"Be prepared, but don't panic" is the message being sent out to business by the Ministry of Justice in its long awaited guidance on the Bribery Act 2010.
The Act, which will come into force on 1st July 2011, simplifies and consolidates existing law on corruption and creates a new crime of failing to prevent bribery.
In simple terms, bribery is defined as giving or offering a person a financial or other advantage in order to induce them to act improperly. Receiving or requesting an inducement in return for acting improperly is also a crime.
When the Act was passed it caused quite a storm, with some commentators suggesting that it marked the end of corporate hospitality. The Guidance published by the Ministry of Justice on 1st April has allayed those fears, stating clearly that: "hospitality is not prohibited by the Act".
As well as clarifying that providing tickets to sporting events and taking clients to dinner are not criminal offences, as long as the gift is reasonable and proportionate, the Guidance points out that a prosecution under the Act can only be brought if the Director of Public Prosecutions or the Director of the Serious Fraud Office believes that the prosecution is in the public interest.
With the 2012 Olympics on the horizon, as well as the regular sporting season events, this has brought a sigh of relief from organisers as well as for businesses who host corporate entertainment.
The other area of controversy caused by the Act was the crime of failing to prevent bribery, which meant that a company could be guilty of a crime as a result of the actions of another person, who might not even be an employee.
Again, the MoJ's Guidance offers reassurance. Firstly, a company can only be guilty when an act of bribery is committed by another person if it does not have adequate anti-bribery measures in place. Secondly, the Guidance stresses proportionality: in the case of a small local business the risk of bribery is minimal and so the anti-bribery procedures will be minimal, while in the case of a large corporation tendering for defence contracts abroad, there is a higher risk of bribery and so the anti-bribery procedures must be very robust.
The Guidance provides advice on the factors that make for adequate anti-bribery measures:
- Commitment: A top-level commitment to create an anti-bribery culture in the company
- Risk assessment: a careful study of the markets in which the company does business
- Due diligence: a company must know its clients, know its employees and know its agents
- Communication: a company must ensure that its employees and agents know and understand the company's anti-bribery policies
- Monitoring and review: markets change and companies move into new markets. In either case the assessment of risk must be continual
Said Simon Wilson, corporate expert with Ward Gethin: "Businesses will welcome the plain-speaking guidelines now issued by the Ministry of Justice, but they cannot simply look at the MoJ's Guidance, breathe a sigh of relief, and ignore the Bribery Act.
"Every business, no matter how small, must carry out a risk assessment, review their standard terms for employees, and review induction procedures for new employees. If the risk assessment throws up any potential opportunities for bribery, employers should alert staff and make sure that they are on their guard. These steps should be recorded in writing."
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