British firms have said that the new legislation has resulted in lost contracts and compliance costs have sky-rocketed.
The Bribery Act means that firms operating outside of the UK are susceptible to domestic laws despite high levels of corruption elsewhere in the world. This has meant that companies are now loosing out to unscrupulous competitors that are not bound to the same restrictions.
The Fraud, Investigations and Disputes Services team at Ernst & Young revealed the new research today which highlighted how, of those who considered the law damaging, 78% cited the effects of losing out to competitors paying bribes and 22% mentioned the cost of compliance placed on companies as a negative to come from the change of law.
The findings, though less stark than fears last year over the damage the Act might do to UK competitiveness, nevertheless, reflect a continuing uncertainty about its impact. Only 30% of those with awareness of the new laws were convinced they would not ultimately damage British competitiveness.
These findings, based on a survey of 1,000 UK middle managers, shows much uncertainty is based on lack of awareness and misconceptions about the Act which came into force in July. Perhaps this isn’t surprising, given that the survey also revealed only 15% had received any kind of training or guidance from their employer about the Bribery Act.
John Smart, partner at Ernst & Young explains: “Businesses may feel that they have been placed at a competitive disadvantage due to the Bribery Act. In the short term it may seem to hand opportunities to less scrupulous competitors, particularly in sectors or countries where the risks of bribes or facilitation payments are more common.”