Will the Justice Ministry try to limit the scope of the Bribery Act?

Businesses will be left even more confused by any attempts to dilute the act, say experts

By Michelle Perry | Published 11:53, 21 March 11

Justice MGuidance on the Bribery Act being drawn up by the Ministry of Justice could be released this week ahead of, or to coincide with, the Budget on 23 March.

Cynics may question whether justice minister Kenneth Clarke’s timing is an attempt to bury the news amid the cacophony of the Budget. But more worrying perhaps could be Clarke’s attempt to “clarify” the act and whether it could prove more confusing for business.

An anti-fraud expert who is close to the drafting of the guidance recently confided in me that he was worried that instead of providing clarity for businesses concerned about act’s reach, the MoJ’s guidance will add to the confusion.

The act makes anyone in a business criminally liable if they bribe to win or retain business anywhere in the world. Those that fail to comply with the law could be hit with big fines or a prison sentence. So it is understandable that business leaders want a guiding hand to allay their fears. However guidance should not seek to reinterpret law.

What the guidance is said to “clarify” is that foreign companies listed on the London stock market but with no other UK presence should not be liable for prosecution under the Bribery Act. The act however states that an offence of failing to prevent bribery applies to all corporate entities carrying on all or part of a business in the UK.

My contact confirmed that we can expect to see an exemption for foreign businesses with a UK listing thanks to the powers of a very influential business lobby. Draft wording, seen by the Guardian last week, suggests the same.

If that is the case the justice minister’s guidance will redefine the scope of the act — passed by parliament under the Labour government last year – which was specifically designed to be wide-ranging to allow courts and prosecutors a wide berth in corporate bribery cases.

Last-minute clarifications to the act concern anti-fraud experts and prosecutors alike that Clarke is trying to reign in the act using departmental guidance to reinterpret primary legislation. However guidance does not have the force of law and only prosecutors and courts can interpret the law.

Companies have wanted more certainty, but it’s unlikely they’ll get it through the MoJ’s guidance.

To be fair most British companies have taken measures to review their policies and practices to ensure they comply with the law. Over time clearer understanding of how far prosecutors will go and how courts will decide with come through case law.

“Until then companies have to take a look at themselves and how they operate and mitigate any risks” of falling foul of the act.

The UK has a poor history of prosecutions in corporate bribery cases and has been criticised by the OECD for its lacklustre approach to dealing with corruption in business. If the guidance attempts to dilute the law it’s unlikely the UK will gain any plaudits for anti-corruption measures.

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