By Eoin O’Shea
It seems strange to speculate on the effects of legislation which only entered force on July 1st, but such has been the impact of the UK’s Bribery Act 2010 that strong effects can already be seen.
Considering the un-surprising fact that there have been no prosecutions so far, and the fact that it is a quite short piece of national legislation, the Act is a media phenomenon. A Google search for “The Bribery Act” will generate about 7.3 million results. By comparison, a search for “FCPA” or synonyms generates about 1.7 million results.
Companies in the world’s main financial centres have been inundated with briefings, opinions, seminars and other material designed to inform them of what the Bribery Act is about and the compliance procedures it may require. So, whatever happens, the Act has raised awareness of ABC issues in a very significant way.
This is being felt in boardrooms a long way from London. The Act’s reach (which extends to companies with any sort of business presence in the UK) means that lawyers are being asked for advice from around the world. It is sometimes not very easy to give robust advice to clients about long-established business practices in their home markets. But we will have to get used to it, because ABC compliance generally will soon pass the tipping point and become standard international practice.
The British Government’s recent suggestion that companies with only a listing in London may not be subject to the Bribery Act, even if it is right, seems irrelevant because, in the real world, such companies usually do have other activities in the UK. The test, remember, is “carrying on business, or part of a business” in the UK. The net result is that the Bribery Act is causing an extension of UK compliance standards to places and companies which, five years ago, one would not have expected to be very interested in them.
Of course, this may not continue. Geo-politics and macro-economics create new facts and incentives without much reference to lawyers or compliance officers. In 30 years time there may be a different attitude to corruption because of the influence of countries lacking a strong rule of law. However this outcome is far from certain. There are straws in the wind suggesting that anti-corruption initiatives are seen as essential no matter what one’s nationality. For example, Russia has recently joined the OECD Convention on Bribery. China has also recently criminalised corruption of foreign public officials. India is facing up to very serious allegations of official bribery in an unprecedented way. Such states clearly recognise the damage which corruption does to societies and to trade.
The Bribery Act follows on from the FCPA, the OECD Convention and other instruments in shaping a much larger debate about standards of ethics and accountability around the world. Although the anti-corruption movement has a long way to go, there is no doubt that it has started moving, and is gathering momentum.
Eoin O’Shea is a partner and Head of the Anti-Corruption Group at Lawrence Graham LLP. His book The Bribery Act 2010: A Practical Guide was published on 29 June 2011 by Jordan Publishing. He can be contacted here.