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FOCUS 30


THE RISKS OF NON-COMPLIANCE ARE CONSIDERABLE, NOT JUST IN TERMS OF THE


FINES THAT COULD BE LEVIED BUT ALSO BECAUSE COMPANIES CAN BE FORCED TO PAY BACK ANY PROFITS THEY SUBSEQUENTLY EARNED.


Oil and gas companies – used to operating in regions and businesses with a higher-than-average risk of bribery activity4


– are ahead of many other


sectors in tackling illegal payments. However, the complex nature of the sector also makes it one of the most challenging in mitigating risk.


Anti-bribery regulations


For many years, the US has led the way in prosecuting companies who fall foul of the law by making payments to foreign public offi cials in order to obtain or keep business5


. However,


recently the level of bribery and corruption legislation around the world has been steadily increasing. Many European countries, including the UK, have implemented legislation and more recently countries such as Russia and Brazil have also introduced new anti-bribery legislation.


The UK Bribery Act, which came into effect in 2011, is currently the most rigorous anti-bribery legislation in the world. The UK Act applies not only to any UK-registered company but also to any non-UK company that does business in the UK, it covers both private and public sector bribery and it includes a ‘corporate offence’ of failing to prevent bribery by an ‘associated person or persons’ (ie, anyone acting on the company’s behalf, which covers a wide range of third parties including agents, subcontractors, and intermediaries).


The only defence to the UK Act’s corporate offence provision is that the company has ‘adequate procedures’ in place to counter corruption and bribery. While ‘adequate procedures’ are not offi cially defi ned in the legislation, the UK Ministry of Justice (MOJ) has issued guidance that sets out six guiding principles that are intended to form the basis of the procedures that a company should implement in order to demonstrate that it has done everything in its power to reduce the risk of corrupt activities.


4 As evidenced by TI CPI and TI’s Bribe Payer’s Index. 5


The US Foreign Corrupt Practices Act (FCPA) enacted in 1977 makes it illegal for any US citizen, issuer or foreign fi rm or individual undertaking business in the US, to make payments to a foreign governmental offi cial in order to obtain or keep business.


© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.


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BRIBERY & CORRUPTION


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