Posted: Tuesday, 26 April 2011 @ 11:18
Back in February I posted a blog introducing you to the Bribery Act and promised an update when further news was available.
The Ministry of Justice has now published its long awaited Guidance on the Act, and announced that the Act will come into force on 1 July 2011. It has also produced a very useful Quick Start Guide to the Act.
There were 2 big fears. The first, particulary for SMEs, was that here was another piece of legislation with a huge amount of red tape to burden their already overloaded companies. The second was that all the fun would go out of business, with corporate hospitality taking a big hit because of the possible accusation of bribery.
The Secretary of State for Justice, Kenneth Clarke, an experienced business man himself, has tried to allay those fears. In his introduction to the Guidance, he has acknowledged the fears and made it clear that the rules "are directed at making life difficult for the mavericks responsible for corruption, not unduly burdening the vast majority of decent, law -abiding firms". He goes on to say that "combating bribery is largely about common sense". He states that "no one wants to stop firms getting to know their clients by taking them to events like Wimbledon or the Grand Prix". He has provided the Quick Start Guide particularly aimed at small businesses.
The Quick Start Guide makes it clear that the "government does not intend that genuine hospitality or similar business expenditure that is reasonable and proportionate be caught by the Act".
I strongly recommend that all business owners should read the Guidance and the Quick Start Guide as a very minimum level of prepartion before the Act comes into force on 1 July 2011. They should document that they have done so. They should undertake a risk assessment, and again document it. This need not be an elaborate documnent. If you do not deal with foreign markets or foreign officials, then your risk profile is likely to be very small.
The Quick Start Guide covers much of what I discussed in my earlier blog, highlighting the 6 principles of proportionality, top level commitment, risk assessment, due diligence, communication, and monitoring and review.
The Guidance gives more detailed information, and 11 Case Studies which are very useful. Case Study 4 deals with hospitality and promtional expenditure, and gives a case scenario of a firm of engineers which holds an annual programme of events with entertainment, dining, and sporting occasions. The Case Study suggests ways to assess and minimise the risk of bribery.
I have been asked whether inducement payments will be caught by the Bribery Act. If they are transparent business to business arrangements for work introduction, then they do not amount to bribery. But if an individual is being given a secret benefit to introduce work, then that would fall foul of the anti-bribery measures.
The majority of SMEs will have little to fear from the Bribery Act, and will have only a small amount of work involved in a risk assessment and company policy document. But all businesses should make themselves fully aware of the new law and take appropriate action now.
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Blog by Nigel Musgrove
Nigel has been providing dispute resolution advice as a solicitor for over 35 years. As well as advising SMEs and business owners on disputes he also offers a specialist licensing law service. View profile
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