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UK firms face threat to competitive edge from anti-corruption law change

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REFORM OF anti-corruption and bribery legislation will put UK firms in a legal straight jacket and prevent them from competing internationally, UK companies warned this week.

On Monday the Home Office announced that it has asked the Law Commission to review bribery laws 'with a view to fundamental reform'.

Existing legislation is regarded as difficult to interpret. A draft bill in 2003 aimed at updating bribery and corruption laws met stiff opposition because it lacked clarity on what kinds of behaviour were deemed to be corrupt.

But it is feared that new legislation could subject UK firms to fiercer scrutiny than in the past.

'There's already too much scope for construction firms to be tarnished by association with less scrupulous companies, ' said a director at one major consultant.

'The trend towards forming project consortia is putting increasing levels of risk on consultants and contractors.

'There's a tendency to be assumed guilty [of participating in corrupt business practices] until proved innocent.

'There are already markets where we won't work because the risk of being accused is too high.

'There are also jurisdictions where we do work where it is understood that facilitation payments will be made. But if the Home Office is going to crack down on corruption, what kinds of activity are they going to allow?' He said the danger of falling foul of even tougher UK anticorruption laws could force firms to rein in their international business.

Partner at solicitor Howrey Melanie Willems, said that foreign firms would rush to fill the vacuum.

'Drawing up codes of conduct are admirable, and somebody has to lead the way. But as with the Kyoto climate agreement, getting international buy-in will be difficult.' She warned that any UK corruption clampdown would effectively be unilateral.

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