At 00.01 this morning, 1 July 2011, illicitly received or gifted golden coaches may well turn into pumpkins, or certainly costly liabilities, as the UK Bribery Act came into force, highlighting the continued global fight against corruption.

The legislation makes it illegal to offer or receive bribes, but most importantly includes a new offence of failing to prevent bribery, for which the company is liable if an employee, or even third party pays or receives a bribe. Policies based on "box-ticking" will not apply as companies will have to prove that they have "adequate procedures" in place to prevent bribery - such as training for staff, risk assessments and promoting an anti-corruption culture with clear leadership from the top. 

Richard Alderman from the UK's Serious Fraud Office, is reported as reinforcing this need for creating anti-bribery culture, saying that he wants impetus for stamping out bribery to come from companies, not regulators.

‘I’ve asked corporations to tell us when they hear about these things,’ he says.‘I’m really interested in going after foreign companies in other jurisdictions that have beaten good firms to a contract because of corruption. I need some help on this.’ 

This is likely to lead to an increase of whistleblowing and some firms themselves have welcomed this.

In the article he also sets out the breadth of the jurisdiction, pointing out the potential for firms with no business operation in the UK, but using services such as banking advisers or PR firms to be targetted.  'My view is that they’re carrying on business and they’re in our jurisdiction.  We’re not interested in low-hanging fruit. Those who think they can continue bribing are in for an unpleasant shock.’

There are those who criticise the Act, saying it will make things harder for business.  But this thinking reflects a short-term mentality and is not conducive to longer term sustainable business.  As is also reported by Reuters many officials disagree with such short-term views:  The "Arab spring", they say, has reminded governments of the potential political costs of corruption and may prompt them to seek deals with firms they know will not make matters worse.  As Global Witness state in their press release today: “Bribery is not a victimless crime, nor an inevitable cost of doing business abroad. Corruption has devastating impacts on the worlds poorest as it diverts huge sums of money away from investment in schools, hospitals and other basic social services and into useless overpriced projects, as well as providing funds to subvert elections and keep the wrong people in power"

As recent events have shown, and continue to show this comes at a cost to business.  CIMA feels strongly that finance professionals have a key role to play in both assessing risk around bribery and promoting ethical practices - find out more about the Act and its global implications here:  www.cimaglobal.com/briberysurvey

CIMA also provide a confidential whistleblowling helpline through independent charity Public Concern at Work - www.cimaglobal.com/Professional-ethics/Support-lines-and-legal-advice/