Organisations need to act, not only due to the cost and corporate culture implications of bribery and corruption, but also because governments are increasingly taking a much tougher line on these issues by enacting anti-bribery laws and prosecuting where they believe breaches have occurred. The penalties are severe.
If your organisation operates in multiple jurisdictions, uses third parties such as agents, or has a variety of ways in which goods and services can be procured – you could be vulnerable.
To counter bribery and corruption, many governments have introduced anti-bribery legislation. In Australia, the Australian Criminal Code is in place, the US has the Foreign Corrupt Practices Act, and the United Kingdom (UK) has recently introduced their Bribery Act. All have implications as to the way Australian organisations operate across international borders.
Australian businesses operating in the UK could find themselves liable for prosecution under the UK's tough new anti-bribery legislation.
The UK Bribery Act 2010 is one of the broadest laws of its kind anywhere in the world. Effective from 1 July 2011, under the legislation, commercial organisations are liable for activities of associated third parties as well as those of their own staff.
Commercial entities based in Australia could be subject to the UK law if they carry on business, or part of a business, in Britain. This provision is likely to affect the many thousands of Australian entities that do business in the UK, even if this presence is a minor part of their overall operations.
Australian businesses in the UK could find themselves liable for prosecution through new anti-bribery legislation. The law states that after 1 July 2011 failure to prevent bribery will be a corporate offence.
Organisations must have an anti-bribery and corruption (AB&C) framework in place to prevent and detect such activity. These procedures enable the organisation to have adequate legal defence should an employee receive or give a bribe.
Organisations can develop an effective AB&C framework by:
- appointing an Officer accountable for AB&C
- issuing a strong AB&C statement from the board
- assessing risks and ensuring controls are sufficiently robust
- establishing appropriate whistle blowing procedures
- conducting regular checks especially in high risk areas.
KPMG Forensic works with clients to identify and manage their vulnerabilities to foreign bribery and corruption laws.