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Five years on the Bribery Act has led to a 'step-change' in anti-bribery compliance standards, says expert

Out-Law Analysis | 21 Apr 2015 | 3:51 pm | 2 min. read

FOCUS: The Bribery Act, which was enacted exactly five years ago, may not have resulted in any prosecutions but corporate complacency about the UK's first dedicated anti-bribery law is misguided. The Bribery Act has led to a step-change in anti-bribery compliance standards.

The 2010 Bribery Act was born amid huge public fanfare, plenty of hype and lots of press coverage. It was passed in the 'wash up' before the end of the last UK parliament, exactly five years ago, and came into force just over 12 months later, on 1 July 2011.

In 2015, it is hard to square the reality of what happened under the new law with what the naysayers forecast. We were told that prosecutions would be imminent and UK companies seriously disadvantaged on the global stage as a result of the 'red tape' in the new legislation.

The hype around the Bribery Act focussed on the potential enforcement of new UK anti-corruption laws against UK and foreign companies that fell under the Act's long-arm jurisdiction. The Act criminalises acts of bribery by businesses and those acting on behalf of businesses with a presence in the UK, regardless of where the alleged activity has taken place.

However, five years on the UK economy is the strongest in Europe and predictions of the demise of 'UK PLC' turn out to have been premature.

To date, there have been no corporate prosecutions launched or deferred prosecution agreements (DPAs) disposing of a Bribery Act case. There have been a handful of individual prosecutions under the Act, but none of them were 'Bribery Act' cases in the true sense of the word.

On my travels I have come across corporate complacency, borne out of an apparent lack of action on the part of law enforcement. Last year's EY annual fraud survey, a useful bellwether of global attitudes, revealed some startling findings: over a quarter of chief commercial officers (CCOs) thought bribery widespread in their country, while nearly one in five sales executives said that bribery was widespread to win contracts. Most concerning of all, nearly 20% of respondents reported that their business did not have an anti-bribery policy in place.

But it would be a mistake to equate a lack of prosecutions with a lack of law enforcement activity.

Five years on from the passing of the Bribery Act, bribery and corporate corruption is now on the radar in the UK and elsewhere in a way it was not in 2010 - and public awareness is high.

Compliance standards have changed. In many cases, non-US companies have put in place an anti-corruption programme for the first time. Compliance programmes like these can only continue to evolve: beyond the formulaic approach of a policy, some training and some new forms to new, holistic approaches.

Today there are many compliance experts, but fewer people with real world experience at the sharp end. Sadly, I expect that this disparity will result in compliance gaps which unethical people may exploit. To help plug this gap, I co-edited the recent Transparency International UK publication 'How to Pay a Bribe and How to Stop It', on the basis that unless you know how people engage in bribery there is little chance of being able to stop it.

In the meantime, the Serious Fraud Office (SFO) and other law enforcement agencies have a number of ongoing Bribery Act investigations into companies, and a DPA disposing of a Bribery Act investigation into a company is now on the horizon

I predict that there will be one this year, along with the launch of the first corporate prosecution for Bribery Act violations.

Barry Vitou is an anti-bribery expert at Pinsent Masons, the law firm behind Out-Law.com. A version of this article appeared on his website, thebriberyact.com.