September 20, 2010
With confusion still surrounding the reach of next April’s Bribery Act, recent guidance has left many fearful that hospitality treats could land them in trouble amidst a stream of bureaucratic nightmares.
According to recent reports, many UK companies are unaware that measures in the Bribery Act cover day-to-day practices in addition to more obvious instances of bribery, i.e. to foreign officials.
But draft guidance issued by the Ministry of Justice (MoJ) this month stated that all businesses will have to keep records of the hospitality staff receive and company hand outs, meaning lavish corporate events could potentially become a thing of the past.
The guidance gives examples of potential pitfalls, ranging from a company that hosts a government delegation inviting an entourage made up of officials and family members, to an example of a mid-sized company working as part of a consortium where the overseas partner routinely offered bribes.
"[The legislation] applies to all entities, from the top of the FTSE 100 to small, start-up companies,” commented Will Kenyon, a partner at PricewaterhouseCoopers. "You [UK businesses] really have to start to capture this so you can try to manage and control it."
Companies will have to "risk assess" the full range of corporate hospitality offered to potential clients, from the level of hotel accommodation provided to off-hand gifts such as entry to sporting events.
In addition, firms will be strictly liable for not just the conduct of their employees but also their agents anywhere in the world.
With fines unlimited, the Bribery Act has become one of the most feared pieces of business legislation in decades and could transform the way UK firms, both big and small, are run.
