The European Banking Authority has postponed stress tests until next year as supervisors look into how major banks classify and value assets. "Concerns remain on asset quality and forbearance, which need to be addressed," Chairman Andrea Enria said. "This is also a necessary precondition for the credibility of the next EU-wide stress test."- The International Monetary Fund has conducted a comprehensive analysis of monetary policy at central banks in Europe, Japan and the US, noting that their efforts to encourage growth and improve market stability largely have been successful. The IMF also says that if the economic outlook worsens, central banks in Europe and the US could ease monetary policy further; however, they risk diminishing returns- that the ETF assets linked to the FTSE EPRA/NAREIT Global Real Estate Index Series, reached $US10.5 billion in assets under management, as of 30 April 2013. In total, more than US$176 billion of ETF assets are currently benchmarked to FTSE indices worldwide - The 24% rise in Lloyds Banking Group shares this year following the 85% rise in 2012 shows the bank's return to the private sector and the resumption of dividends is getting closer, shareholders have been told.the bank's shares hit a two-year high of 61p yesterday, chairman Sir Win Bischoff told the annual meeting in Edinburgh the prospects of a sale of the taxpayer's 39% stake have improved with the bank's return to profit, and dividends will be restarted "as soon as we are able". He added: "We fully understand the difficulties their absence is causing shareholders." - The Association of German Pfandbrief Banks (VdP) says that prices on the German market for owner occupied residential properties rose again in the first quarter of 2013. The Price Index for Owner Occupied Housing went up by 3.4% in the first three months of this year compared with the corresponding quarter one year before. Developments were driven in particular by the market for condominiums, with prices climbing 5.7% year-on-year - Judge Daniel Hurley of the US District Court for the Southern District of Florida entered supplemental consent orders against defendants Philip Milton and Trade, LLC, both of Palm Spring Gardens, Florida. Milton must now pay restitution of more than $10.8m and a further civil monetary penalty and Trade, LLC, to pay restitution of over $11.4m and a $28.4m civil monetary penalty for operating a multi-million dollar Ponzi commodity pool scheme.

Blog

Corporate Review

By Partners at BDO

Has the Bribery Act had an Impact?

Friday, 13 July 2012 Written by Andrew Maclay

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.