Bribery Wake Up Call

The Bribery Act could make it illegal to wine and dine a client at Wimbledon. No one can say for sure what will and will not be allowed

Wimbledon hospitality tents may be quieter.

There are 150 executive boxes at Twickenham, the home of English rugby, packed out on match days

Fuelled by a roast lunch and champagne, their occupants will cheer on Martin Johnson.

It could be a different story in future. New Laws could make corporate hospitality an offence. Flying in guests from overseas to the rugby or the tennis at Wimbledon might be construed as bribery.

The Bribery Act 2010 will have a profound impact on business. The problem is that nobody can say for sure what will and will not be allowed under the new rules.

Companies will be expected to decide for themselves what counts as “reasonable” or “proportionate” hospitality and then hope they do not incur the wrath of the authorities. It may catch all manner of conduct many would not consider to be corrupt.

The Bribery Act 2010 is the most powerful weapon yet developed to fight corruption.

The law makes no exceptions for things such as facilitation payments — that is, low-level bribery of public officials to do routine tasks, such as ensuring that lorries clear customs quickly, or phones are connected on time. So beware slipping a tenner to the BT engineer.

The legislation creates a new offence that puts the onus on companies to stamp out bribery at all levels of the organisation.

In the past a company could say [if an employee was found to be bribing people], we did not know about that, we didn’t authorise that. It was difficult to get at the company. Now it has been switched round.

To defend themselves against corruption charges, companies must show they have “adequate procedures” in place to prevent bribery. Quite what constitutes “adequate procedures” is not been made clear.

If a company wants to build a factory in a foreign country, it is common to bring government officials to Britain to show them an existing factory.

They would be put up in a hotel, wined and dined. Will that now be illegal? And will a Travelodge be acceptable but not the Savoy?

Another tricky scenario could be where a British company bids for a contract to build a factory or power plant overseas. The deal could depend on the bidder pledging to finance a school or hospital, too. Such promises could be a crime under the Bribery Act, if there is no explicit exemption written into the law of the overseas country.

The solution

Companies must ensure they have adequate procedures in place.

Consult the experts – for more information or a free legal opinion, telephone 020-7381-8111 (24 hour service) or email [email protected].