The British Bribery Act will bring under its purview all companies headquartered in the UK or who are present in Britain. The law takes a zero tolerance approach towards corruption and makes companies accountable for corrupt practices. Companies will be held responsible even if their overseas units or subsidiaries or foreign partners are found to be involved in corruption – even without their knowledge.

The British law is significantly different from the US Foreign Corrupt Practices Act – under which global biggies such as Shell, Daimler and Siemens were prosecuted; says Justin Williams – partner in Akin Gump International law firm.

Explaining further, he said that the British law is applicable to both companies as well as private citizens and seeks to prosecute both the giver and taker of bribe. Plea bargain is not allowed and failure to prevent bribery will be treated as criminal offence. If convicted, unlimited fines may be imposed along with prison terms – extending up to 10 years.

“Companies need to know where to draw the line of resistance and how far to push back”, Williams added.

Criticising the law in its present form, Williams said it is written to be broad and vague. The only available defense under the law is to implement ‘adequate procedures”. The government is now preparing guidelines to define ‘procedures’, which will be in the form of outlines. Companies need to be aware of the situations they operate in and use their discretion, for which they will be held responsible later. However, the political appetite to enforce the law is not known, he concluded.

The proposed law has provision for prosecutorial discretion, meaning it be applied prudently. However, the global war on corruption is succeeding, observed Edward Rubinoff, another partner at Akin Gump.

Hinting that the new law may put British businesses at disadvantage, Rubinoff said after the US enforced Foreign Corruption Practices Act, American companies faced competitive disadvantages. The US Justice Department lobbied for five years with OECD (Organization for Economic Cooperation and Development) successfully for greater global enforcement.

He said the collective economic might of the US and its allies can prevail over other countries where their laws are not applicable.

The purpose of the new law is to “force change organically, in spite of long-standing customs and cultural norms,” Rubinoff said.

Russian President Medvedev had enforced a series of anti-corruption laws in 2009 as part of the National Plan of Counteraction of Corruption.

(Russian laws) “Do not apply to legal entities”, said Kirill Kabanov – Chairman of National Anti-Corruption Committee. They need to be applicable to companies as well.

Criticizing slow and tardy implementation of ant-corruption laws in Russia, Kabanov said some of the laws are useless.

However, Russia is moving towards a more compliant regime and the ‘Anti-Corruption Strategy’ - approved by President Medvedev in April, makes foreign bribery a criminal offence.