Opinion: Bribery law rethink is a distraction

Reviewing the Bribery Act before it has been tested in the courts is likely to be a waste of effort

Seegar Karolos

People are talking about the Bribery Act again. Not that the spotlight ever left it. Since it came into force it has been a focus of private practitioners, in-house counsel, compliance officers and board members alike. But last month, the Financial Times wrote that the Government is looking to water it down in the name of cutting the regulatory burden on SMEs.

No one would argue against doing away with needless red tape, but whether the act should be caught up in this cause is far from certain.

The cross-hairs of the review are settling on facilitation payments. These are small payments to foreign officials to get them to do what they are supposed to do – let your goods into port, issue you a visa and so on. But removing these payments from the scope of the act seems unlikely.

For one thing, this would put the UK at odds with the Organisation for Economic Co-operation and Development (OECD), whose Convention on Combating Bribery the UK is bound to observe. The act helped smooth the relationship between the OECD and the UK following some differences in the early 2000s. Taking out facilitation payments would be a backwards step.

A lenient treatment of facilitation payments would also go against international opinion. Canada is taking steps to outlaw them. Australia may do the same. Even in the US the authorities discourage them.

In any case, the concerns may be overstated. It is not clear how many UK companies rely on them, especially since they have always been illegal under English law.

One area where removing the prohibition might have an impact is on US multinationals operating in the UK. If they rely on the Foreign Corrupt Practices Act’s facilitation exception, changing English law could remove an element of uncertainty from their activities. In such light, allowing facilitation payments hardly seems a focused way to cut red tape.

Facilitation payments aside, the need to review the act is not fully made out. Talk of a review appears to stem in part from hearings by the House of Lords Committee on SMEs. These were about barriers to UK exports and some witnesses suggested the act was holding exports back, a charge as yet more speculative than proven. The committee suggested the act undergo House of Commons committee scrutiny. But any review may not have much to go on – there has not been a single corporate Bribery Act prosecution, which means, among other things, that the famous ‘adequate procedures’ defence has not been tested.

It is also worth noting that a lot of the unhappiness expressed in the House of Lords related to hospitality spending, which is separate from facilitation. Indeed, the Ministry of Justice is clear that corporate hospitality is acceptable.

While it seems a review could be on the cards, questions remain as to the likelihood of major change.

Debevoise international counsel Matthew Getz assisted with this article