The Impact of the UK Bribery Act on International Business

Text-only Preview

The Impact of the UK Bribery Act on International Business
The UK Bribery Act enhances the sentencing power of courts and raises the maximum sentence for bribery
committed by an individual from 7 to 10 years imprisonment and/or with unlimited fine. It makes "failing to
prevent bribery" a criminal offence for commercial organizations and it not only applies to UK-based companies
but also those conducting business in the country, as well as to any individual "associated" with such an enterprise.
A determination regarding whether an organization is carrying on a business or a part of a business in the UK will
be made by UK's courts. To prove that a business carries on business in the UK, it is necessary for the business to
have "a demonstrable business presence" in the UK...............................................................................................................

The Act supersedes existing British laws dating back to 1889. It affects foreign companies with offices in the UK and
British companies operating overseas and seeks to prosecute companies and individuals who not only offer or
receive bribes but also fail to prevent bribery. The Act not only prohibits domestic and international bribery, but
also bribery across both private and public sectors..................................................................................................................

To minimize any risk of bribes being given or received, it is essential for firms globally to implement a robust
compliance program. It is also advisable for companies that come under the purview of this law to review their
existing anti-corruption policies and procedures to ensure compliance as appropriate. The onus lies on the senior
management to assess and establish anti-corruption policies and procedures and enhance training for their
personnel. According to the Act, an offence is committed where a person or corporate offers, promises or gives a
financial or other advantage to another, with the intention of influencing the latter in the improper performance of
his or her relevant function or activity.......................................................................................................................................

However, one should take note that certain expenditures which are essential for a commercial organization to
improve its image, establish cordial relations, etc. is recognized as an established and important part of doing
business and will not be in danger of being criminalized. Companies prosecuted under the Act must show they
have "adequate procedures" in place to stop bribes. The procedures include providing anti-bribery training to staff,
carrying out risk assessments, carrying out due diligence on the people being dealt with, monitoring and review of
the policies on an ongoing basis, formulating proper communication channels, to name a few.
In any international business expansion, it is best to employ the services of a professional whether it's surviving an
audit, capitalizing on business deductions, or finding tax-friendly ways to run your business, or help reduce your
tax obligations. A good service provider would be focused on providing exceptional assistance in various areas of
business like tax equalization expat, international accounts payable, etc.
Click here for more on intercompany transfer pricing & eu vat rules