Sectors - Written by Barry & Richard on Sunday, March 3, 2013 13:51 - 1 Comment
The Bribery Act, its material impact since 2011 & the Aston Martin analogy…
Critics point to a lack of enforcement (beyond a low level court clerk in August 2011 and a taxi driver in December 2012) as evidence that it is an overhyped piece of legislation that does not, in practice, amount to a hill of beans.
In 2011 Howard Sklar asked if, after replacing the clapped out Taxi Cab that was the old UK anti-bribery law, the SFO would take the shiny new Aston Martin Bribery Act out of the garage.
It’s fair to say that most haven’t seen the new Aston Martin just yet.
But it’s out there.
The SFO have confirmed that they have various Bribery Act case projects in the works.
In the meantime, though the Bribery Act has already had, in our view, a profound effect.
In a post last week Mike Koehler the FCPA Professor referencing a recent survey conducted by US (and soon to be transtlantic Law Firm Fulbright & Jaworski) said:
“The last survey result in the report perhaps speaks best to the over-hyped nature of the U.K. Bribery Act.
“Has your company changed the way it operates due to the emergence of anti-bribery legislation outside the U.S., such as U.K. Bribery Act 2010?”
- 78% of U.S. respondents answered “no” and 63% of U.K. respondents answered “no.””
Or maybe not.
As people whose pint glasses are half full (not empty) this means that 37% of the UK respondents have changed the way the way they operate.
Not bad without having to mete out any punishments so far and it’s a statistic which is more than supported by our anecdotal experience.
We are seeing large numbers of UK and other non-US businesses who have put in, or are putting in, place anti-bribery controls over the course of the last two years.
Today anti-bribery is a Board agenda item.
We see anti-bribery diligence as a routine diligence item on transactions in a way that it simply did not, before the advent of the Bribery Act, feature.
That only 22% of US companies have changed their ways does not surprise us.
Many US commentators and advisers advised and advise clients to adopt a wait and see approach.
Their theory: that existing FCPA policies, even though some might permit paying facilitation payments contrary to the UK Act (a bad idea), are good enough. If they don’t outlaw facilitation payments they are not.
It’s also worth remembering that not every US business has FCPA compliant policies and procedures after 36 years (let alone 18 months) – as the list of US FCPA enforcement actions testifies to. In the first couple of years of the FCPA precisely practically nothing happened from an enforcement perspective.
For those seeking instant gratification then the Bribery Act, it turns out, is not Coca Cola.
But we’ll stick with the Aston Martin analogy.
Aston Martin took off with the arrival of a certain David Brown. The SFO now has David…Green…
But on a serious note, the impact of the Bribery Act should not just be measured in enforcement (though that will happen). It’s ultimate purpose was to foster behaviourial change.
The genie is out of the bottle, the Aston is out of the garage and 18 months in change is already happening.