CHAPTER 10: bribery act 2010|
10.1. The Bribery Act 2010 came into force in
July 2011. Its purpose was to modernise domestic and foreign offences
of bribery. Its enactment led to a flurry of concern that SMEs
would be particularly harshly affected. Mr Simon of UKTI agreed
that the Act had "provoked a bit of anxiety" and said
that "it is possible that [the UK] have lost some business".
10.2. It was not surprising, therefore, that
whilst several witnesses recognised it as having enhanced the
reputation of the UK in terms of business ethical standards, some
expressed concern that the Act had given rise to uncertainty and
put the UK at a trading disadvantage. Deltex Medical Ltd, for
"The Bribery Act is a concern because it creates
an imbalance with other markets. We support appropriate measures
to uphold industry best practice and ethical business practices.
However, the terms of the Bribery Act itself potentially restrict
trading opportunitiesfor example in countries such as China
and Brazil that do not conform to the same code of practice as
the UK. In our experience, we have had to pay to review potential
overseas distributors in China. Many Directors of SMEs are rightly
concerned about being able to expand export markets whilst conforming
to the Bribery Act."
10.3. He went on:
"BRIC countries especially raise challenging
questions around the Bribery Act. My fellow directors and I have
concerns over how we operate correctly under the Bribery Act within
those countries. We have taken legal advice. We have made changes
to our contracts. All of those areas have ways of trading that
are different from those that we have in the UK, and different
standards. It is difficult for any company to go in and follow
the recommendations." 
10.4. Tony Shepherd of Alderley plc expressed
his views robustly:
"The existing Act is virtually impossible to
operate as far as a UK company is concerned. You cannot really
take someone out to dinner without committing a crime. I am very
strongly in favour of trying to eliminate bribery, but to have
a situation where we are subject to a law that is much more severe
than anywhere else in the world is not good."
10.5. ADS also recognised the value of the Act
but asked for "clearer guidance ... on its practical application
and its implications, particularly the responsibility on SMEs
for local 'agents'". They also thought it "essential
that the UK pursues a global level playing field in bribery rules
so UK companies are not disadvantaged".
LMK Thermosafe Ltd similarly understood the purpose of the Act
but said that adhering to the Act restricted their ability to
sell successfully and, as a result of Act, they preferred to "work
in markets where honesty is appreciated".
Mr Ehmann of the IoD described the Bribery Act 2012 as a "counterproductive"
measure that has "held us back". It had had, he said,
"a significant impact" on his members, especially for
those trading with BRIC countries and developing economies.
Current Government action
10.6. The Government explained to us what action
they had taken to help SMEs to understand the implications of
the Bribery Act 2010. The Ministry of Justice has published guidance
on the Act and has run a programme of awareness-raising, prioritising
UK industrial sectors most exposed to corruption risks. There
is an online Business Anti-Corruption Portal which is specially
targeted at SMEs and provides a comprehensive and practical business
tool to help them avoid and fight corruption, with specific advice
on 62 countries. Commercial Awareness training for FCO staff aims
to equip them with the knowledge and skills to be able to provide
suitable support to businesses, including advice on this issue.
Mr Simon referred also to an initiative being considered by UKTI,
"a potential signposting opportunity to people who can give
specific guidance to companies as to how directors can take appropriate
levels of care to ensure they do not infringe the Bribery Act".
He suggested that the "most dangerous thing" was not
"the legislation per se" but "a lack of
10.7. As with intellectual property issues,
we exhort the Government to make efforts to promote the international
harmonisation of standards, and also to raise awareness amongst
SMEs about the application of the Bribery Act 2010 and explain
exactly how it will be applied in practice.
10.8. Mr Simon suggested that "there is
a desire that the Bribery Act be tested by the Crown Prosecution
Service, because then the community as a whole will have a better
sense of where it stands".
We do not agree. It is not satisfactory to wait for elaborate
court cases to define the actual workings of the Bribery Act 2010
in case law.
10.9. Whilst we acknowledge the importance
of the example of high ethical standards being set by the UK,
application of the Bribery Act 2010 has been met with confusion
and uncertainty. We recommend, therefore, that, at the earliest
opportunity, the Act should be the subject of post-legislative
scrutiny by a Parliamentary select committee.
397 Q 53. Back
Q 133. Back
Q 278. Back
LMK Thermosafe Ltd. Back
Q 93. Back
The Government. Back
Q 53. Back
Q 54. Back