05 May 2011 #Employment
On one hand the Government is championing its ‘Cut the Red Tape` agenda. On the other it is bringing into law the Bribery Act 2010, which requires companies to implement comprehensive anti-bribery policies and procedures before the 1 July 2011 commencement date. Ken Clarke has been quick to reassure business that taking steps to combat bribery should be "largely about common sense, not bureaucracy". The official guidance on the Bribery Act which was released a few days ago does go some way to clarifying what ‘adequate procedures` for preventing bribery should be implemented.
So can you still take your clients out to dinner? Yes (in most circumstances). Should you fly a prospective client in a corporate jet to dine at a Michelin-starred Tokyo restaurant the night before presenting a tender proposal? Probably not. How corporate hospitality will be affected by the Bribery Act has been one of the main areas of fear and confusion. The Government acknowledges in the guidance that genuine hospitality is an important part of doing business (and integral in some cultures) and the aim is not to turn reasonable activities into criminal acts. Although the guidance provides examples of what types of hospitality would likely be reasonable and proportionate under the Act, companies will ultimately have to make judgement calls as to what may cross the line into bribery in a particular situation.
UK-registered businesses which operate in several different countries will have to be particularly vigilant to ensure the higher standards set by the Bribery Act are adhered to in their overseas activities. For example, the use of facilitation payments (small bribes made to facilitate routine government services) is not illegal in the United States, but such a payment would certainly fall foul of the Bribery Act.
Only time will tell whether or not the Serious Fraud Office will take a "common sense" approach to enforcement envisaged by the Government or a much more hard-line one. Will businesses be caught red-handed or simply caught up in red tape?