Bribery and Corruption – what your business needs to know – UK Law – Eversheds – UK Legal Newswire –

Businesses are unprepared for tough new bribery laws
One in five companies have no policy to address corrupt practices
One in four board directors unaware that they could face a 10 year prison sentence
New laws which could put workers behind bars and hit companies with unlimited fines are passing into law unnoticed by UK businesses. According to research from international law firm Eversheds, many businesses are in the dark over the new Bribery Bill, due to receive Royal Assent shortly, with 60% of businesses unaware that failing to prevent bribery will be a criminal offence. A failure by a business to deal with bribery issues could lead not only to the individual directors facing prison but also the business facing a substantial fine.

The laws, which are expected to come into force later this year, will mean that all businesses need to have ‘adequate procedures’ in place to prevent bribery and corruption occurring. These will include an anti-bribery policy, training of staff, closer scrutiny of purchasing decisions, clear rules on corporate entertainment and gifts as well as a hard line taken on those found to be ‘greasing palms’ to win business.

Eversheds’ Corruption Clampdown report reveals a lack of knowledge and understanding about the new laws, even at the top of UK businesses. The report, which canvassed the opinion of almost 700 executives, found that one in five (20%) organisations don’t have robust systems to prevent bribery from taking place.

There is also confusion about what constitutes bribery. While three quarters (73%) of those surveyed understand more explicit forms of bribery – accepting, giving or receiving an illicit payment – there was a lack of awareness of the more discreet forms that will be covered by the bill, such as offering a commercial advantage or offering and receiving lavish gifts. Almost two thirds of respondents (60%) were unaware of the new corporate criminal offence of failing to prevent bribery committed by employees or agents acting on behalf of the company.

Neill Blundell, Head of Fraud Group at Eversheds, said:

“Our survey found that there is a real lack of awareness, understanding and training in relation to the Bribery Bill and that many businesses aren’t set up to minimise their exposure to corrupt business practices.

“The new laws bring significant responsibility for directors who will need to carefully monitor all procurement and sales activity within the business, including deals done by agents and intermediaries. If for example, an agent used to secure business commits bribery to win a contract, the business could be held criminally responsible for failing to prevent the act of bribery by the agent. If any directors or officers of the business have become aware that the agent has acted in such a way and failed to act, they too could face prosecution and imprisonment.

“This worryingly relaxed attitude towards the Bribery Bill could see businesses fall foul of the new law which could lead not only to directors going to prison but the company facing a severe financial penalty.”

The survey also highlighted some opposition to the new regulations in light of the current economic climate. Almost a third (29%) believe that the new legislation goes too far and presents unnecessary challenges in a difficult economic climate. Opposition to the bill increases to 39% among senior managers and further still among SMEs (54%).

Neill Blundell concludes:

“While companies may have been focussed on pulling their business through the economic slump, they simply can’t afford to overlook this new legislation. These are serious laws with tough penalties and businesses need to take steps to minimise their risk by showing that they have actively taken steps to prevent bribery. This includes delivering training on ethical business practice from Board level down, and ensuring that there is a policy in place which is communicated throughout the organisation.

“Businesses should also monitor the activity of agents and intermediaries acting on behalf of the organisation to ensure that bribery and corruption is not taking place.

“Fraud affects all sectors and businesses of all sizes. While companies will never be able to stop certain individuals from engaging in dishonest practices, they have to demonstrate that they have taking steps to stamp out bribery and corruption.”

Key Findings

The research was conducted in January 2010 among a cross section of businesses, from SMEs through to large organisation across all sectors. From junior managers up to board directors, 694 executives took part in the research.


· 60% of respondents were unaware that failing to prevent bribery will be a new corporate offence

· 91% of respondents don’t know that the maximum jail sentence is 10 years


· 1 in 3 respondents (34.4%) don’t know that company directors can be found liable of bribery and face prosecution

· Worryingly 1 in 4 directors aren’t aware that they could face prosecution


· One in five (20%) admit that their organisation didn’t have adequate systems in place to prevent bribery taking place


· Almost a third (29%) believe that the new legislation goes too far and presents unnecessary challenges in a difficult economic climate

· A quarter (26%) say it makes the UK a more attractive to do business, while 24% say it makes it less attractive

· A quarter (25%) of those surveyed believe that the UK needs a new financial crime regulator to enforce the regulations. This decreases to just 8% among directors and board members.

Businesses who wish to find out more about the Bribery Bill can visit to request a copy of the Corruption Clampdown report and to view Eversheds’ video, Bribery and Corruption: What your business needs to know.

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