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Bribery Act coming into force on 1 July

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The government has finally released its guidance on the Bribery Act and has indicated that the Bribery Act will come into force on 1 July 2011.

Significantly the government has softened its position on corporate hospitality.  The guidance is much clearer that normal corporate dining, sporting events and other ordinary activity are not bribery offences.  It is also clear that paying for overseas trips may be justified where there is a genuine business purpose such as factory inspections. 

It remains the case that if excessive hospitality is offered where there is no underlying legitimate business purpose, this could be construed as bribery.

Whilst much of what the Bribery Act does is not new law, a new corporate offence has been created.  This makes a company guilty of an offence if it fails to prevent bribery occurring within its business.  The responsible directors can be imprisoned and a material fine imposed if a company is prosecuted.  The Bribery Act specifically allows a corporate defence, if the company has instigated appropriate processes and so the act of an individual is just that - the act of an individual.

Ken Clarke stated that he did not believe the new corporate would be used widely, as prosecutions under it required the approval of the Director of the Serious Fraud Office.  Nevertheless it is likely that in the first year of it being in force there will be prosecutions brought to demonstrate that the Act has teeth and cannot be ignored.

The clock is now ticking for businesses to implement bribery policies and procedures, to enable them to minimise risk of being found guilty of the corporate offence of bribery.  The good news is that this now looks like a proportionate response is appropriate and no longer must a company's policies be akin to a sledgehammer to crack a nut.

If you have any questions about the Bribery Act, please contact Matthew Hattersley, Partner, on 0113 336 3351 or matthew.hattersley@clarionsolicitors.com

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