The House of Commons has passed the Bribery bill with amendments

A quick survey

The Bribery Bill, designed to bring the UK into line with international anti-corruption laws, has been passed by the House of Commons and is likely to receive Royal Assent today (Thursday April 8).

The looming UK General Election forced the government to negotiate with the other parties so it could rush through those Bills that it is passionate about before going to the polls. Under pressure from the Conservatives the government was forced to make several amendments to the bill, according to reports.

The changes introduced by the Bill are still considerable. It extends the definition of bribery beyond the traditional relationships of agents and principals, creating a new strict liability corporate offence and a specific offence of bribing a foreign public official.

Eoin O'Shea, head of the Anti-Corruption Group at Lawrence Graham LLP, said: "This is one of the most important pieces of law-reform since 1997. The strictness of the Act can be seen as an indirect consequence of the BAE case and the damage done to the UK's international reputation by the government's handling of it."

Britain has slipped into 17th place in the corruption perception index compiled by Transparency International.

Control Risks issued the following assessment of the Bribery Bill.

The new UK Bribery Act will prove to be good news for UK businesses according to leading risk consultancy Control Risks. The Act - the biggest change in UK bribery regulation in over 100 years - features a new offence of corporate failure to prevent bribery, requiring all UK companies to implement ‘adequate procedures’ to counteract corrupt practices in their operations, and makes it easier for prosecutors to build cases against companies and individual executives involved in corruption.

‘I think most well-managed businesses recognise this new legislation was severely overdue’ says John Bray, Director of Control Risks’ anti-corruption services. ‘Whilst there will be short term pain for some companies who need to update their anti-corruption measures quickly, the law helps bring about a more level playing field and provides additional protection for individuals when they are faced with demands to pay bribes.’

Control Risks has seen a spike in enquiries over the last year from clients asking for support to revise their compliance procedures in anticipation of the new law. Demand is especially strong from organisations operating in those emerging countries where paying bribes may simply be seen as a cost of doing business. Whilst emerging markets often offer the most exciting growth prospects, many lag well behind when it comes to their efforts at countering corruption. Further, the complexity of modern business structures means that often these investments involve multiple Joint Ventures incorporating host governments and local partners. No country authorises bribery, but in many cases anti-corruption laws and enforcement are badly out of date or ambiguous, strengthening the hand of corrupt officials. In a recent client survey, Control Risks found that almost half of all companies had turned down an otherwise attractive business opportunity on account of a country’s reputation for corruption.

The concern for organisations is how they can navigate this complexity to run a successful business in jurisdictions where their unwillingness to pay bribes or facilitation payments may mean frustrating delays, increased costs and even lost business.

Control Risks’ advice to clients is that corruption never pays.

‘Paying bribes is not only ethically unsound, but it also doesn’t make sense from a business perspective either,’ says Bray. ‘Conducting business in this way poses an enormous risk to corporate reputation and now companies also face the risk of punitive fines and even prison for senior executives. Additionally, more often than not, it only exacerbates the problem with demands for more, and larger, bribes.’