UK mustn't let core bribery law be undermined amid Brexit pressures
26 February 2018. By Martin Coyle.
A review of the UK’s bribery laws confirmed last week appears a sensible move, but lawmakers must guard against weakening the law — especially amid a push by business to explore new markets after Brexit. This could undo much of the positive change in corporate behavior that the legislation has driven.
On Friday, the UK’s Ministry of Justice told MLex it was set to run the rule over the country’s corporate bribery law, passed in 2011, to gauge how well it is working.
The so-called post-implementation review, a standard feature for recently passed laws, will see officials examine how successful the Bribery Act has been so far. It's due to be completed within two years.
Government officials have played down the significance of the review, pointing out that all new legislation undergoes the same scrutiny. But they have refused to rule out changes to the law.
This could ring alarm bells for those committed to seeing the UK remain, alongside the US, at the forefront of the fight against foreign bribery. Foremost among the worries are that the law will end up being weakened as a sop to businesses looking for access to new markets after Brexit.
The move has been a long time coming. In the UK, post-implementation reviews are generally carried out between three and five years after a law comes into force, meaning by mid-2016 in the case of the Bribery Act.
This timeline coincided with the June 2016 Brexit referendum, and it’s clear that the government has been preoccupied with the fallout from the vote since then.
While Prime Minister Theresa May’s hands have understandably been tied by Brexit negotiations, her tenure has been marked by several worrying episodes for watchers of the country’s efforts to fight corruption.
There was a widely criticized and failed attempt to merge the UK’s chief enforcer of the act, the Serious Fraud Office, with the larger National Crime Agency. There was an unexplained year-long delay before a national anti-corruption plan was published in December. And there was a similarly opaque six-month wait before the government filled the empty post of anticorruption champion, also in December.
While the fight against corruption appeared to be a priority under previous Prime Minister David Cameron, much of this impetus has fallen away under May.
Observers will now be watching closely to see whether the scrutiny leads to a weakening of the Bribery Act, particularly as UK businesses will be looking to tap into markets in distant countries post-Brexit. New markets, while potentially lucrative, bring new risks with the potential for less scrupulous practices and lax controls in some jurisdictions.
The SFO warned of the danger last year, when its head David Green said: “After Brexit there will be a need for inward investment into the UK. This requires a level playing field. Any slippage . . . from the level of enforcement we have at the moment would be counter-productive.”
Campaign group Transparency International has also warned that the rush to export goods to emerging markets could lead to renewed pressure to weaken the law. World-class anticorruption provisions must be built into any new trade agreements, it said last year.
In the runup to the Bribery Act’s implementation, there was much talk about how it would stymie UK businesses from making a profit abroad. Much of the talk was also about how companies would be stifled from entertaining clients.
Companies feared, for example, that they wouldn’t be able to host customers at the Wimbledon tennis tournament, nor offer tickets to a Premier League soccer match, nor even offer mundane business lunches.
These fears have proved groundless. Companies are forced to take the act seriously, which doesn’t kill off corporate jollies, but does examine their attitudes to governance.
Notably, those without proper controls face prosecution under Section 7 of the legislation if bribery takes place on their watch. In 2016, construction consultancy Sweett Group became the first company to fall foul of this provision, after pleading guilty of failing to prevent bribery.
The SFO’s mammoth deferred prosecution agreement of 497 million pounds ($694 million at today's rates) with Rolls-Royce over bribery allegations was also partly enforced with the Bribery Act.
The legislation, on the face of it, appears to be working. Companies have been forced to clean up their act or face the consequences. The government must be mindful to hold at bay any pressures from big business to excessively tinker with the law.
This would likely provoke strong criticism from groups such as the Organization for Economic Cooperation and Development’s influential working group on bribery. It could also be counterproductive, especially as the Bribery Act won the UK widespread praise as one of the world’s toughest corruption laws when it was brought in, just seven years ago.