Find out what the UK's Bribery Act 2010 (which came into force on the 1st July) means for you & your business.... By, Francine Pickering, Clarity Marketing

 

The Bribery Act 2010 comes into force today, 1 July 2011. Under this Act is an offence for an individual to give, promise or offer a bribe or to request or agree to receive a bribe and the maximum prison term for these offences has increased from 7 years to 10 years.

There is also now a new corporate offence of failing to prevent bribery, punishable by potentially unlimited fines for the company involved.

So what constitutes a “bribe” and will that affect you if your current business development practices involve and element of corporate hospitality.

The good news is that the updated Ministry of Justice guidance has greater clarity than previously on the issue of corproate hospitality, stating "The Government does not intend that genuine hospitality or similar business expenditure that is reasonable and proportionate be caught by the Act, so you can continue to provide bona fide hospitality, promotional or other busines expenditure."

As long as your activities are "reasonable and proportionate" you can continue doing such things as:

  • Provide tickets to sporting events.
  • Take clients to dinner.
  • Offer gifts to clients as a reflection of your good relations.
  • Pay for reasonable travel expenses in order to demonstrate your goods or services to clients.
  • And even keep giving away those free pens!

It’s worth noting, though, that the Act has extra-territorial scope and covers offences committed by UK companies, their employees and agents acting overseas. This might have implications in countries where gift giving (in either direction) is the norm to an extent beyond that we would usually engage in in the UK. You need to take care to balance cultural niceties with the requirements of the Act.

So how do you make sure you stay on the right side of the law? These recommendations should help.

  • Ensure you have procedures in place designed to prevent bribery and that they are communicated in writing to employees.
  • Think about your corporate hospitality and promotional expenditure – are you comfortable justifying it as “reasonable and proportionate”?
  • Ensure all hospitality you offer could not objectively be perceived as being designed to influence the recipient unfairly.

There is no specific mention in the guidance about B2B incentive schemes such as rewards for sales of a specific product. This has not previously been an offence and the Act is not intended to criminalise previously legal activity. It might, however, be wise to ensure that any such incentive schemes are open, transparent and impartial.

So it seems there is no need to panic or to change your practices drastically – however, clarifying your own good practice and ensuring you have procedures in place to prevent any inadvertent involvement in bribery would be sensible.

More guidance in the Ministry of Justice Bribery Act 2010 Guide.

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