‘Common sense’ Bribery Act explained

Posted on 30 Mar 2011 by The Manufacturer

Government today issued guidance on the upcoming Bribery Act, which will come into effect on July 1.

The Act was due to go live next week but the date has now been pushed back.

The guidance released today allays fears over prosecution under the Act for actions undertaken by suppliers and states that honest corporate hospitality will not be included as an offence.

Businesses will be able to claim a full defence for the act where it can prove it has provided adequate training and guidance to its employees against actions which are taken contrary to the Act. No external validation or accreditation is required.

Facilitation payments – those made to an official for an action he would already be obliged to make – will be a contravention of the Act.

Companies could face unlimited fines and directors and employees could face jail where the new legislation is breached.

Justice Secretary, Ken Clarke, said that the Act is “largely about common sense, not burdensome procedures.”

He said: “Without changing the substance of the Act, this guidance should save organisations of all sizes from the fears sometimes aroused by the compliance industry that millions of pounds must be spent on new systems that, in my opinion, no honest business will require in response to the commencement of this Act.

“Some have asked whether business can afford this legislation – especially at a time of economic recovery. But the choice is a false one. We don’t have to decide between tackling corruption and supporting growth. Addressing bribery is good for business because it creates the conditions for free markets to flourish.”

The Confederation of British Industry welcomed today’s guidance. Katja Hall, chief policy director, said: “The Government has listened to concerns that honest companies could have been unwittingly caught out by poorly-drafted legislation and has clarified a number of important areas. These include the extent of liability through the supply chain, joint ventures, due diligence and corporate hospitality.

“Businesses now need to use the next three months to revise their anti-bribery policies ready for the Act’s implementation. Meanwhile, the Serious Fraud Office must take a common-sense approach to enforcement, ensuring it is reasonable and risk-based. This will help avoid creating a culture of fear that could undermine UK competitiveness.”

The full guidance, along with a briefer ‘quick start’ document is available from justice.gov.uk.