Sunday 20th April 2014
flextrade
BlackRock has been awarded its first Renminbi Qualified Foreign Institutional Investor (RQFII) licence by the China Securities Regulatory Commission (CSRC) - An index joint venture between FTSE Group and Canada’s TMX Group has acquired the indices business of MTS, a European electronic fixed income trading business owned by the London Stock Exchange - The European leveraged finance market is set to undergo a shift this year, as private equity sponsors veer back towards loans to finance leveraged buyouts, says S&P Capital IQ - Turkish corporates are the most exposed among EMEA emerging markets to a scenario of slowing growth, rising interest rates and a persistently weak local currency, according to Fitch Ratings - London-based Global Markets Exchange Group (GMEX) is in talks to acquire an equity stake in ALTX Africa Group, a new exchange operator focusing on East Africa - Alternative asset managers with expertise in high-yield fixed income and distressed assets are upping their investments in the peer-to-peer loan market, according to a new report from Cerulli Associates.

Blog

Corporate Review

By Partners at BDO

Has the Bribery Act had an Impact?

Friday, 13 July 2012 Written by 
Has the Bribery Act had an Impact?The Bribery Act (The Act) eventually came into force on 1 July 2011, following intensive lobbying by corporate and international lawyers who felt the original draft legislation was unclear and feared it would unfairly prejudice UK companies against others operating in the international marketplace.  So, 12 months on, what has been its impact?http://www.ftseglobalmarkets.com/

The Bribery Act (The Act) eventually came into force on 1 July 2011, following intensive lobbying by corporate and international lawyers who felt the original draft legislation was unclear and feared it would unfairly prejudice UK companies against others operating in the international marketplace.  So, 12 months on, what has been its impact?

Well, there has been one prosecution so far – this was the conviction of Munir Patel, a 22 year old administration clerk at Redbridge magistrates court who received a three year prison sentence for earning £20,000 for helping UK drivers avoid penalty points.  This seemed to be quite a severe sentence, but he had allegedly repeated the offence fifty times.

However, there have been no prosecutions or even publicly announced investigations of large corporates operating overseas, which were the ones really expected to be targeted by the Act.  So, does this mean that the Act has had no impact and can safely be ignored?  BDO doesn’t think so, for the following reasons. 

  • SFO investigations into bribery take time, and there are rumours to suggest that the SFO has begun a number of investigations with a team of up to 50 staff working on corruption investigations
  • A lot of large companies have taken the opportunity to review their anti-bribery and other similar procedures and have implemented the 6 Adequate Procedures (Proportionate procedures, Top level commitment, Risk assessment, Due diligence, Communication & training and Monitoring &review)
  • Companies have tightened up their rules on corporate hospitality by defining more clearly what is allowed and what is not and setting explicit monetary limits.  Anecdotally, this may have reduced demand for corporate hospitality at major English summer events and for tickets to the London 2012 Olympics
  • A small number of companies may have decided they can no longer operate in certain countries with examples cited in Africa and India.  This is unfortunate, as it has meant less international trade for those companies.

The most challenging issue remains on facilitation payment (small payments for getting through a police checkpoint or getting your goods released by customs etc).  What are companies meant to do about these?  The Act says they are illegal, and yet the SFO says it will not prosecute isolated instances.  BDO’s recommendation is to follow SFO and Transparency International guidance -  train staff who are at the cutting edge of having to pay facilitation payments, and do everything possible to avoid paying them, but if this does not work, consider whether you are prepared to pay or not, and if you do pay, record it clearly and openly in your accounts.

To review your client’s anti-bribery processes and procedures, please click here to access BDO’s Anti-Bribery and Corruption diagnostic tool or speak to Andrew Maclay on 0207 893 3487.

Andrew Maclay

Andrew has specialised in all aspects of Forensic Accounting for the last 14 years. He has worked on a large variety of disputes involving fraud and corruption investigations, contractual claims and quantifying losses. Andrew is a Fellow of the Institute of Chartered Accountants in England & Wales, a Certified Fraud Examiner and an associate member of the Chartered Institute of Arbitrators. Between 1991 and 1994, he worked in Burundi, Africa and is fluent in French. He lectured at Commonwealth Secretariat conferences on corruption investigation in Abuja, Nigeria and Jaipur, India in 2007. He leads BDO UK’s anti-bribery service line and has represented BDO International at the OECD Working Group on Bribery. His main areas of expertise are anti-bribery, international arbitration and insolvency litigation.