May 28, 2010
Yesterday, in London, TRACE conducted a full-day benchmarking symposium attended by over 60 company representatives and featuring speakers from government, the private bar and in-house legal and compliance departments. Anne Richardson of TRACE reports the following findings:
"The TRACE UK Anti-Bribery Symposium featured discussions of the new Bribery Act and its anticipated impact on UK government enforcement and on the compliance programs of UK companies and foreign companies operating in the UK. Several themes emerged over the course of the day.
First, the new Bribery Act has been greeted with a significant degree of uncertainty and confusion in the corporate world. Interpretations of the act by different government speakers at recent public events have been vague and inconsistent. With regard to the defense of adequate procedures, the business community awaits SFO guidance on the subject (which was originally to be delivered in July, but there are many rumors of delay). At the same time, most expect the guidance to provide merely a broad outline of best practices already widely recognized and disseminated in the compliance community.
Second, the UK company attorneys, compliance officers and business managers at the event echoed the oft-stated frustration of their American counterparts when it comes to defining the parameters of acceptable business hospitality. Companies on both sides of the Atlantic crave concrete guidance from enforcement authorities on where to draw the line with regard to gifts, entertainment or travel provided to foreign government customers. The line between lavish and reasonable is impossible to identify with confidence, much less implement, but it is doubtful that the UK authorities will be any more forthcoming on this issue than authorities in the United States.
There is also widespread skepticism over the SFO's voluntary disclosure and cooperation programs. Judicial opinions in the recent Innospec and John Dougall cases call into question the SFO's ability to enter into settlement or plea agreements with either corporate or individual defendants. Companies considering voluntarily reporting a problem to the SFO, or individuals deciding whether to serve as cooperating witnesses, are justifiably doubtful that such actions will produce tangible benefits or true leniency when it comes to sentencing and penalties.
Finally, in response to a survey question, companies made it clear that they continue to fear investigation and prosecution by the DOJ and SEC in the US to a much greater extent than in the UK. This presumably is driven by the shear number of cases brought by the US government and the much higher penalties imposed. (Even in multiple-jurisdictional cases involving UK companies, such as BAE and Innospec, the US-imposed penalties dwarfed those imposed by the UK). There is also uncertainty surrounding the very future of the SFO and FSA, as the new Conservative-led government considers an agency reorganization.
The new UK Bribery Act has certainly created a lot of buzz, but it's too soon to measure its impact. For now, multinational companies will continue to look to US FCPA enforcement as the bellwether for evaluating corporate corruption risk and developing the necessary compliance response."