Bribery Act a threat to businesses, warn fraud experts

The Bribery Act, which received Royal Assent last week, represents one the biggest changes to UK law in this area of business for years.

Under the new rules, firms with UK operations will become criminally liable for corruption in their business, supply chain or sales channels, as will management who "consent or connive" with the offence.

Fran Marwood, director and leader of the fraud and investigations team for PricewaterhouseCoopers in the North, said: "The Bribery Act creates several new offences including that of 'failure to prevent bribery'.

"This means that companies unable to demonstrate that they have implemented "adequate procedures" to prevent corruption by employees, or agents acting on their behalf, could be exposed to unlimited fines.

He added: "It is important to remember that complying with the new rules is much more than just a legal issue. The real challenges are for management – implementing and maintaining the right processes, controls, governance and culture, and encouraging the right values and behaviours.

"Our advice would be for businesses, particularly those bidding for foreign contracts, to review their risk profile and anti-bribery programmes. Unless they already have good anti-bribery policies and procedures which are operating well, considerable time will be required to implement changes which are sufficient to be considered adequate under the new rules. The stakes are potentially high and the time to act is now."

Kevin Hills, Ernst and Young's Yorkshire partner in forensic dispute, criticised the lack of detailed guidance on what the defence of having "adequate procedures" in place means in practice.

The Government is expected to issue guidance to businesses later in the year.

"The guidance issued so far on putting the Bribery Act into practice has been too high level," said Mr Hills. "It is expected that some guidance will be available three months before the corporate offence comes into force, but this is likely to come too late for many businesses to be able to make the changes in time."

He added: "Bribery and corruption risk doesn't only come from within – businesses need to ask what is being done in its name. Organisations need to look carefully at the due diligence they carry out on third parties who act on their behalf."