A key feature for non-UK companies to be aware of, including those based in the Middle East, is that the corporate offence of failing to prevent bribery applies to all companies that are doing business with the UK. The individual offence, meanwhile, relates not only to UK nationals but also to those ordinarily resident in the UK. And due to the extra-territorial nature of the act, the law can be breached where an act is committed outside of the UK that would constitute an illegal act if committed in the UK. The legislation therefore has implications for a growing number of companies in the Middle East trading with the UK.
Affected companies are now in the process of assessing the implications of the act for their businesses. The priority for all managing boards is to ensure that they have adequate procedures in place to prevent anyone acting on their behalf – including third parties in other jurisdictions – from committing an act of bribery. From a regional perspective, the UK legislation is being introduced at a time when the Middle East has placed corporate governance and internal controls at the top of the agenda to safeguard economic growth. Some recent high-profile corporate crises affecting companies in the region have galvanised commitment throughout the region for stronger regulation within companies. Therefore, these two agendas are set to positively reinforce one another in the long term.
A key area in which the anti-corruption and corporate governance agendas overlap is in the importance of an embedded Code of Ethics. Many companies may have a set of principles on paper which employees may be aware of but not understand the relevance of. For a Code of Ethics to truly be effective in mitigating fraudulent or corrupt practice, strong management leadership is required and methods sought to make a Code of Ethics both relevant to staff, wherever located, as well as applicable to their roles within an organisation. Staff, agents and consultants all need training and education, especially in ‘grey areas’ such as corporate hospitality, where risks are more subtle but still real. Meanwhile, robust procedures for selecting, vetting and monitoring third parties must equally be prioritised for any company affected by the legislation, especially those trading through third parties in opaque or high-risk markets.
via UK raises the bar in corruption battle – Emirates Business 24|7.
