As reported in the Financial Times on 29th May, and before any corporate prosecutions have even taken place, the Government is to consider whether the ban on facilitation payments in the Bribery Act should be relaxed for small and medium sized companies (SMEs). There hasn’t been any official announcement yet, but it is known that the current coalition government wants to cut red tape which it perceives is inhibiting growth of British business. To that end, the Bribery Act 2010 arrived at the wrong part of the economic cycle, just when British business did not need any further problems preventing them from competing in the global market. The Act came into force less than two years ago, on 1st July 2011.

The suggestion in the FT report is that the prohibition on facilitation payments is simply not understood by SMEs and that they were unsure as to what adequate procedures they would need to demonstrate to ensure that they would not be prosecuted. There is, however, plenty of government guidance both from the Ministry of Justice itself, published in March 2011, and there was also guidance previously published by the Serious Fraud Office, which is the government body charged with investigating and prosecuting large scale corruption.

The inference which some anticorruption campaigners will inevitably make, including the OECD, which had been pushing the UK for years to put in place modern anticorruption legislation, is that SMEs and other larger businesses use facilitation payments all the time to do business abroad, and that they are not willing to amend their ways in order to stand up against demands for improper payments.

On any review of this new statute, it will be difficult to draw a distinction between what is a low level payment to speed up the delivery of a service which is otherwise legitimate, and on the other hand what level and frequency amounts to widescale organised crime due to its repeated nature. The factors which were considered only 3 years ago when the Bill was going through parliament should still be fresh in the minds of legislators and policy makers.  

Will current domestic political and business expediency overrule the government’s apparently contradictory desire to establish a level playing field for winning new business abroad?

The SFO is apparently not prepared to comment on the FT story – which is not surprising in view of its reiteration of its own stance on facilitation payments at the end of last year in an open letter from the new Director, David Green QC. My colleague Vivian Robinson QC blogged on the SFO’s tough stance on 23rd January 2013 here.

Watch this space for developments in this story. There is bound to be a lot of controversy if the Government does indeed decide to amend the Bribery Act.