Clifford Chance

The View from Clifford Chance - Bribery Act

Welcome to the latest edition of The View, where Clifford Chance partners share their thoughts on hot topics in the media.

With official guidance for the Bribery Act expected any day now, Luke Tolaini shares his thoughts on why this legislation could remain controversial below.

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The Bribery Act

Delayed and forced into the Coalition's Growth Review due to business concerns over competitiveness, the official Bribery Act guidance is expected imminently. Will this put the business community at ease? Probably not.

The UK Government has responded to growing concerns expressed by British business over the scope of the forthcoming Bribery Act by including certain aspects of the legislation in its overall Growth Review.

The primary objections to the Act expressed by business are that it catches a very wide category of conduct and that it contains a strict regime for attributing the liability of individuals involved in corruption on to the company, even in far flung parts of the globe where it is almost impossible to police behaviour.

Within those broad categories there are particular concerns about the Act's treatment of facilitation payments – minor low value payments to government officials in countries where things don't get done without them – corporate hospitality and offsets – such as contributions companies are expected to make to support local infrastructure surrounding a project when tendering for a contract.

Whereas the sweeping US Foreign Corrupt Practices Act (FCPA) contains a 'carve-out' for such payments, they are largely criminalised by the UK legislation. The reaction of British businesses to this has been that they are going to be at a considerable disadvantage when bidding for contracts in countries such as, India and Nigeria, where such payments are the norm.

According to Clifford Chance partner, Luke Tolaini, whether or not companies find themselves in the dock over such conduct will depend to a large extent on the discretion of UK prosecutors. But this only adds to the confusion and uncertainty surrounding the Act.

The Serious Fraud Office is due shortly to publish guidance to prosecutors in making decisions on whether or not to prosecute a particular course of conduct. But Mr Tolaini is not convinced that this will shine any greater light on the matter. "Too much of this comes down to the discretion of individual prosecutors who tend to have 20-20 hindsight. Businesses are being asked to guess what they should do and that's not good enough," he says.

Having been delayed to allow three months after official guidance is issued, the Act looks set to come into force around May. The big question now for the Government's Growth Review is how does the UK balance the need for a robust anti-bribery regime against the wider interests of British business?