THE UK Bribery Act, 2010, which came into force on July 1, 2011, will

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affect all the Indian companies that have operations in the UK through their subsidiaries.

The Act brings commercial organisations operating in UK to criminal liability, punishable by an unlimited fine for failing to prevent bribery. “Post the Act coming into force companies need to have a robust risk assessment process and that any policy or procedural enhancements have been properly identified and implemented. Failure to do so will mean that there will be no possibility of a defense in case the UK’s Serious Fraud Office (SFO)the authority enforcing the ACT bring an action against an organisation for a bribe that has been paid on their behalf,” Sumit Makhija, senior director, Deloitte Touche Tohmatsu India said.

The UK Bribery Act is on the lines of the United States Foreign Corrupt Practices ACT (FCPA).

Hundreds of Indian companies that have a UK parent or has a subsidiary or operation in the UK will have to take guard against the new Act now, he said.

“There are at least thousand Indian companies that will get affected by the UK Bribery Act,” Neeta S Potnis, senior director, Deloitte Touche Tohmatsu India said. The impact of the Bribery Act will be far reaching. Promotional activities including corporate hospitality are likely to become increasingly sensitive issue for companies to consider, according to New York-based business law firm Debevoise & Plimpton LLP.

“The regime across the world is getting tougher and tougher as the regulators across the globe are increasingly active in enforcing anti-corruption legislation,“ Lord Goldsmith QC, the European Chair of Litigation at the international law firm of Debevoise& Plimpton LLP , and former attorney general of the United Kingdom said in a lecture “The U.K. Bribery Act: What it Means for India and Rest of Asia.“

Several large Indian promoters owned companies have operations in UK.

Some of the big Indian corporates include Tata Group companies Tata Steel, Tata Motors, Tata Consultancy Services (Diligenta Ltd), Infosys, Wipro (Wipro Holding UK), Essar Energy.

Among the major UKbased companies that have operations in India are Cairn, BP(have joint venture with Tata-Tata BP Solar and now also with Reliance Industries in the oil exploration blocks) Essar Group company Essar Energy which is listed on London Stock Exchange has taken measures to safeguard its interests from the new Act.