4 April 2012. Financial Services Authority visited eight global investment banks and seven smaller firms to ascertain the level of compliance of the new bribery law which took effect in July which is one of the strictest in the world. It found that only two of the banks had started or carried out internal audits on corruption controls.
It found that the banks it visited did not adequately assess the risk of employees paying bribes.
Under the new law, the companies must be able to defend themselves, in the event of an employee paying a bribe in any part of the world, by proving that they have instituted adequate procedures, controls and internal audits to prevent corruption.
In time to come the compliance of the new law will become part of the external audit as well. It is well known that in financial services industry, there is not only bribery but also fraud well entrenched in the system which has gone on unnoticed for a long time.