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Anti-graft chief warns that further Bribery Act delays could be 'fatal'

Thomson Reuters Foundation - Fri, 11 Feb 2011 11:34 GMT
Author: Complinet
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Anti-corruption body Transparency International has said that it would be "fatal" if the delay to the Bribery Act 2010 led to the implementation date being pushed much beyond May. Chandrashekhar Krishnan, TI UK's executive director, told Complinet that there was a risk that the longer the act was delayed, the more chance there was that it would be watered down. TI has attempted to "debunk" six Bribery Act myths which it says have been perpetuated by the negative and misleading media coverage surrounding the tough new legislation. The Act, which was due to take effect in April, has temporarily been put on hold while the government attempts to re-jig its adequate procedures guidance. Firms have been promised three months to take on board the guidance but no date has been given for when it will be released.

Krishnan said that a recent media campaign which sparked fears about the draconian impact of the new rules had revealed "nothing new". He said that concerns about the Act's effect on business promotion and hospitality had been dealt with in parliament when the bill was being passed. The consultation period was over and the government should instead be taking its own counsel; he thought that any delays beyond May would be "fatal". He said that the UK needed to consider the international implications of delaying the regulations. He pointed out that the Organisation for Economic Cooperation and Development's working group on bribery was due to meet in early summer, and it would be "hugely damaging" if the OECD criticised the UK for going back on its commitment to meet the April deadline. Krishnan said he was concerned that the delay would give interested parties the opportunity to re-open issues that had previously been dealt with. The fact that the government had not yet committed itself to a specific time frame for implementing the Act was "very disturbing", he said.

Krishnan said: "Our position is that there should be absolutely no dilution of the Act. It was passed by parliament and there should be no attempt to second-guess what the intention of parliament was in passing the Act. If the guidance can clarify legitimate concerns that were expressed by business then that is OK, but if one then attempts to second-guess what was intended by certain provisions, that is very dangerous territory."

Six myths

TI said that the six myths included the following:

  • It is gold-plated legislation.
  • There has been inadequate consultation or time to prepare.
  • It is impossible to do business without making facilitation payments which the Bribery Act bans.
  • Hospitality, gifts and promotional expenditure are a grey area in the Act and more clarity is needed.
  • Everyone else pays bribes. If British companies do not they will be at a competitive disadvantage.
  • The Bribery Act is bad for UK plc.

TI said that the UK anti-bribery stance was no tougher than that taken by other members of the OECD; that there had been at least four formal periods of consultation since 2005; that facilitation payments were already illegal under current laws; that excessive hospitality which constituted a bribe was illegal under the Foreign Corrupt Practices Act; that the Act was not a unilateral initiative by the UK; and that bribery was already illegal under UK law.

Weaker law

Last week Mark Pieth, the chair of the OECD's working group on bribery, expressed concern at the delay: "Establishing a level playing field for international business is as important now as ever and will help strengthen the global economic recovery. As a G20 country, the UK bears a special global responsibility and should lead by example." An earlier OECD report had warned that delay to the Act would mean that bribe payments would be governed by the current "weaker law".

Following news that the legislation faced further delay, Nick Benwell, a partner at Simmons & Simmons, warned that there was likely to a "significant" redraft of the guidance. He added that the government might also look to bring the changes into force but might exclude for the time being s7, which introduces the corporate offence of failing to prevent bribery. Another option might be for the s6 offence relating to the corruption of foreign public officials to be cut.

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