Companies dare not simply pay lip service to new anti-bribery legislation due in force this year, an expert has warned.

If they do then they are likely to suffer the consequences, said Charles Arrand, a partner at the Birmingham office of law firm DLA Piper.

"Businesses really need to act now," he cautioned. "We are moving into a new world where there is a legal and ethical duty to prevent bribery. 

Boards cannot afford to be complacent and one senses in the current climate a nervousness on the part of investors regarding this area of law. Companies striving for the ethical high ground will need to self-examine past behaviours to see if they need to take action before the authorities come knocking.

"Past behaviour can no longer be swept under the carpet and forgotten about. Investigators and prosecutors are exchanging information, intelligence gathering is becoming more sophisticated, prosecutors are expecting companies to self-report and whistle blowers are on the increase. 

"Companies cannot merely pay lip service to anti-bribery and corruption compliance. Those that have proper procedures and training will be able to point to them as part of any mitigation or defence strategy if they are investigated or prosecuted.  Those found wanting are more likely to be prosecuted and convicted." 

The Bribery Bill is making good progress through Parliament. Royal Assent is expected in April albeit there will then be a delay before the new legislation comes into force.           

There are two general bribery offences - bribing someone or being bribed - and a new corporate strict liability (ie no intention or recklessness is required for the offence to be committed, as in speeding offences) offence of "failing to prevent bribery", which places a positive duty on businesses to take active steps to prevent bribery . The only defence to the corporate offence will be that of adequate preventative procedures. "Adequate procedures" have not yet been defined, but under pressure from businesses for clarity in this regard the Government has now intimated that it will produce some guidance in due course.

There is also a specific offence of bribing a foreign public official.

Companies are liable where bribes are paid with the intention to obtain or retain business. It covers employees, agents and subsidiaries in the UK or overseas.

Senior officers who consent or connive in a corporate offence are liable as individuals.

Individuals found guilty face up to ten years in jail and/or an unlimited fine. For corporates the fines are unlimited.

Mr Arrand said: "To mount a successful defence under the proposed bribery law a company will need to demonstrate that bribery ostensibly committed on its behalf was a rogue act contrary to its policies and procedures and that such policies and procedures were robust and effective..

"Prudent companies will have anticipated these challenges, assessed their risks and implemented meaningful compliance measures. Those that lag behind need to start taking action now or risk serious damage to their reputation and business. The prospect of fines without upper limit, imprisonment, the associated legal costs and the potential for confiscation proceedings under the Proceeds of Crime Act post conviction, as well as the ethical imperative, should provide the incentive for most responsible businesses to get their houses in order as soon as practicable." 

And the net is also closing on those who risk insider dealing.

It follows recent successful prosecutions brought by the Financial Services Authority.

Mr Arrand said: "This has sent a strong message to those with the opportunity to benefit from inside information.

"The FSA has made it a priority to target business professionals, repeat offenders and organised rings. Investigations are ongoing. The FSA has three further insider trading trials scheduled for 2010."

The FSA has the choice to pursue either a criminal case through the courts or for market abuse. Sanctions for market abuse include unlimited financial penalties and prohibition of offenders from operating in the financial sector.

Mr Arrand said: "It is critical that all individuals and firms, whether regulated by the FSA or not, handle inside information carefully, and in accordance with the law and any applicable regulations.  Similarly, anyone who is, or could be, regarded as an 'insider' needs to ensure that they meet their legal obligations if they are to avoid being accused of an offence."