Archive for August 9th, 2010

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The new UK Bribery Law extends to Ukraine

August 9, 2010

Well dear readers, as the UK Embassy Kyiv is keen to draw you attention to the new UK Bribery Law…….please see below:

The Bribery Act 2010 – new UK legislation will become law in April 2011

On 20 July, the UK Government announced that new legislation to combat bribery will enter into force in the UK in April 2011.  The Bribery Act 2010 (the Act), which received Royal Assent on 8 April 2010, will reform the criminal law of bribery to provide for a modern, comprehensive scheme of bribery offences to cover bribery both in the United Kingdom and abroad.  The Act will replace the fragmented and complex offences contained in common law under the Prevention of Corruption Acts 1889-1916.  The Act will also reinforce the UK’s reputation as one of the least corrupt countries in the world.  

The following guidance, in the form of Q & As, is intended to help British companies and non-British companies in Ukraine understand the implications of the new legislation and how it might impact on their business. It also provides links to further information and guidance on dealing with bribery and corruption.  

1.  Who does the law affect and what implications does this have for British and non-British companies in Ukraine?

The Act affects all companies incorporated in the United Kingdom.  All foreign companies that do business in the United Kingdom (wherever they are incorporated) are also affected by the Act. This is in part due to the new provisions in the Act requiring commercial organisations to have adequate procedures in place to prevent bribery.   British and non-British companies (undertaking commercial business in the United Kingdom) operating in Ukraine will have to be able to demonstrate that they have adequate procedures in place to prevent bribery which meet the requirements of the Act.  Under the provisions of the Act, the Secretary of State is required to publish guidance about the type of procedures companies can put in place to prevent bribery. In September, the Government will launch a short consultation round on the guidance procedures which will be published early next year to allow businesses adequate preparation time before the Act enters into force.

2.  Does the Act place any obligations on the British Embassy in Ukraine?

No. The Act does not impose any specific legal obligations on the British Embassy in Ukraine.  However, the Embassy can provide advice and guidance to UK companies and answer factual queries.  We are, nevertheless, keen to raise awareness of the new Act.  In addition, all members of staff working at the Embassy who become aware of, or receive information relating to, acts of bribery committed by UK nationals, UK companies, their subsidiaries, representatives or agents, or other incorporated bodies and required to report the details to the United Kingdom Serious Fraud Office.  

3.  Where can companies find additional information and support materials with details of the Act?

There is a wealth of guidance available to UK and international companies on bribery law and managing the risks of overseas corruption, including international best practice and practical tools.  In the UK, the Department for Business, Innovation and Skills co-ordinates advice for UK businesses. Information is available on their website.  Another key resource is the UK-sponsored Business Anti-Corruption Portal which contains a variety of instruments and information which can be used alone or in combination with other information sources, including familiar and well-known procedures and methods adapted to small and medium sized enterprises. There are also newer tools available, for example there is a practical new anti-corruption training tool for companies, known as RESIST, for companies facing bribe solicitation or extortion – further details can be found at the website of Transparency International. 

4.  What advice are you giving UK companies regarding this new Act? Is it something they need to take action on or should they just be aware of the Act?

We are able to provide UK companies with advice on the main provisions of the Act and where and how they can find out more about its implications.  However, we cannot give companies legal advice or assistance, or advice on their internal policies and procedures.  

5.  Are there any corresponding EU initiatives or laws in this area?

The European Union has a range of initiatives within a general framework aimed at fighting corruption including conventions against corruption involving officials and combating corruption in the private sector.  EU member states are bound by these conventions and their own national anti-corruption legislation.  Other international organisations, such as the UN and OECD, have a variety of international conventions and instruments in place regarding the fight against corruption.  

6.  Is there a risk that, with the introduction of such a law, UK and international companies will become more insular choosing only to award contracts to themselves rather than smaller Ukrainian suppliers?

According to the OECD, corruption threatens good governance, sustainable development, democratic process and fair business practices.  The introduction of new legislation in the UK which consolidates and modernises previous legislation, and which meets international standards, will enhance the openness and transparency of UK companies and international companies operating in the UK.  It is not, however, for the Embassy to speculate on how companies might react to the introduction of the legislation in terms of their external business practices.

(Above care of UK Embassy Kyiv)

Now, moving on the the technicalities, the Act will:

  • provide a more effective legal framework to combat bribery in the public or private sectors
  • replace the fragmented and complex offences at common law and in the Prevention of Corruption Acts 1889-1916
  • create two general offences covering the offering, promising or giving of an advantage, and requesting, agreeing to receive or accepting of an advantage
  • create a discrete offence of bribery of a foreign public official
  • create a new offence of failure by a commercial organisation to prevent a bribe being paid for or on its behalf (it will be a defence if the organisation has adequate procedures in place to prevent bribery)
  • require the Secretary of State to publish guidance about procedures that relevant commercial organisations can put in place to prevent bribery on their behalf
  • help tackle the threat that bribery poses to economic progress and development around the world.

Here is the Act in full

http://www.opsi.gov.uk/acts/acts2010/ukpga_20100023_en_1

Where will BAE Systems, BP, GSK and all the other big companies who bribe lobby to reach their desired ends go now?  Will MP’s be forced to turn down directorships when leaving politics that their ministry’s dealt with?

One has to wonder what will be constituted as a “bribe”……cash in hand (obviously), promised directorships, property, shares (seemingly), holidays, “corporate entertainment” (possibly)?

Is this the time for intermediary private entrepreneurs (thus not incorporated) to enter the undesirable corporate underbelly and act with full deniability of those corporate entities engaging them……after all, as BP said when lobbying for the UK Government relating to Libyan oil exploration held up by issues of the Lockerbie bomber…..there is always wiggle room in the law……and we all know how that turned out!!

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