Welcome Clarification On The Controversial Bribery Act

It was a very welcome sight to see The Bribery Act featuring on the front page of last week’s Financial Mail on Sunday. Journalist Dan Atkinson became our hero of the hour as he reported that the new head of the Serious Fraud Office (SFO), the government agency responsible for enforcing the act, has issued more clarification on the Bribery Act.

What the SFO had made clear from the start is the need for a commitment to adhere to The Bribery Act from the top-levels of the organisation down and for the corporate hospitality packages in question to be ‘proportionate’. It is however this ‘proportionate’ requirement which has confused many as the difficulty lies in determining where the line falls on proportionate hospitality

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Where does the line fall for proportionate hospitality?

However new head of the SFO David Green recently remarked the Serious Fraid Office is not the “Serious Champagne Office” and said they won’t be investigating items such as ‘tickets to Wimbledon or bottles of Champagne’. What does interest them is ‘hearing that a large company has mysteriously come second in bidding for a big contract’. This welcome clarification on the existing guidance from the Ministry of Justice which states:

‘Bona fide hospitality and promotional, or other business expenditure which seeks to improve the image of a commercial organisation, better to present products and services, or establish cordial relations, is recognised as an established and important part of doing business and it is not the intention of the Act to criminalise such behaviour’.

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Hospitality is a legitimate and effective tool for managing relationships

What is slight frustrating is that there’s been no actual legal change needed to The Bribery Act in terms of wording. This current stance has seemingly always been the case, however thanks to ambiguous wording there has been much uncertainty amongst corporate over what constitutes legal corporate hospitality packages. As a result we have seen clients of ours, who have been purchasing hospitality for years, decide not to repeat visit. We’ve also experienced several new clients enquire about hospitality only to later decide not to book over fears of falling foul of The Bribery Act.

We know many in the hospitality industry have spent valuable hours in seeking clarification on The Bribery Act both for themselves and clients. Much effort has been spent trying to provide clarification to a client that the law is not as drastic as it sounds but it’s extremely difficult to convince a client that a corporate hospitality packages is within the limits of the law without seeming pushy or ‘just after the sale’.

Hopefully the latest statements from David Green will help further clarify what’s acceptable, which includes major sporting events such as Wimbledon or Ascot. Just remember that if you’re unsure, there is no substitute for seeking legal clarification and communicating this clarification to all levels of your organisation. The SFO and Ministry of Justice have always asserted that the best defence for any organisation suspected of bribery is a set of clear procedures within the organisation to prevent any corrupt behaviour.

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