Avoiding corruption risks in the city: The Bribery Act 2010

International coordinated the report. This report is intended as a basis for discussion only. Whilst every effort has been made to ensure the accuracy and completeness of the material in this report, the authors, Liz David-Barrett, Transparency International, and the City of London, give no warranty in that regard and accept no liability for any loss or damage incurred through the use of, or reliance upon, this report or the information contained herein. A new Bribery Act received Royal Assent in April 2010. Many City businesses are unprepared for the impact this will have on their businesses, in particular the provisions for corporate liability and personal liability of directors. Companies need to put in place robust anti-corruption procedures as a matter of urgency to mitigate these risks. This report provides an overview of corruption risk for City businesses, focusing on the issues raised by the Bribery Act. It describes the Act and seeks to minimise uncertainty for City businesses about how it will be interpreted and enforced once it comes into effect. It also highlights the types of business activity which put City businesses at greatest risk in relation to bribery and prosecution. The Bribery Act is expected to reinforce the UK's international reputation for setting high standards in the regulation of economic activity and as a country that takes corruption seriously. A comparison with other leading international financial centres (see Table 3, page 41) indicates that UK regulation and enforcement are already among the best in the world, and around half of our survey respondents thought that London was less corrupt than other leading financial centres, while only 3% thought that it was more corrupt. However, the research conducted for this report also suggests that many City businesses engage in activities or operate in environments that expose them to risk of corruption, such as: • Operating in countries where corruption is perceived to be high. • Interacting with public officials. • Providing services to high-risk sectors such as construction. The drive to win new business can create pressures to cut corners, for example to skimp on due diligence or use local fixers about whom little is known. Businesses may also face strong pressures to pay facilitation payments to avoid delays in transactions. However, the new Bribery Act imposes strict penalties on individuals as well as companies if they bow to these pressures. Moreover, it puts the onus on companies …