Business News

Bribery Act takes effect on 1 July

Time is ticking away for businesses to make sure they have taken the steps appropriate to their operations to prepare for the Bribery Act, which comes into effect on 1 July 2011.

The implementation of the Act was held up following a delay in publication of guidance on its measures, which had been due early in the new year. The guidance was eventually published on 30 March.

A key element of the new Act is that it creates a new offence that can be committed by commercial organisations which fail to prevent persons associated with them from bribing another person on their behalf. The only defence will be to show ‘adequate procedures’ (not defined in the Act) to prevent bribery.

The Ministry of Justice guidance says many organisations, particularly those whose business is carried out primarily in the UK, will face little or no risk of bribery.

But it adds: ‘If you operate overseas, the risks may be higher. Factors such as the particular country you want to do business in, the sector which you are dealing in, the value and duration of your project, the kind of business you want to do and the people you engage to do your business, will all be relevant.

‘If there is very little risk of bribery being committed on behalf of your organisation then you may not feel the need for any procedures to prevent bribery. If, having assessed the position, there is a risk of bribery then, if you want to rely on the defence [of adequate procedures], the procedures you adopt should be proportionate to that risk.

‘In micro-businesses it may be enough for simple oral reminders to key staff about the organisation’s anti-bribery policies.’

One area of concern over the Bribery Act has been how it will affect hospitality. The Ministry of Justice guidance says: ‘As a general proposition, hospitality or promotional expenditure which is proportionate and reasonable given the sort of business you do is very unlikely to engage the Act.

‘So you can continue to provide tickets to sporting events, take clients to dinner, offer gifts to clients as a reflection of your good relations, or pay for reasonable travel expenses in order to demonstrate your goods or services to clients if that is reasonable and proportionate for your business.’

For specific questions or concerns relating to your business, you should always take legal advice from a solicitor.

LINK: Ministry of Justice guidance