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Send  Share  RSS  Twitter  18 Oct 2011

TRADE: Bribery; Beware The UK Traps

 



Recent Western Cape Business News

AS of July the UK Bribery Act introduced the toughest ‘anti-corruption laws’ in the world to South Africa. This Act affects any South African company with UK ties and it is vital for companies to be aware of the severe legislation because should bribery conduct be committed, even if it has no connection with the business conducted in the UK, the business in question will be prosecuted by UK anti-fraud authorities.

Willem du Preez, director at BDO SA says that the UK Bribery Act 2010 has introduced four new offences namely:

Offering or promising a financial reward, or other advantage, in order to encourage inadequate performance or activity

Asking for, agreeing to receive, or accepting a financial reward, or other advantage, with the intent of performing a function or activity inadequately

Offering, promising or giving a financial reward, or other advantage, to a foreign public official with the intent of either influencing the person, retaining or obtaining business to gain an advantage in the business environment

Failure by business to prevent an associated person from bribing another person with the intent to obtain or retain business for the business or gain an advantage in the business environment.

Du Preez says the last item is a new corporate offence and puts responsibility back in the hands of business as strict liability is imposed for failure to prevent bribery.

Under this offence companies will be liable if anyone acting under its authority commits an offence of bribery. People who could put business at risk include employees, consultants, agents, subsidiaries and joint venture partners.

All is not lost for companies however as directors could avoid heavy fines and imprisonment if they are able to demonstrate that the company has put ‘adequate procedures’ in place to prevent offences of bribery.

The penalties for non compliance are severe: unlimited fines for companies, up to ten years in prison for individuals involved and debarment from tendering for public contracts within the European Union. There will also be the danger of adverse publicity where a company is investigated and prosecuted. The question however remains if the UK enforcement agencies will have the appetite [and budget] to take on what are lengthy and costly investigations and court prosecution. If the history of the US enforcement agencies’ endeavour and success in prosecuting under the FCPA is anything to go by, it may take a decade or so for us to find out,” Du Preez says.


 
 
 
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