International - Written by on Tuesday, July 26, 2011 2:03 - 0 Comments

Why kiss & tell is not (necessarily) a bad thing – UK help for UK PLC overseas

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Last week we wrote about the new UK Government Overseas Business Risk service.   It’s a great first step on the road to the government assisting UK plc overseas.  But what happens in practice?  We took a look at what other government departments have to say and then tried our luck with an overseas embassy in a BRICS country.

This is what we found.

Kicking off with the government guidance we went back to the Ministry of Justice case studies and looked at those where overseas assistance is specifically suggested as a part of the potential Adequate Procedures a business should consider in a given example – we’ve posted on the case studies before.

The kiss

Looking at the specifics:

In Case Study 1 it is suggested that businesses “use…any UK diplomatic channels or participation in locally active non-governmental organisations, so as to apply pressure on the authorities … to take action to stop demands for facilitation payments.” Case Study 3 suggests “Seeking advice from UK diplomatic services and government organisations such as UK Trade and Investment”. Finally, Case Study 6 advocates  “making enquiries with the relevant authorities to verify the information received in response to [an agent’s] questionnaire”

So.  The Ministry of Justice is actively encouraging business to contact the UK embassies and consulates abroad as well as other government departments for assistance.

What about other government departments?

UKTI have this to say (our emphasis added):

In all cases Posts can only assist companies seeking to comply with the law. Officials are not able to obtain special treatment because of British nationality or interfere in local judicial procedures. However, officials may be able to take up justified complaints of discriminatory treatment, bribe solicitation or extortion with procurement agencies, ministries and local authorities.

“Officials are not in a position to provide legal advice to companies, nor give an opinion on whether particular arrangements would constitute an offence under UK bribery law. However, they can help companies identify public Government guidance and answers to frequently-asked-questions on current Bribery and Corruption Law. Posts will be provided with new instructions as part of the implementation of the new Bribery Act.

In addition to general advice on UK bribery law and preventive techniques, Posts may be able to help UK companies address certain concerns through local knowledge and contacts. Posts have a good understanding of the local business corruption environment, and many already contribute to mainstream anti-corruption advice such as FCO/UKTI’s Overseas Security Information for Business Service. Officials may also be able to give sensible advice on how companies might avoid pitfalls of local culture and business etiquette, which can lead the unwary into breaches of UK and often local law. ” [our emphasis]

In other words, UKTI posts in embassies and consulates may be able to offer practical help albeit, unsurprisingly the extent of that help is limited.

The tell

However, businesses liaising with embassies and consultates should be aware that their discussions may be relayed back to the UK enforcement agencies.  While it is obviously important that this is understood it is not necessarily a bad thing.

First, BIS. This department works with UKTI it says:

“UK overseas posts are regularly instructed to report allegations of UK involvement in foreign bribery and to provide advice and assistance to UK companies on managing the risks of corruption. BIS work with both UKTI and FCO to provide practical training on these instructions, including an on-line toolkit and regular briefings to outgoing Commercial Officers.”

So, in some cases, UKTI say they will have the ability to assist with more in-depth support and it publishes a list of its Contacts in Post here: Country Contacts.  The guidance goes on to say:

“Under the Civil Service Code, officials have an obligation to report evidence of criminal or unlawful activity, with suspected bribery reported directly to the Serious Fraud Office (SFO).

“By reporting cases of suspected bribery, officers at Post are acting in the interests of honest UK companies, the UK reputation, and bilateral economic relations. Preventing corrupt businesses from gaining an unfair competitive advantage helps to maintain a level playing field and upholds the UK’s international reputation.

“Officials may continue to advise a company on local corruption risks after having reported allegations of corruption regarding the company to the SFO. A company seeking advice on how to act on suspicions that their employees or associates may have already breached UK bribery law should approach the SFO directly”

For organisations who take the Ministry of Justice and the SFO at their word then the use of the diplomatic channels in tandem with an approach to the SFO could elicit useful advice as well as making a subtle statement that the organisation is playing by the rules.

Such an approach is likely to be logged and result in a less circumspect approach by the SFO if a question arises out of the conduct of the organisation in the relevant territory.

We road-tested the governments stated approach recently in our Russia visit.  We visited the UK’s Russian Embassy in Moscow.  The result.  The UK’s Russian embassy is to be applauded as one of the most active in its attempts to help UK businesses.  We were informed that officers at the Embassy would do what they could to help UK organisations entering the Russian market.

There was one caveat.  Resources are limited, so while the Embassy is able to assist organisations it has finite capacity.  It remains to be seen if demand exceeds supply.

We advocate businesses to take the government at its word.

Even if the resource constrained UK government cannot make good on its promises of help, at least no-one will be able to claim a business did not try.

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