Corruption Clampdown That Still Leaves Bribery Grey Areas

Article excerpt

Byline: Jeremy Cole

ONE of the toughest anticorruption laws in the world comes into force today in the UK. From now on, you can't use "improper inducements", including cash or corporate hospitality, to persuade others to do something.

If you do, you could end up with 10 years in jail and your company an unlimited fine. Not surprisingly, the Act has received a lot of attention, although not always correctly. Following the initial furore over corporate hospitality, it's clear that taking business contacts to Wimbledon is unlikely to result in prosecution.

But what should spark greater concern are the areas of the Act that are far stricter than previous UK laws or any other bribery legislation elsewhere.

These include the potential for corporates to be criminally liable for failing to prevent bribes being paid not only by their employees but, controversially, by third parties. The Act also creates the offence of being bribed (as well as bribing).

Alarmingly, too, there are grey areas that continue to be debated. Last week, Serious Fraud Office boss Richard Alderman told an audience of private-equity firms they should only invest in "companies that are FCPA [Foreign Corrupt Practices Act] and Bribery Act compliant". This suggests the SFO may be inclined to look closely at the role played by a privateequity backer in a company, which is a more aggressive and perplexing interpretation of the Act than previously expected.

It prompts the question, where is the end if the SFO chooses to go down this route? Could a privateequity company then also be responsible if one of the organisations it owns is accused of breaching the Health and Safety at Work Act? Or the Equality Act? It also remains to be seen where the SFO will draw the line on foreign companies caught by the Act. …