With the change in UK government in May this year,  many were wondering how the new coalition would deal with the UK Bribery Act which was passed into law in April.  Bribery and corruption are very costly for business – adding an estimated 10% or more to the costs of doing business in many parts of the world.  It also has a huge social cost, and in development terms - corruption kills.

As Richard Dowden, Director of the Royal African Society argues “The more public funds — some of them our taxes — that are stolen and go into the offshore bank accounts of corrupt officials and politicians, the less goes on health, education and development”.   

With extraterritorial reach it has a broader impact for companies and individuals, and with no exemption for facilitation payments, the Act  goes beyond the Foreign Corrupt Practice Act, and could be seen as the toughest enforcement regime in any jurisdiction.  Companies will also be liable for the corrupt activities of associated third parties as well as their own staff, it applies to both UK and foreign companies with operations in the UK,  and offenses can take place in a third country even if unrelated to UK operations.

So the Act has repercussions for business globally. No wonder it was lauded widely as a great step forward in the fight against corruption and welcomed by key bodies such as UN Global Compact, OECD and the UN Office on Drugs and Crime.

Back in June when UK Justice Minister Kenneth Clarke was appointed by the PM as International Anti-Corruption Champion, the anti-corruption community eagerly awaited next steps on the Act which he is charged to implement.  ‘The champion role sends out a clear message that the UK coalition government will not tolerate bribery or corruption and that we will work together to stamp out these practices across the board,’ Clarke rightly stated.

However,  Mr Clarke hasn’t exactly come sweeping in with a cape, superman style, but instead is cogitating whilst the legal machinery slowly grinds forward and there is a fear that the message is being diluted, not least from world renowned  anti-corruption champions Transparency International.  Last week, the Ministry of Justice announced that the Act will not come into force until April 2011, following consultation on “adequate procedures”.

Considering that under current timing this leaves only three months between the guidance being published and the act being enforced, where does your company stand?  CIMA in association with Global Witness have produced a guidance document and a related survey to understand how prepared management accountants are – so please contribute and let us have your views.  What else could the profession be doing to truly champion anti-corruption and upholding the code of practice?  And what are the key challenges?