THE INTRODUCTION of legislation to stop British companies bribing foreign government officials to win lucrative contracts has been delayed following a storm of criticism from business leaders who warned that it could harm British interests.
The Bribery Act, passed by the departing Labour government as one of its last actions in office, threatens companies with unlimited fines if they are found guilty, with executives facing sentences of up to ten years.
The legislation creates four offences: the paying and, or the receipt of bribes, the bribing of a foreign government official and, most controversially, failing to prevent bribes being paid by a local contractor.
Last July, the Conservative/Lib Dem coalition decided to delay the Act’s introduction until April this year, but justice secretary Ken Clarke has now decided that months of further talks with businesses are needed.
The conduct of British firms struggling to win contracts internationally was highlighted by former prime minister Tony Blair’s decision in 2006 to block a Serious Fraud Office investigation into payments made by BAE Systems to win a Saudi Arabian defence deal.
In December, BAE paid a £500,000 fine in a British court for failing to keep proper records, but last February it paid $400m to settle an investigation taken by United States prosecutors into the same deal.
The head of the anti-graft lobbying group Transparency International, Chandrashekhar Krishnan, said Mr Clarke’s decision was “disastrous news”.
“The [bribery] Act is a robust piece of legislation that will help to level the playing field for the vast majority of UK companies that want to conduct their business in an ethical manner. This delay creates unnecessary uncertainty for these companies and exposes the Government to international criticism that it is not serious about combating corruption,” he said.
Refusing to put a deadline on when the legislation might come into force, Mr Clarke said: “We are working on to make it practical and comprehensive for business.”
The new director general of the Confederation of British Industry, Ian Cridland, said the legislation was “not fit for purpose”, lacked clarity and left companies open to prosecution for actions by local agents that they could not control.
