Scots firms 'in dark' over new law on bribery

Lawyers say Scots firms are even more in the dark than their counterparts south of the Border on how to comply with the forthcoming Bribery Act, which could put constraints on corporate hospitality and limit businesses that operate in emerging markets such as Africa and the Middle East.

Barbara Bolton, an associate at Tods Murray, said English and Welsh firms will be actively encouraged to approach the Serious Fraud Office if they unearth a potential act of bribery within their ranks. If they do, they are likely to receive a softer civil penalty.

However, she says Scots firms have been advised not to approach enforcement bodies or they could feel the full force of the law.

Bolton called on the Crown Office in Scotland to issue guidance on how the Act, due to come into force in April, will be treated.

"There are huge doubts about what's going to happen in Scotland particularly as there is no indication from Scottish enforcement bodies about what their approach will be," she said.

"There's no guidance at all on what they will or will not be inclined to prosecute.

"It is confusing for Scottish businesses - even more so than in England and Wales."

The government has been warned the law risks "handcuffing" companies that export to emerging economies in Eastern Europe, Africa, the Middle East and Asia, where "baksheesh" or sweeteners are an everyday transaction to secure contracts.

While the US has similar anti-bribery legislation, American lawmakers have included allowances for "facility payments" so as not to disadvantage companies doing business in certain parts of the world.

Diane Turner, a director at the law firm Burness, warned British companies may struggle to compete in emerging markets as they may face prosecution if an employee offers a facility payment.

"In the short term it's going to be an inhibitor to UK companies doing business abroad," she said. "There are some cultures where these payments are endemic. It's just how the whole thing operates.

"In a sense it's seen as British firms being handcuffed more than their (international] competitors."

Turner said her firm has been inundated with questions from worried firms uncertain how to comply with the law.

David Lonsdale, assistant director at the CBI in Scotland, said firms also need greater clarification on the rules about corporate hospitality.

"There is a risk some parts of the Act's implementation could have a negative effect on investment in the UK. In particular, we want the government to clarify rules on corporate hospitality, to ensure people who are engaged in legitimate promotional activity are not caught out."