BRIBERY ACT BEGINS
01 Jul, 2011
Bribery Act begins, no excuses for non-compliant culture
International law firm Freshfields Bruckhaus Deringer says companies who carry on part of their business in the UK need to begin instituting a range of measures to ensure compliance with the UK Bribery Act which comes into law today (1 July 2011).
Raj Parker, a global investigations partner at Freshfields commented: “The Act is drafted in a strict and unforgiving way and if properly enforced it will seriously affect the way in which business is conducted in certain markets,” he says.
“Compliance procedures are a must as they ensure a business can develop a culture that keeps it in line with the Act and consequently give it a level of comfort about its activities around the world,” he says.
Parker says that some companies may believe they’re compliant with the Act by instituting guidelines to employees against bribery, but, ‘underpinning a change in culture requires in-depth compliance work that needs to be undertaken over time.’
Examples, largely concerning the people-side of the equation, being: Presentations and training to board and senior management; a review of remuneration principles and guidance around senior executive remuneration, including a review of long-term incentive plans, share schemes and bonus plans; drafting new employment and legal contracts to address gaps in compliance; and instituting guidelines to employees about how they ought to conduct transactions with third parties.
“A proper assessment of risk in the business worldwide cannot be underestimated,” says Parker.
Parker says the Bribery Act is the most far-reaching bribery legislation in the world and companies must assume that their activities, particularly in new and emerging markets, are under a rigorous regulatory microscope with regulators around the world focusing on this issue and sharing information with each other. Dealing with multiple regulators around the world will become commonplace.
Concluding he says: “Third parties operating on behalf of a company in far flung corners of the world bring about criminal liability, a lack of due diligence on a merger or acquisition could also open up a business to liability for bribes paid by its target or partner. There are a multitude of activities which can spring an investigation.”