Government sets date for bribery law

31 March 2011

31 March 2011 | Lindsay Clark and Paul Snell

“Reasonable and proportionate” corporate hospitality will not be classed as bribery under new legislation, the government has confirmed.

Yesterday the Ministryof Justice announced the Bribery Act will come into force on 1 July this year, following the publication of guidance clarifying what companies have to do to prevent corruption and avoid prosecution.

“Bribery is one of those things we know when we see – it is a cynical attempt to manipulate someone's judgement by financial or similar means,” said secretary of state for justice Ken Clarke in a statement.

“The guidance makes clear that no one is going to try to stop businesses getting to know their clients by taking them to events like Wimbledon, Twickenham or the Grand Prix. Reasonable hospitality to meet, network and improve relationships with customers is a normal part of business.”

Theguidance, publication of which has been delayed since February, said the procedures businesses are advised to put in place would be proportionate to the size of their organisation - so the burden on smaller organisations would be less.

However, anti-corruption campaign group Transparency International UK described the guidance (which is what will be used to interpret and enforce the law) as “deplorable”. It said there is now a “significant risk” bribery will go unpunished because the guidance offers a lot more freedom than it hoped.

It is deplorable that changes made to the draft guidance since late last year, and now enshrined in the published version, depart from international good practice in several areas,” said Chandrashekar Krishnan, TI UK executive director. “The Ministry of Justice has exceeded its brief with this final guidance which undermines the Act and will limit its effectiveness.”

Guidancefor prosecutors was also published jointly yesterday by the Crown Prosecution Service (CPS) and the Serious FraudOffice (SFO). The purpose of this guidance is to set out an approach to deciding whether to bring a prosecution under the Act.

The Act creates four distinct criminal offences of bribing another, being bribed, bribing a foreign official and, for commercial organisations, failing to prevent bribery.

Keir Starmer, head of the CPS, said: “While the Act takes a robust approach to commercial bribery, it also applies to individuals who attempt to influence the application of rules, regulations and normal procedures.”

SFO director Richard Alderman added the Act would be enforced vigorously, but the organisation would work with businesses to resolve any concerns they had.

And according to Sam Eastwood, head of business ethics and anti-corruption group at law firm Norton Rose, stricter bribery laws are now becoming more commonplace around the world.

"China has recently introduced measures to combat the bribery of foreign public officials,” he said. “A further incentive for all companies to address their bribery risks is that, for their own protection and reputation, their business partners may wish to see evidence that they have adequate procedures to prevent bribery."

The Bribery Act replaces a number of existing common law offences, which were regarded as outdated and unfit for purpose.

☛ A full update on the Bribery Act will appear in the April edition of Supply Management

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