The Ministry of Justice (“MOJ”) has just announced a delay to the implementation of the Bribery Act. It was meant to publish guidance to the Act in January 2011 followed by a three month period before it was implemented in April 2011. No new date for the publication of the guidance has been set. This delay along with news that the Coalition Government is reviewing the Bribery Act followed intense lobbying by business groups. Many felt the Act was originally rushed through Parliament.
The guidance, to be issued by the MOJ, will outline a set of “adequate procedures” that companies are recommended to adopt in order to minimise the risk of being prosecuted for bribery.
Last year the MOJ ran a consultation relating to the Bribery Act (see here for a previous overview of the Act) to obtain feedback on it and the type of guidance required. Page Group attended a number of these consultations.
The main concerns that arose, particularly for small and medium enterprises, are the cost implications of complying with the Act and the belief that it will make it more challenging for British companies to compete for public tenders against companies from other, less regulated countries. The MOJ stressed that the procedures are not prescriptive, nor are they implementing a regulatory regime. The MOJ expects each company to come up with their own “adequate” procedures that work for their size, type and areas of operation. The MOJ added that it is not interested in dragging well run companies through the court. However, this approach does make it difficult for a company to set up its procedures and until a precedent has been set in the UK courts, no one will know if their anti-bribery measures will be sufficient.
Representatives from the Serious Fraud Office also attended the consultations and were keen to encourage self-reporting of bribery if an organisation discovers evidence of it, as well as informing them of suspected bribery in other companies. Guidance for self reporting can be found here. The SFO will also publish its own guidelines.
Certainly the Act is more extreme than the USA’s Foreign Corrupt Practices Act and it will make it more difficult for British companies to operate abroad. However, the principle behind it is to stamp out bribery and corruption which, as a long term aim, can only be a good thing. It is unclear if this latest review will lessen the requirements as it will be difficult to make changes to the Act, but it is hoped that the guidance will provide clear and prescriptive instructions for companies. Whatever the result, Page Group recommends that all companies start preparing their internal regulations to ready themselves for the Act’s eventual implementation. Any new procedures introduced will have the added benefit of limiting the risk of a company becoming a victim of fraud, particularly if investing in emerging markets, as well making it a more transparent company.
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