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Small Businesses Safe in Bribery Act

Small Businesses Safe in Bribery Act

The government has announced that the Bribery Act will come into force on 1 July 2011.

The announcement by Justice Secretary, Ken Clarke, follows the decision in January to delay the implementation of the Bribery Act following criticism that the new law is neither clear nor workable, particularly for small and medium size businesses.

"The Ministry of Justice has sought to address these concerns by publishing a user-friendly seven page quick start guide to the Bribery Act and more detailed guidance on the 'adequate procedures' defence to the corporate offence of failing to prevent bribery," Richard Beavan, a partner in the Corporate team at Boodle Hatfield said.

"The Act has not changed at all; the new guidance simply addresses some of the misconceptions that surrounding the legislation."

There was concern that the Bribery Act would effectively make much corporate hospitality activity illegal.

"The new guidance should go quite some way to dispel this myth that corporate entertaining would no longer be allowed. The guidance is quite clear saying that as 'a general rule hospitality or promotional expenditure which is proportionate and reasonable given the sort of business you do is very unlikely to engage the Act'," Beavan said.

"The giving of tickets to sporting events, taking clients to dinner, offering gifts, or paying travelling expenses are all unlikely to fall foul of the Act. Businesses regularly engaged in this corporate entertaining should have nothing to fear."

The guidance also offers useful clarification on facilitation payments and the adequate defence procedures.

"Isolated incidents of paying officials small amounts of money to do something routine, such as stamping a passport, are unlikely to result in a prosecution. The guidance lists some practical steps SMEs can take to assess the bribery risks of, for example, expanding its sales into various emerging markets," Beavan continued.

"Most SME businesses will have nothing to worry about from this piece of legislation. The Act is really geared at larger businesses and those who consistently breach the rules."

The Government's guidance can be found at: http://www.justice.gov.uk/guidance/bribery.htm


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