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The Bribery Act 2010


May 18 2011

The Bribery Act 2010

Relevance:             All firms

Action required:     Complete a risk assessment and implement appropriate anti-bribery procedures.

After some delay, this Act will now come into force on 01 July 2011.

The Act creates four new offences:

  • bribing another person;
  • accepting or receiving a bribe from another person;
  • bribing a foreign official;
  • failure by a commercial organisation to prevent bribery.

Part of the Act required the Ministry of Justice to produce guidance for businesses on what would be considered as “adequate procedures” being in place to prevent bribery and corruption, which would assist a firm in defending itself against a charge of failing to prevent bribery.

This has now been published and more information can be found at this link:

http://www.justice.gov.uk/guidance/docs/bribery-act-2010-guidance.pdf

One area of concern for firms and businesses is the extent to which corporate hospitality and promotional expenditure might constitute an offence under the Act. The guidance draws a distinction between reasonable and proportionate corporate hospitality and hospitality or promotional spending deliberately employed as a bribe.

And so there is a grey area between reasonable hospitality expenditure and lavish, disproportionate expenditure which could constitute an offence.  Firms will have to ask themselves when considering corporate hospitality whether proposed spending is commensurate with the reasonable norms for their industry. If the answer is ‘no’, there should be cause for concern.

Equally, simply asserting that the expenditure incurred was within the norms for the particular industry will not necessarily be a valid defence, particularly if there is evidence of a specific intention to bribe. Firms will need to ensure that they continually monitor accepted practice and regularly review what is commercially proportionate when considering hospitality and promotional expenditure.

In light of the Act, it is now more important than ever that firms ensure procedures are in place to record any gifts, entertainments or incentives received or given; that any activity that points to a conflict of interest is properly managed and that there is a provision for any employee to raise these types of issues with their line manager, without fear or retribution.

You must bear in mind that any actions taken should be proportionate to the risk involved.  Therefore, the initial approach should be to undertake a review of the firm’s existing business arrangements and relevant policies and procedures.

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