CGF ARTICLES, OPINIONS & EDITORIALS

Dismissing the UK Bribery Act could spell danger for SA companies (2012-08-01)

February 19, 2015  3566  3566   

The Act has proved to be one of the most robust pieces of bribery legislation created in the world to combat bribery and corruption in government and businesses, and experts now believe the Act expands upon many of the provisions originally set by the US Foreign Corrupt Practices Act of 1977.  It amends and reforms the UK common law as well as their criminal law vis-à-vis bribery.  Commenting further, a director of Werksmans, David Loxton says the Act provides a modern legal framework to combat bribery in the UK, including those parties affected by this Act outside the UK. “Through its application, it also seeks to alleviate some of the effects bribery has upon the poverty trap found in developing countries.  Although the UK Serious Fraud Office (SFO) is yet to take enforcement action under the UK Bribery Act, the new director of the SFO -- David Green CB QC -- stated he will not sacrifice solid prosecutorial demands for easy headlines,” continues Loxton.  David Green has made it clear that the SFO’s energies will be focussed on only the most important cases that undermine the confidence in the UK and the city of London, and those that undermine a level playing field.

“Whilst the Act is in itself a foreign piece of legislation to South Africa, the extra-territorial provisions of the Act could have a serious impact on the manner in which South African companies conduct themselves in the UK, and vice versa.  It is unlikely that we will have early answers on some of the thornier issues under the Act, such as, for example, the extent of the UK’s jurisdiction over non-UK companies, the limits of third party liability, and the borderline between acceptable corporate hospitality and a prosecutable bribe,” says Booysen. Commenting further, Loxton said it was self-evident that the SFO was more likely to begin enforcement under the Act by seeking prosecutions in cases where there is clear criminal culpability, before it ventures on to tackle cases that test the boundaries of the Act.  “As we have yet to receive an indication of the priorities of the SFO, it will be important for South African companies to apply their minds to this Act, and ensure they do not underestimate the extent and consequences of the Act,” said Loxton.

South African companies doing business in the UK need to ensure that their anti-bribery control measures reach any of their “associated persons” throughout the world, even those whose connections to the company may be tangential.  There are several factors South African companies will need to consider in relation to the Act, which relates to the four offences produced by the Act and it will be interesting to see whether the effects of the UK Bribery Act 2010 will reward whistleblowers in the UK or South Africa, as is currently the case in the USA.