Many British companies are planning to turn a blind eye to backhanders paid by their representatives to foreign officials, despite the introduction of tough anti-corruption laws, experts believe.
The Bribery Act, which came into force yesterday, will make it easier for prosecutors to secure criminal convictions against companies caught making corrupt payments in foreign markets.
Yet white-collar crime experts said that many companies were reluctant to adopt a zero-tolerance policy against smaller-scale bribery because they feared that they would lose business in some markets if they refuse to “grease the wheel”.
So-called “facilitation payments” — typically small bribes paid to accelerate the delivery of a public service, such as processing a visa — are allowed under American anti-corruption laws but are illegal in Britain, even though they are an everyday aspect of doing business in many countries.
Lawyers said that some companies, while they would take a robust stance against larger bribes to win new contracts, were unwilling to stop employees or agents making facilitation payments as they feared that business would grind to a halt in certain countries.
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Eoin O’Shea, a partner at the law firm Lawrence Graham, said: “Some people are reluctant to [impose a ban]. They’re saying: ‘We’ll worry about the risk of being prosecuted if and when it happens, but we can’t stop making these payments.’ ”
Brent McDaniel, a director at KPMG, said: “Most companies believe ‘grease’ payments are obligatory to conduct day-to-day business, especially when moving people and goods across borders.”
This, anti-corruption campaigners believe, will undermine attempts to stamp out corruption in developing countries and to level the playing field for honest businesses.
Several large multinationals have imposed an outright ban on facilitation payments, including AstraZeneca, BP, Rio Tinto and Diageo. BAE Systems, the defence giant, adopted a zero tolerance policy as part of an overhaul of its compliance policies stemming from a long investigation by American and British authorities, which ended last year with a £286 million settlement.
Philip Bramwell, general counsel for BAE, said: “[Our] policy prohibits the making of facilitation payments, with one exception: where the personal safety or welfare of an employee would be placed at risk by refusal to accede to a demand for such a payment ... Were it to occur, we would report the incident to the relevant authorities.”