A couple of weeks back the Guardian newspaper reported on a leaked draft of the Guidance, the final version of which will be published by the UK’s Ministry of Justice prior to the Bribery Act coming into force later this year. The report focused on the proposal that overseas companies that list on the London Stock Exchange to gain access to London’s capital markets, but which have no actual presence in the UK, should be exempt from the terms of the Bribery Act.
Following my colleague, Adam Greaves, having commented on this in his post on 16 March 2011, we have learned from sources involved in the drafting of the Guidance that such an exemption for overseas companies is proposed by government ministers.
However, according to a follow-up article that appeared in the Guardian on 25 March 2011, it appears that Richard Alderman, the head of the UK’s Serious Fraud Office (the “SFO”), has spoken out against there being any exemption for overseas companies.
Image © Crown Copyright 2011
At a recent anti-corruption conference in Russia, Richard Alderman emphasized the need for the Act to have a “wide jurisdiction”, allowing the SFO to pursue overseas companies listed in the UK, even if they have no actual presence in the UK, whenever it is in the public interest:
“UK companies want to know what the SFO will do in order to support them in doing business in challenging environments throughout the world when their business rivals seek to obtain a competitive advantage over them by using corruption. My concern is with bribes that put ethical UK companies at a disadvantage, with the consequential effect on their employees. That seems to me to be a very clear example of where the UK public interest is engaged. I need to be able to support companies in those circumstances where they are at a disadvantage.”
Richard Alderman went on to give the following example to his Russian audience:
“It could be for example, that a foreign company pays a bribe to obtain a contract that would otherwise have gone to an ethical UK company. The ethical UK company in those circumstances has to close one of its operating subsidiaries with the loss of many jobs. There is an immediate impact on the employees of the subsidiary, their families and surrounding communities. There is a very clear nexus in my view to the UK in those circumstances and I believe that it is important and in the public interest that I am able to take action.”
What these comments make clear is that companies, whether based in the UK or overseas, need to be mindful of the fact that the Guidance will not actually form part of the legislation. Therefore, while compliance with the Guidance will take companies a long way towards compliance with the Act, it will not be a complete defence in circumstances where the SFO has taken the decision to prosecute. Consequently, whenever it is eventually published, the Guidance will need to be treated with caution by companies seeking to comply with the Bribery Act.