Implementation of Bribery Act delayed

Out-Law News | 21 Jul 2010 | 5:12 pm | 2 min. read

The Government has postponed the implementation of a groundbreaking new anti-bribery law to allow for further consultation on how companies can prepare for its demands. Anti-corruption campaigners have condemned the move.

The Bribery Act was passed by Parliament in April and before this year's election the Ministry of Justice indicated that it would come into force in October.

The Ministry has now said that the Act will not come into force until April 2011, a year after it was passed by Parliament. A consultation will be launched in September into what companies can do to ensure they do not fall foul of the new Act.

The Bribery Act was welcomed by many as a much-needed updating of UK bribery legislation which was seen as complex, antiquated and not suited to modern business.

The new law places a greater burden than existing laws on companies to ensure that nobody employed by them engages in corruption. A company will be responsible for bribery committed by its employees if the company did not have adequate policies in place to prevent it. The new law also gives a definition of bribery itself.

The Ministry of Justice will run a consultation designed to help companies understand what they must do to stay on the right side of the new law.

"In September the Government will launch a short consultation exercise on the guidance about procedures which commercial organisations can put in place to prevent bribery on their behalf," said a Ministry statement. "This will be published early in the New Year to allow businesses an adequate familiarisation period before the Act commences."

"The consultation will be followed by a series of awareness-raising events to ensure everyone is aware of the changes the Bribery Act makes to the current law," it said.

Businesses had expressed concern at what would constitute 'adequate' anti-corruption practices and policies and the last Government changed their proposal to force ministers to publish guidance on what would constitute 'adequate' measures.

While in opposition, the Conservative Party said that it would create an agency to advise businesses on what measures would keep them on the right side of the new law.

When debating the passing of the law earlier this year, Conservative business spokesman Jonathan Djanogly said his party would "explore [the idea] further in government" if it formed the next Government.

Litigation specialist Mark Surguy of Pinsent Masons, the law firm behind OUT-LAW.COM, said that the delay will anger activists but could prove useful to companies.

"The news that the Bribery Act 2010 is not to come into force until April will come as a disappointment to some, a welcome breathing space for others and a false sense of security for many," he said.

"Companies struggling with the bombardment of flyers, web postings and mailings from law firms, accountancy firms and consultants and uncertain what exactly they are supposed to do will have some further time to take stock," said Surguy.

He warned companies to bear in mind that a delay the implementation of the new law does not mean that corruption will go unpunished.

"Those who still think there isn't a bribery law in place may have a big shock. All business activity in the past and today which falls the wrong side of the line can be investigated and prosecuted," he said. "The news headlines of big fines and ongoing investigations all relate to the 'old' law."

Anti-corruption campaigners have warned that the postponement could be the start of a process of weakening and undermining the law.

"It is extremely disappointing that the Government has chosen to delay implementation of the Bribery Act," said Transparency International executive director Chandrashekhar Krishnan.  "Meanwhile, the victims of corporate bribery, usually the poorest people in the poorest countries, will continue to suffer. There is absolutely no reason that effective guidance could not have been published in time for the Act to commence in 2010.

"The danger is that under the guise of consultation attempts may be made by those who want to pursue business as usual to water down the Act," he said.