In its review of the recently enacted UK Bribery Act, the Organisation for Economic Co-operation & Development (OECD) has criticised the controversial law as lacking transparency and clarity.
However the report was largely supportive of the UK’s anti-corruption efforts, which its critics have described as overreaching and difficult to follow.
The OECD echoed some of those concerns in its report, specifically pointing to the Bribery Act’s reliance of the Serious Fraud Office (SFO), the agency responsible for enforcing the bill, on civil recovery orders to settle bribery cases.
These orders are subject to less judicial oversight and can come with confidentiality agreements that prevent the disclosure of key information after a case is settled. With less information available proper assessments of whether the sanctions the SFO enforce are effective, proportionate and dissuasive cannot be easily concluded, the OECD said.
The report suggests a move to criminal plea bargains – which do not have confidentiality agreements – would be a step in the right direction.
The lack of transparency at present means the UK misses out on providing guidance and raising awareness for businesses, the report said, and which some commentators believe is the reason many companies are yet to implement policies and “adequate procedures” to protect themselves from the Act.
The report also urged the UK to introduce Deferred Prosecution Agreements (DPA) – an agreement where a business reports on itself without the fear of prosecution.
DPAs are widely used in the US with the terms commonly requiring the company to subject itself to government oversight and pay compensation to those affected by any transgressions. As long as the company keeps the agreement the prosecution is deferred until it is eventually dismissed.
In the UK there is no system where crimes can be deferred or dismissed, so if a crime is serious enough a self-report could lead to prosecution, which does not encourage self-reporting, said the OECD.
Be sure to check out the June issue of PE Manager which will look at how the private equity industry has coped with the UK Bribery Act one year out since its inception.