Companies have been warned there will be no ‘grace period’ after the Bribery Act comes into force from today.
Strict new rules will reform the antiquated UK laws and clamp down on the bribery of public officials and corporate executives.
Individuals found to be in breach of the new rules could face up to 10 years in prison, with their company risking an unlimited fine if it fails to prevent bribery.
Legal experts have warned there is just one statutory defence against firms being prosecuted - to show the company has ‘adequate procedures’ to prevent bribery - and that rules will be enforced immediately.
Charles Mayo, an expert in corporate governance at City firm Simmons & Simmons, has advised clients on the potential impact of the Act and believes many companies will not be ready.
He said: ‘Putting in place adequate procedures can have a long lead-in time.
‘Things like third party due diligence procedures, training and putting anti-corruption provisions in contracts can take much time and resource.’
Recent research by accountancy firm Ernst & Young found one in seven employees at large UK companies was still prepared to offer cash payments to secure business – a clear violation of new bribery laws – and little more than half were aware of their firm’s anti-bribery policy.
John Smart, head of the firm’s fraud investigation and disputes services team, added: ‘Companies need to understand the risks they run if they do not make an active effort to demonstrate their willingness to abide by the Act.’
The new legislation is extraterritorial and covers bribery by UK citizens around the world, not just by company employees but by a range of third parties including subsidiaries, joint ventures, distributors and suppliers who perform services for the company.