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Tough new bribery laws set to intensify scrutiny of industry

Words: Catriona Munro

The scourge of bribery and corruption traverses industries and markets like no other. However, against an eclectic backdrop of intensifying international competition and heavy R&D investment, coupled with a patchwork of regulation, the renewables energy sector could be particularly exposed to such threats. PES examines a new law that could potentially have massive ramifications for any European business with the slightest connection to the UK.

To clamp down on such practices, across all sectors, the United Kingdom is soon to follow the lead of other countries by introducing tough new legislation, which will apply both at home and abroad. The long-awaited Bribery Act 2010 will force organisations to address bribery and corruption, or face the prospect of punishing corporate fines and life-altering criminal sanctions for directors and staff. However, the recent decision to delay the introduction of the Act should not be used as an excuse to slow the pace to a halt, but an opportunity to review policies and procedures, to ensure they make the grade when the new legislation comes into force.

The UK has long been under fire for its failure to tackle corrupt business practices at an international level. This is partly because the legislative basis for much of its anti-bribery law is out-of-date, relying on the courts for case law to fill gaps. The resulting patchwork is riddled with weaknesses, most notably the challenge of holding companies to account for suspected bad practice abroad.

The Bribery Act 2010 sought to bring about a root and branch overhaul of these ageing laws. Significantly, the Act is set to impact businesses on an international scale, due to its wide extra-territorial reach. It will reach beyond businesses based or incorporated within the UK, to any commercial organisation with any business activities in the UK. The level of business activities in the UK could be minor, perhaps limited to activities via the internet or other telecommunications, or occasional visits to the UK, which could nevertheless trigger the Act.

The Act also widens the law in several other ways, extending the definition of bribery, and introducing new offences, which can be committed by directors and senior managers, in addition to a corporate offence of failing to prevent bribery. The punishment available to prosecutors and courts are toughened up too. Directors could be disqualified for 15 years and prison sentences of up to 10 years can be meted out, in addition to unlimited fines. Companies are liable for unlimited fines and can also be excluded from future public sector tenders. Significantly, in contrast to US legislation designed to tackle bribery of foreign public officials, the new UK Act also prohibits bribery of private persons.


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