Investment and insurance companies may have to invest significantly greater resources in vetting intermediaries to ensure all parties comply with strict new rules contained in the UK Bribery Act, which comes into force on 1 July, according to the law firm Dechert.
The new act goes considerably further than existing legislation because it extends to the receipt of bribes, not just the giving of them, and prohibits bribery in the UK and abroad.
It also creates the offence of failing to prevent bribery, which Dechert said is “by far the most onerous provision of the act”.
This has no equivalent in the existing US Foreign Corrupt Practices Act (FCPA), which financial services companies already pay to comply with. Neither is it covered by the systems and control requirements laid out by UK regulator the Financial Services Authority (FSA).
To comply with the new rules, companies will have to invest even more in demonstrating they have a “genuinely compliant culture” that protects against bribery being committed by anyone associated with the company, anywhere in the world, said Dechert.
In practice this will mean companies must invest more in vetting their intermediaries, especially those in foreign countries which have a high risk of corruption. Companies may also have to pay to train intermediaries in anti-corruption practices and ensure written agreements with all parties.
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