Bribery Act may exempt UK-listed foreign companies

Leaked guidance leads to claims of unfair advantage claims.
Foreign companies listed in London could be exempt from prosecution under the new Bribery Act, according to reports.

Draft guidance leaked to national newspapers is said to show that the Ministry Of Justice (MoJ) does not intend the act to include foreign-domiciled firms which are listed on the London Stock Exchange, but otherwise have no presence in the UK.

According to a report in the Daily Telegraph, the MoJ has changed the treatment of foreign companies following pressure from the London Stock Exchange and investment banks, which rely on foreign listings to generate millions of pounds in fees.

Under the Bribery Act, corporations are also liable for breaches of regulations by individual members of staff.

Excluding foreign companies, and possibly absolving them of liability for the actions of their subsidiaries, would give those companies an unfair advantage, analysts have warned, and could lead to UK-based companies relocating.

Implementation of the act – which was passed into law under the Labour government – was delayed by justice minister Kenneth Clarke for a second time in January, to enable clearer guidelines to be established for businesses.

The act has previously been attacked by business groups, with the CBI describing it as “not fit for purpose”. As well as damaging the competitiveness of UK companies, critics have complained about the confusing nature of the legislation, which could see the acceptance of corporate gifts classed as an act of bribery.

The Guardian has reported that the MOJ’s amended regulation contained the draft wording: “The government would not expect, for example, the fact that the company’s securities have been admitted to the UK listing authority’s official list, and therefore admitted to trading on the London stock exchange, in itself to qualify that the company is carrying on a business in the UK … for the purposes of [the act].”

A spokesman for the Ministry of Justice said: “We cannot comment on unfinished draft guidance which is yet to be made public. It will be for the courts to decide in initial cases whether foreign companies which have a presence in the UK fall under the scope of the offence.”

People Management

About elaineonyc

HR generalist who is passionate about the benefits of good HR practice. Experienced in delivering strategic and operational HR initiatives to clients in both public and private sectors. Specialises in working with SMEs.
This entry was posted in Law, Upcoming Legislation. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s