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The British government is set to unveil guidance for companies on the new UK Bribery Act on Wednesday, following several months of delays.
However, concerns that the guidance could exempt some foreign firms that are listed in London but don't have any UK-based businesses has provoked anger among investors.
The exemptions could taint London's reputation for integrity, and unfairly disadvantage British companies that are subject to all the restrictions in the UK Bribery Act, a group of investors representing $463 billion of assets warned in a letter to the Financial Times on Tuesday.
The logic that the foreign companies could be exempted because they had no other business in the UK apart from raising capital was flawed argued the representatives of the high-profile investment funds, including F&C Investments and Aviva Investors.
“As providers of this capital ‘a core part of our business' we challenge the possible interpretation that this does not amount to carrying out business in the UK.”
The Bribery Act 2010, creating a new comprehensive set of anti-bribery regulations to replace the existing fragmented system, was approved last April, but is yet to come into force following a series of delays.
It makes receiving or accepting a bribe an offence, as well as introducing a new discrete offence for bribing a foreign public official. The biggest change, however, is the introduction of a new offense for companies that fail to prevent a bribe being paid on their behalf. Firms will have to show they have adequate procedures to prevent bribery. The guidance expected on Wednesday will be focused on this part of the Act's section 7.
The guidance due on Wednesday will be non statutory, and is meant to help companies ensure they have adequate procedures in place to prevent bribery.
However, Mr Chandrashekhar Krishnan, Executive Director of Transparency International UK, is concerned that the guidance could end up providing interpretation of the law that second-guesses the intentions of Parliament when the Act was introduced.
“The purpose of the guidance is to clarify legitimate concerns of business about how it affects their operations and is not meant to redefine the scope of the act,” he told Business Line . “If the reports (about the exemption) are true this potential curve out would pull it apart.”
Britain ratified the OECD's Anti Bribery Convention in 1998, which required governments to introduce legislation to criminalise bribery. It has faced criticism for the slow pace of change. Most other OECD members introduced changes well ahead of the UK.
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