LONDON, March 29 (Reuters) – Banks in Britain do not have
effective anti-bribery and corruption controls and the financial
regulator is considering referring some for further
investigation and possible fines.
Despite the introduction of the draconian Bribery Act last
year, the Financial Services Authority (FSA) said on Thursday
that nearly half of banks it visited as part of a review failed
to mitigate these risks adequately.
“Overall, despite the high profile of the issue, the
investment banking sector has been too slow and too reactive in
managing bribery and corruption risks,” Tracey McDermott, acting
director of enforcement and financial crime, said.
After spot checks on 15 firms, including eight global
investment banks, the FSA said most groups failed to take proper
account of anti-bribery and corruption rules and that management
information on these risks was “poor”.
The FSA also highlighted “significant issues” in companies’
dealings with third parties used to win and retain business and
said only a few firms had processes to ensure gifts and expenses
to particular clients were reasonable on a cumulative basis.
Only two firms visited had either started or carried out
specific anti-bribery and corruption audits.
“The FSA is considering whether further regulatory action is
required in relation to certain firms in its review,” it said.
The Bribery Act, which came into force last July, caused a
furore when it introduced a new offence of failure to prevent
bribery, which makes businesses with any UK interest criminally
liable if staff, subsidiaries, intermediaries or “associated
persons” offer bribes across the world.
The act, which is enforced by the Serious Fraud Office, also
clamps down on “facilitation payments” and disproportionate
hospitality to oil the wheels of business. Companies risk
unlimited fines if they breach rules. Guilty individuals face up
to 10 years in prison and unlimited fines.
The FSA’s remit is limited to institutions’ systems and
controls. If the regulator were to find wrongdoing, it would
refer the matter to the SFO or the Serious Organised Crime
Agency (SOCA), a specialist police unit.
(Reporting by Kirstin Ridley; Editing by Mark Potter)