LONDON — Britain on Wednesday published guidelines for a new bribery law that would exempt foreign companies whose shares were traded on the London stock exchange if they did not have operations in Britain.
Legal professionals said that in watering down the guidelines from the bribery law passed by Parliament last year, the justice secretary, Britain’s top legal official, had bowed to pressure from some investors and executives who had argued that including foreign companies in the law would harm the position of Britain and London as a financial center.
The guidance, which is expected to go into effect this summer, says that British courts will decide whether a foreign-based company listed in London is carrying out business in the country. The Ministry of Justice publishes guidance as a final step before a law becomes legally binding.
Kenneth Clarke, the justice secretary, defended the guidance, saying that it clarified what companies were and were not allowed to do to win business, which would make Britain more attractive as a place to do business.
“Some have asked whether business can afford this legislation — especially at a time of economic recovery,” Mr. Clarke said in a statement. “But the choice is a false one. We don’t have to decide between tackling corruption and supporting growth. Addressing bribery is good for business because it creates the conditions for free markets to flourish.”
The bribery law, which overhauls the existing criminal law to make it easier for courts and prosecutors to respond to bribery and corruption offenses, was passed by Parliament in April 2010.
Its adoption was delayed several times as some businesses complained that certain parts of the law were too confusing, especially the parts about entertaining clients.
The guidance clarifies that corporate hospitality, like inviting clients to sporting events, is not considered illegal.
“For most this will mean business as usual, which is reassuring in the run-up to the London 2012 Olympics,” said Richard Abbey, managing director at Kroll, the risk consulting firm.
But the guidance does say that it is illegal for a company based or listed in Britain to make “unofficial payments” to “public officials in order to secure or expedite the performance of a routine or necessary action” — for example, paying a port to process some cargo faster.
Louise Hodges, a partner at the law firm Kingsley Napley in London, said the new law was mainly meant to encourage companies “to bring in procedures to prevent bribery” and to show that Britain was “a champion of good business practices.”
But Ms. Hodges also said that instituting the law would have its limits, especially for operations overseas, because of recent budget cuts to Britain’s Serious Fraud Office, which investigates and prosecutes fraud and corruption.
“Are we really going to be able to go out and conduct complex prosecution on a global scale?” she said.
Government spending cuts intended to repair public finances damaged during the financial crisis are expected to halve the Serious Fraud Office’s budget over the next five years.
Article source: http://www.nytimes.com/2011/03/31/business/global/31bribery.html?partner=rss&emc=rss
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