The Bribery Act 2010: when does a gift or hospitality become a bribe?

The Bribery Act 2010 has been devised with the aim of reducing corruption and increasing transparency in business practices throughout the UK.

The Bribery Act creates four offences: two general offences -"active" and "passive" bribery - relating to the offering, promising or giving of an advantage, and requesting, agreeing to receive or accepting of an advantage; a further specific offence of bribing a foreign public official; and a wide-reaching "corporate offence" which would occur when a person associated with a business bribes another person for the benefit of that organisation.

In the latter situation there would be no need to show that there had been negligence or even involvement on the part of the organisation. The penalty for individuals who commit such offences may be a fine or jail for a period of up to ten years. Organisations found to have committed a corporate offence may be subject to unlimited fines.

The only defence available for organisations will be to demonstrate that they have devised "adequate procedures" to defend against bribery.

A particularly complex aspect of the new legislation is that certain types of corporate hospitality and gifts may be regarded as illegal bribes and thus constitute a corporate offence. The guidance available so far indicates that reasonable hospitality which forms a normal part of business deaings would not be an issue. However, more lavish hospitality directed at specific individuals in a way that could be interpreted as intending to influence them could present a problem.

Currently the government is devising guidance about procedures that commercial organisations can put in place to prevent bribery. In the meantime businesses are advised to start examining their potential risk in respect of practices that could be considered bribery prior to devising internal policies and practices that will amount to "adequate procedures". Training will also be needed at an appropriate stage to make sure all employees understand the scope and implications of this new legislation.

For further information please contact :

Caterina Iodice, Associate

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