Preparing for legislation that takes effect in 2011
The UK has passed new legislation on bribery (the 2010 Bribery Act) and, like the existing law, it will also apply to UK citizens and businesses based overseas including in Japan. The new law will come into effect from spring 2011 and is designed to ensure the UK is at the forefront of tackling bribery and encouraging businesses to adopt anti-bribery safeguards.
The act introduces a corporate offence of failure to prevent bribery by persons working on behalf of a firm. It also makes it a criminal offence to give, promise or offer a bribe and to request, agree to receive or to accept a bribe in the UK or abroad.
Bribery is, of course, illegal but it’s also bad for global trade and for business. Overall, UK businesses have a good reputation for openness and honesty. Nevertheless, in some environments businesses can come under pressure to operate in a particular way, including making “customary payments”. But the new law makes clear this is a crime.
Bribing a foreign public official and failing to prevent bribery on behalf of a commercial organisation will be outlawed.
When an inducement is permitted or required by a country’s written law, such an activity will not be considered an offence. But the act explicitly states there is no exemption for customary payments or local culture. This includes “facilitation payments” which are petty bribes to avoid official delays or obstructions in the course of doing business.
The consequences of not complying with the law could be substantive, including unlimited fines and a maximum of seven to 10 years’ imprisonment. A business can avoid conviction if it has adequate procedures in place to prevent bribery.
The act also requires the government to publish guidance on procedures that commercial organisations can put in place to prevent persons associated with them from bribing. There will be a public consultation exercise on this guidance beginning late this summer. The formal guidance will be published early in 2011, to allow time for businesses to make preparations for the act’s new provisions.
The government is committed to supporting ethical UK businesses and to promote good governance overseas. The UK, like Japan, is one of more than 140 countries that have signed the United Nations Convention Against Corruption, which criminalises the official solicitation or acceptance of undue advantages in return for official action or inaction. If, however, you are subjected to persistent official demands for bribes you should contact the British Embassy. We will take up your case with the authorities.
| Information for businesses without anti-bribery procedures or who are seeking to review their approach is available at:
OECD good practice guide: www.oecd.org/dataoecd/5/51/44884389.pdf The UK government provides or sponsors free information through UKTI: The Business Anti-Corruption Portal: The International Chamber of Commerce has detailed case studies to help firms anticipate, prevent and resist bribe solicitation: The Ministry of Justice has more information on the Bribery Act: |
Note: This article is not legal guidance but is intended to help UK businesses familiarise themselves with the implications of the new legislation and to identify tools for managing the risks of corruption overseas.
