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Ten years in jail if firms use bribery at home – or abroad

Legal and risk management experts have this week urged engineers to prepare for a fierce government clampdown on corruption overseas or face imprisonment or unlimited fines for their company.

The warning came as justice secretary Jack Straw warned that corruption was something “which any decent society will not tolerate”.

Straw said that individuals and companies that flout the new bribery law will face tough penalties including up to 10 years’ imprisonment and unlimited fines.

The Bribery Bill is currently before parliament and is expected to become law later this year. It affects any person who has a “close connection” with the UK, even if the offence is committed abroad.

“Any right thinking person knows that this is something which any decent society will not tolerate.”

Jack Straw

“This is a really, really serious piece of legislation,” said Pinsent Masons partner Richard Laudy. “In relation to a sector that is increasingly global it is very important to put processes in place now to make sure that offences do not take place. The sanctions are severe,” he said.

The Bill went before parliament last November. If passed it will apply to any company that carries on a business or part of a business in England, Wales or Northern Ireland.

It will make it a criminal offence to give, promise or offer a bribe. In addition, it will be illegal to agree to receive, request or accept a bribe either at home or abroad, including bribery of a foreign public official.

It will also introduce an offence for a failure on the part of a firm to prevent bribery by a person performing services on its behalf. Businesses will be able to defend themselves if they show that they have adequate procedures in place to prevent bribery.

“Directors and managers will face criminal liability wherever their companies have committed bribery.”

Eleni Petros

Eleni Petros, senior vice president for risk management expert Marsh’s financial and professional practice, said the Bill was far more extensive than similar anti-bribery laws in other jurisdictions, such as the US’s Foreign Corrupt Practices Act.

“Directors, managers, corporate secretaries and other similar senior company officers will face personal criminal liability wherever their companies are found to have committed a bribery offence with their consent and assistance,” said Petros.

Firms found guilty also face unlimited fines and will be “automatically and perpetually” barred from all EU procurement activity.

“This is a really serious piece of legislation. The sanctions are severe.”

Richard Laudy

“The issue of how to deal with and prevent bribery should be dealt with as a priority by companies at board level, and robust anti-bribery controls should be put in place now,” added Petros.

The Bill is a key part of the government’s UK’s foreign bribery strategy, which sets out to change corporate culture.

Launching the strategy last week, Straw cited World Bank figures which showed that around $1trillion (£700bn) is paid each year in bribes and Transparency International estimates which show that 15% of Western firms have to pay bribes to win or keep business.

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