The Bribery Act is currently under review as part of the Government’s aim to reduce the regulatory burden on business and will introduce a new offence of failing to prevent bribery by individuals acting on behalf of an organisation. The law was intend to align Britain with the US Foreign and Corrupt Practices Act, but it has been argued that the government postponed its implementation after companies said the guidance on the new rules was unclear in areas including corporate hospitality. The serious criminal offences that the Act will introduce will affect businesses of all sizes and shapes, both private sector and public sector. Essentially, anyone carrying out an economic activity in the UK will be caught by the Act and a serious breach of the Act could result in a 10-year imprisonment and/or an unlimited fine and/or a prohibition from tendering for public contracts. The Ministry of Justice argues that the Bribery Act intends to “reform the criminal law to provide a new, modern and comprehensive scheme of bribery offences that will enable courts and prosecutors to respond more effectively to bribery at home or abroad.”

In a strong response to those who have criticised the Act, Prof. Mark Pieth, who heads the OECD’s working group on bribery in international business transactions, has said that a failure to implement will have the opposite effect: “This move will hurt the competitiveness of British industry at a moment when it is most vulnerable. Allowing companies to continue to generate business by bribery actually weakens their competitive clout as they become dependent on illegal means.”

The Act has the following aims, to:

• provide a more effective legal framework to combat bribery in the public or private sectors
• replace the fragmented and complex offences at common law and in the Prevention of Corruption Acts 1889-1916
• create two general offences covering the offering, promising or giving of an advantage, and requesting, agreeing to receive or accepting of an advantage
• create a discrete offence of bribery of a foreign public official
• create a new offence of failure by a commercial organisation to prevent a bribe being paid for or on its behalf (it will be a defence if the organisation has adequate procedures in place to prevent bribery)
• require the Secretary of State to publish guidance about procedures that relevant commercial organisations can put in place to prevent bribery on their behalf
• help tackle the threat that bribery poses to economic progress and development around the world.

The Bill was published in draft on 25 March 2009 for pre-legislative scrutiny by a Joint Committee of both Houses of Parliament. The Bill received Royal Assent on 8 April 2010.

Businesses and the public sector must now start to take care about corporate hospitality. Corporate ‘entertainment’ has become a commonplace part of most industries and is itself a large industry. People will have to be proportionate with the entertaining they do and judge circumstances carefully. Indeed, many public sector organisations and multi-national corporations already have policies on gifts and entertaining. The Serious Fraud Office guidance suggests businesses should have written policies to cover gifts, hospitality, facilitation payments, political contributions and lobbying activities. SMEs are therefore being encouraged to have “adequate procedures” in place to prevent bribery and corruption. For example, it is likely that, in any event, having a Bribery Act policy will be necessary when tendering for public sector contracts.

Furthermore, any dilution of the Bribery Act would be “bad” for Britain’s reputation as a centre for investment, according to some of the world’s largest institutional shareholders. In a recent letter, the International Corporate Governance Network, representing mainly institutional investors across 50 countries, has asked for reassurance that the act will be implemented. The warning comes after the implementation of the Bribery Act, passed by parliament last April, was delayed earlier this year.

Full details are available here. http://www.opsi.gov.uk/acts/acts2010/ukpga_20100023_en_1