UK’s Bribery Act fails to fulfill expectations

The UK Bribery Act directly affects UK criminal law, and is utilised to combat bribery-related offences in the UK and beyond. It outlines criminal penalties for people who either promise or deliver a bribe, agree to or receive a bribe, or bribe foreign officials. Besides penalties for individuals, commercial entities may also be charged under the Bribery Act if one of their personnel is involved in a bribery transaction and the company or organisation fails to prevent the event from occurring. Even non-UK businesses that do business in the UK can be charged and/or convicted under the Bribery Act.

If convicted of any actions included in the Act, the penalty can be as much as ten years imprisonment, and the fines that can be levied are unlimited. Property of an individual or organisation can be confiscated, and company directors can be disqualified if convicted.  Critics point out that bribery is an accepted practice in much of the world, and that this legislation may put UK businesses at a disadvantage in many markets.

Although guidance and interpretation of the Act had not been published yet, October 2011 saw the first conviction under the Bribery Act. Munir Patel, a clerk at the Redbridge Magistrates Court, was convicted of accepting £500 to alter speeding convictions on the court’s records. Several of the people who paid the bribes are also under indictment and may eventually be convicted. They include three other court officials, as well as several motorists.

Whilst the extraterritorial effect of the legislation is being debated, the reach of the Bribery Act is not unique. The US has similar legislation, the Foreign Corrupt Practices Act (FCPA), which is similar in many ways. The FCPA, however, does allow ‘facilitation payments’, which many companies insist are necessary to do business in developing nations. The Bribery Act does not. Given the strong ties between UK businesses and those in India, where bribery is common, many people foresee this legislation becoming something that can affect the day-to-day operations of many multinational organisations.

Guidance from the UK Ministry of Justice has noted that the effect of the Act on businesses will differ depending, in large part, on the size of the business and how much overseas traffic that business has. The ministry suggested that a company-wide risk assessment was the best first step for many organisations, as well as training for all employees involved in any kind of business dealings where company money will change hands with government officials or decision-making employees of another company.

With the Bribery Act making it clear that corporate officers can be held liable for the actions of others in their employ, it is critical that all employees understand the seriousness of this legislation. Under the Bribery Act, all the prosecution has to do is show that organisational systems to prevent bribery may have been inadequate; proving that that the systems were actually adequate falls to the company.