New Bribery Act will impact upon China subsidiaries of U.K. companies
May 12 – The United Kingdom has passed legislation that, like the U.S. Foreign Corrupt Practices Act (FCPA), will impose serious penalties on overseas based subsidiaries of U.K. companies in terms of their business operations. Regarded as being even stricter than the FCPA regulations, the Bribery Act will have a far reaching influence, especially when it comes to China subsidiaries. More than any other anti-bribery regime in the world, it will put the U.K. at the forefront of the global anti-corruption and bribery drive.
Gathering the extensive range of information needed for effective due diligence is an arduous, time consuming task, especially where the business relationship involves other countries or where relevant information is in a language not easily understood by the researcher.
All U.K. businesses and any foreign businesses with a presence in the U.K. are required to have processes in place to prevent commercial bribery in sales and purchasing functions as well as the corruption of public officials. For subsidiaries in China, that means close definition of who is and who is not a government official – a moot point when 90 percent of China’s largest companies are state owned. Businesses and organizations now have a short window to ensure that they are able to comply with the United Kingdom Bribery Act (UKBA) by the time it comes into effect on July 1, 2011.
As companies struggle to understand the full implications of the UKBA, the onus is on individual businesses to proactively implement a strong set of anti-bribery procedures which are clearly understood throughout the organization, and to complete a thorough audit of all their business relationships and activities.
We provide below two documents for readers to evaluate. Firstly, a white paper on the U.K. Bribery Act courtesy of Michael Osaja at World Check. Secondly, our recent issue of China Briefing that outlines much of the points to consider concerning the U.S. FCPA, and which U.K. businesses should also take note of. The UKBA takes much of its structure from the U.S. legislation.
U.K. businesses requiring assistance in China with on-the-ground audit and compliance checks may contact Richard Cant, Director, Dezan Shira & Associates at our Shanghai office. Richard is a qualified CPA and lawyer, previously a partner with Ernst & Young. Communications may be made in full confidence to Richard at firstname.lastname@example.org.
U.K. Bribery Act: Set For Implementation (complimentary download)
With the release of the Guidance, the UK Bribery Act (UKBA) is scheduled to enter into force on July 1, 2011. Similar to the FCPA on many points – for example, the criminalization of a foreign public official – there are important differences too, such as the strict liability corporate offense as stipulated in the UKBA: failure to prevent bribery. Our detailed response looks at key differences.
The Foreign Corrupt Practices Act and its Impact on China Subsidiaries
This issue of China Briefing Magazine is dedicated to helping companies understand the Foreign Corrupt Practices Act and establish controls to prevent (and, if necessary) resolve FCPA noncompliance. Priced at US$10.