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Minding our own business There are, however, some lawyers across the islands who insist this panic is misplaced. Both Jersey and Guernsey already have their own corruption laws, and the vast majority of their businesses, being finance-based, already have robust anti-corruption measures. Others feel the Act’s purpose is to satisfy

If someone gives a bribe when acting on your behalf – as an employee, subsidiary or third party – your company is liable

business and an entrepreneur on the other side of the world, but it’s also being both vague and far too proscriptive. “The extensive reach of the Act has certainly raised my eyebrows,” says Hiren Patel, Partner at VerrasLaw. “Modernising UK law to monitor and control how people deal with public officials and tender for business from public enterprises makes perfect sense, but the UK is now clamping down on any transaction, public or private, undertaken not only by businesses operating in the UK, but also to their intermediaries worldwide – plus all British citizens anywhere in the world! The Act has lurched too far from its sound rationale.” Patel lives and works in Jersey, but has a UK passport, meaning that his business transactions will now come within the remit of the Act, exposing him and his business to criminal liability even though he has no business operations in the UK and has no intention of residing in the UK. The Bribery Act also applies if a ‘person has a close connection with the United Kingdom’, and a ‘close connection’ includes a person who is a British citizen. According to a spokesman in International Relations at the States of Jersey: “Jersey passports are British passports issued in Jersey, in the same way that UK passports are British passports issued

in the UK. They have exactly the same status with regard to citizenship.” Patel cites that sections of the Act that deal with hospitality will need particular clarification from the enforcement agency responsible for policing it. The issue relates to the subjective nature of what is ‘reasonable’ when a business is sourcing new, or trying to retain its existing business. The UK government has stated that it’s only out to punish gifts that influence the giving of contracts, and not anything that’s ‘reasonable’. Yet the term ‘reasonable’ is incredibly hard to define – especially when you’re working overseas. In the Far East, the practice of gift-giving is not only legal and accepted, it’s considered a necessary part of business etiquette. The law, says Patel, is impracticable. Firstly, he says, how will the Act be enforced against British Citizens based outside of the UK? Secondly, how are you expected to explain to potential business intermediaries that you, as a Jersey-based business, have a legal obligation under UK law (a separate jurisdiction to Jersey), that you may not be involved in offering an incentive to garnering business. So any business gifts are going to be token only, and payment for business meals need to be split or the restaurants need to be vetted to make sure they are ‘reasonable’.

the OECD conditions on money laundering, arguing that common sense will guide all concerned, and that the UK government won’t have the political will to paralyse its businesses at such a tough time anyway. “People shouldn’t get too worked up,” says Billy Grace, a Partner at Carey Olsen. “The UK government won’t be flexing its muscles, arresting people in Jersey or Guernsey to take them to London. They’ll appreciate our law and trust our authorities to get on with things as they see fit.” Ripples of concern over the Act have, however, spread around the world. Peter King, a London partner at US law firm Well Gotshal & Manges appeared on India’s CNBC-TV18 describing the Bribery Act as: “The most comprehensive piece of anti-corruption legislation there is in the developed world.” How comprehensive? King described

the American FCPA as “a piece of legislation which has struck fear into the hearts of companies all around the world,” before adding that the UK Act was far tougher. Patel agrees with King’s assessment. “I’d suggest that anyone who says there’s nothing to worry about, should re-read the Act,” he says. The job of policing the Act comes down

to the SFO. Not an easy task. The organisation discovered this in March, when it collared the UK wing of American chemicals firm Innospec for bribery in Indonesia. The SFO negotiated with the American Department of Justice and Innospec over a punishment, only to be reprimanded by a Crown Court judge in the UK for acting beyond its powers.

Protect yourself The Act should erase such mishaps at least at the UK end, but the case serves as warning of the legal minefield you enter when trying to flex any legal muscle overseas. Cross-border cooperation may work with other stringent nations like the US, but whether it will go down so successfully in hazier areas remains to be seen.

Uncertainty over the precise implications of the Bribery Act will remain until the official guidance is published in the New Year. Yet

December 2010/January 2011 15 ➔

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