Corporate hospitality is OK says new Bribery Act guidance

The Bribery Act that came into effect on 1 July 2011 will not outlaw corporate hospitality luckily for businesses that need to use hospitality to maintain and develop working relationships to improve their business. The Act is clear that hospitality can be provided as long as it is reasonable and proportionate, so meeting clients and networking with other firms will not fall foul of the new Bribery rules explains Kim Jackson.

The Act states that “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,”

Justice secretary Ken Clarke is also on record as advising that “Cases will be brought where they are in the public interest, which will require the personal agreement of the Director of Public Prosecutions or the Director of the Serious Fraud Office.  I do not expect a large number of prosecutions and certainly not for trivial cases. The guidance makes it clear that no one is going to try to stop businesses getting to know their clients by taking them to events like Wimbledon, International Rugby events or the Grand Prix. Reasonable hospitality to meet, network and improve relationships with customers is a normal part of business.”

However the guidance does make it clear that companies are expected to be able to demonstrate that they have adequate procedures in position to prevent bribery taking place. Such procedures could include anti-bribery training for staff, risk assessments of the markets in which they are operating, and conducting due diligence on prospective business partners and customers.

But before you despair at more paperwork the guidance is clear that small organisations are unlikely to need procedures that are as extensive as those of a large multi-national organisation.  A very small business may be able to rely heavily on periodic oral briefings to communicate its policies while a large one may need to rely on extensive written communication.

For more advice and information please download our hsj Bribery Act helpsheet.