Companies that fail to prevent bribery will face unlimited fines under the new rules, but guidance on what is regarded as 'adequate process' won't be available until after the election.
Businesses will face tough new penalties for failing to prevent bribery under the new Bribery Bill passed this week, in the biggest shake up on anti-corruption laws in a century.
The Bill was passed by the House of Lords on Thursday and is expected to receive Royal Assent imminently. Once approved, the Bill will bring the UK in line with OECD anti-corruption guidance.
- Creates offences of offering, promising or giving of a bribe and requesting, agreeing to receive or accepting of a bribe either in the UK or abroad, in the public or private sectors.
- Creates a discrete offence of bribery of a foreign public official in order to obtain or retain business.
- Creates a new offence in relation to commercial organisations which fail to prevent a bribe being paid by those who perform services for or on behalf of the organisation.
All offences carry a maximum prison sentence of 10 years, with the exception of the offence relating to failure to prevent bribery, which carries an unlimited fine. Where a director is convicted of bribery, they may also be disqualified from holding a director position for up to 15 years.
"Companies best equipped to deal with the new law are likely to be those that have already implemented systems and controls to tackle anti-money laundering and as a result have resources in place that can be expanded to cover checks on third-party agents", commented Mark Dunn, risk market planning manager at LexisNexis.
Other UK businesses, however, will have to move quickly to assess their risk profile, find the resources in their organisation to tackle the necessary due diligence and set up robust processes.
The Ministry of Justice is expected to publish guidance on what will be regarded as ‘adequate process’ for companies to implement, but it will not be available until after the general election.
"The guidance issued so far on putting the Bribery Act into practice has been too high level. It is expected that some further guidance will be available three months before the corporate offence comes into force but this is simply too late for many businesses to be able to make the necessary changes in time," said John Smart, head of the fraud investigation dispute services team at Ernst & Young.
“It is no longer good enough to rely on a dusty policy to cover this risk.The Bribery Act intends all UK businesses to take positive action to eradicate bribery and corruption from the board to the shop floor," he added.
"This can't be a ghost policy. It's crucial that organisations take a proactive stance by educating staff and eliminating any fraudulent activities immediately- not waiting until they've been caught in the act. Those firms which don’t will be penalised appropriately,” commented David Noble, CEO of the Chartered Institute of Purchasing & Supply today.
Before the Bill was passed, the Conservative Party - backed by the CBI - proposed more than 20 amendments. The CBI had expressed concerns that the Bill would hamper the competitiveness of UK businesses by barring them from public contracts in the EU.
In a blog post on the Conservative party website, shadow minister for corporate governance Jonathan Djanogly said: "This is an important bill in re-establishing our national credentials as champions of fair business dealings and trade transparency. I aim to ensure the bill is consistent, effective and covers existing gaps in the law."
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