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Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539
Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539

Understanding Global Bribery and Corruption Investigations: A Review

Author: Azizur Rahman  30 September 2013
5 min read

The government has indicated that the Bribery Act may be reviewed to help small and medium-sized businesses’ compliance burden and clarify the issue of facilitation payments. But the real thrust of the law is unlikely to become any gentler than it is now for anyone under investigation.

The Bribery Act has always sparked strong feelings since it was passed three years ago. It was hailed as a powerful weapon in the fight against corruption by the then head of the Serious Fraud Office (SFO), Richard Alderman. But he is no  longer in post, the Act has yet to lead to one corporate prosecution and now there is official talk that it may lose a little of its bite. So the questions now have to be asked: Is the Act ever going to be an allpowerful scourge of corrupt corporates? Or is it already a white elephant that is set to lose what little menace it has?

Without wanting to sit on the fence, the answer seems to be somewhere in between the two. A beast that hasn’t yet realised its own strength, maybe; or at least one that hasn’t yet displayed it. Yes, the government has stated that it wants to look at ways of easing the compliance burden on SME’s and may even reconsider the Act’s ban on facilitation payments. If it went ahead with either course of action it would undoubtedly be lessening the power of the Act. By reviewing the issue of facilitation payments, the government would certainly be pleasing those in the City and the media who have claimed such restrictions are tying the hands of British companies abroad. There is also little doubt that anything that takes some of the compliance burden off SME’s would be welcomed. But it would be stretching a point to say that such activities would mean the Act would suddenly become a toothless warrior.

Those who point to the very small number of Bribery Act prosecutions – and to the fact that they have all been against individuals – as proof of its inability to tackle corruption in companies are missing the point. Any prosecution under the Act against a corporation will involve in-depth investigation and careful legal preparation before any charges are laid, never mind what is required before a case comes to trial. All of this takes time. It has to be remembered that the Bribery Act only came into effect in 2011. In real terms, two years is not a huge amount of time to bring a case to trial. It may well be, therefore, that more and larger prosecutions are in the  pipeline but we just haven’t yet been made aware of them. Which begs the question that if so little has happened so far with the Bribery Act, why the need to tinker with it? As it can’t yet be judged on results it would be  premature to announce that it has failed, succeeded or been unnecessary. After all, it would be contradictory to criticise it for being too tough on SME’s and facilitation payments while also claiming it serves no purpose.

Before the Bribery Act, the UK’s laws on bribery and corruption were inadequate and poorly enforced. The Act was a considered response to the need for fresh legislation in an era of global business. To start making large-scale amendments to it now would seem a knee-jerk reaction. It would also serve little purpose. Advice on the Act is out there for anyone who wants it. At Rahman Ravelli, we regularly advise companies of all sizes (and in all lines of business) on how to comply with the Act. It is true that many companies may need this guidance. But that does not necessarily mean that the law has to be changed. The Act was about setting high, international standards. To drop those standards now would be a backwards step.

What has to be remembered when anyone considers the Bribery Act is the sheer scale of the legislation. We can safely assume that any tinkering with it will not change the bulk of its provisions and so it would be foolish for  anyone to think that any review will leave them with scope to carry on - or even begin – any wrongdoing. The Act makes it an offence to bribe someone, receive a bribe, bribe a foreign public offi cial or fail as a commercial organisation to prevent bribery anywhere in the world. This last category is perhaps the most wideranging, as it places an obligation on any organisation with UK links to make sure none of its staff, agents or third parties are involved in bribery. It also has to be considered that the Act makes it possible for a firm’s senior staff to be personally liable for any bribery if they knew about it. Under the Act, penalties can include up to 10 years’ imprisonment, unlimited fines, seizure of assets belonging to both the company and individuals and debarment from winning public contracts. With such provisions, only a fool would either consider the Act toothless or hope it would become so if and when the government concludes any review into SME compliance and facilitation payments. And only a fool (or at the very least a huge optimist) would think that the Act or any developments surrounding it make any efforts to comply with it meaningless.

The Act has put bribery at the top of the boardroom agenda. Ignorance of the law is never a defence. No one can claim as a defence that they were unaware what they or their company did – or even what others did for them or, at least, in their name – was illegal. Everyone has to be aware of corruption within their ranks. But, much more importantly than that, they have to be able to demonstrate that they have taken action to reduce the potential for it.

The Ministry of Justice has issued guidance emphasising the need for risk assessment, due diligence, monitoring and reviewing of procedures. Rahman Ravelli has been helping companies create and execute anti-bribery  policies since the Act first looked like becoming reality. Many companies, however, have tried to get by with the bare minimum when trying to meet the requirements of the Act. But, however much of the Act ends up being reviewed, such an approach will always fall short. The Bribery Act is not the type of legislation that expects lip service to be paid to it. Companies and individuals have to be determined to remove all potential for bribery if they are to comply with the Act. But they also have to bear in mind the importance of going about it in the right way. Rushing headlong into creating a series of internal procedures may be done with the best of intentions but it is no guarantee that it will ensure you comply with the Act. Such procedures have to be what are classed as  “adequate procedures’’ if the company or individual is to have any hope of defending themselves should they be investigated for breaching the terms of the Act. With the best will in the world, it will be impossible for companies and individuals to make sure their procedures are deemed adequate for the purposes of the Act without them having taken expert legal advice.

A 2012 survey of 1,000 business managers revealed that only 150 had received any training or proper guidance from their employers about the Act and its implications. It is a disturbing statistic, considering the scope of the Act, its penalties and its global reach. Any conclusions that the government may draw and act upon from its review of some aspects of the Act will do little to change its basic nature. Those hoping the Act will be a neutered beast once it has been reviewed are seriously misguided. It may undergo the odd cosmetic change but this is one animal that could sink its teeth into many misguided optimists any time soon.

Azizur Rahman C 09369

Azizur Rahman

Senior Partner

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Aziz Rahman is Senior Partner at Rahman Ravelli and its founder. His ability to coordinate national, international and multi-agency defences has led to success in some of the most significant corporate crime cases of this century and top rankings in international legal guides. He is recognised worldwide as one of the most capable legal experts regarding top-level, high-value commercial and financial disputes.

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