David Stulb, Global Leader, Fraud Investigation & Dispute Services at Ernst & Young comments on the Bribery Act guidance published on March 30

“The revised guidance that was published on March 30 on adequate procedures under the Bribery Act now sets the right tone and provides clarifications and examples which will be welcomed by the business community. The guidance has been extensively reworked and more detail provided on many of the areas of sensitivity and ambiguity that gave rise to so much critical comment.”

Commenting on the specific recommendations, Stulb said:

“The guidance remains based on six principles, but two of the principles are revised and improved. We are especially pleased to see that 'Proportionate Procedures' has been adopted as the first principle. This was one of Ernst & Young’s main recommendations on the draft guidance - which in our view presented an approach that was far too inflexible - and should go some way to reassuring businesses worried about the burden of compliance."

"Overall, the revised guidance sets out a more realistic approach. In providing examples of acceptable corporate hospitality which might surprise many observers, it should stop the scaremongering that the Act will see an end to normal, reasonable business entertaining. It also recognises that the problem of facilitation payments cannot be solved overnight and requires international effort. Other help is provided on the key definitions of 'carrying on a business' in the UK and who is an 'associated person'.”

“It is the nature of guidance however, that it fails to address everyone's issues and larger businesses in particular may find the guidance less helpful than they may have hoped. There is still wide scope for interpretation of what procedures may be adequate for them."

Stulb concludes:

"Fundamentally though, these revisions clarify rather than dilute the core message of the Act: bribery is a serious risk that needs to be a priority for business and must be actively managed to avoid prosecution".

“It is now even clearer than before that if you have not carried out a thorough assessment of the bribery risks faced by your business you should do so immediately. There are now only three months left for you to be fully compliant with the Act and to have implemented adequate procedures to defend against potentially unlimited fines.”

Ivan Ryutov, CIS Leader, Fraud Investigation & Dispute Services at Ernst & Young comments:
“Foreign companies doing business in the UK should also pay attention to this Act. No explicit definition of “doing business in the UK” is contained in the Act and during the last year there were a lot of speculations in the press whether Russian companies listed in the UK or having other relations with UK partners would qualify this criteria. The Guidance partially enlights this issue, but still the final decision is left to the court. Thus, we would recommend Russian companies to assess their exposure to this Act and potential consequences. It may be a good idea to revisit and improve internal anti-corruption policies especially in the light of recent anti-corruption initiatives proclaimed in Russia.”

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