 June 2012

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1 July 2012 | David McAlonan

One year after taking effect, business and anti-corruption campaigners still dispute the impact on companies of the UK’s Bribery Act.

While the legislation has been described as among the toughest in the world, there is disagreement about the amount of attention paid to it by UK firms.

The Act, which was implemented on 1 July 2011, overhauled the law on offering or accepting bribes. In particular, the legislation increases the penalty to a maximum of 10 years in jail and creates a corporate offence of failing to prevent bribery. This includes the behaviour of agents acting on behalf of a British company, whether in the UK or abroad.

However, the Act’s introduction was delayed to mid-2011 in response to concerns that the wording of the legislation would unintentionally catch otherwise normal commercial activities such as corporate hospitality and promotional expenditure. In an attempt to address business worries, the government drew up and published guidance in early 2011 to clarify the scope of the new law.

While supporting the principle underlying the Bribery Act, Jim Bligh, head of labour market policy at the Confederation of British Industry, told SM that in the past year companies have taken a “very conservative approach to assessing risk” due to fear of non-compliance.

“They have spent a significant amount of money and management time trying to make sure that everybody on the front line is informed and educated about what the Act means for them,” he said. “So far we have seen an impact in terms of business’s willingness to take up opportunities that they could legitimately take up.”

In contrast, the chief executive of Transparency International UK, Chandu Krishan, stated that “concerns in some business circles that the Act would handicap companies, especially when operating in high risk countries, have been unfounded”. Calling for greater enforcement, he added: “Awareness of the importance of adequate anti-bribery procedures among smaller companies appears to be poor.”

Meanwhile, Jonathan Middup, UK head of the anti-bribery and corruption team at Ernst & Young, told SM: “There haven’t been any corporate prosecutions under the Bribery Act as yet. Business organisations have continued to complain that it makes British businesses comparatively uncompetitive, although the evidence to support that needs to be looked at quite carefully.”

The Act was passed in 2010 to bring the UK into line with the requirements of the OECD Anti-Bribery Convention, which entered into force in 1999.

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