The modernised Bribery Act comes into force on 1 July, 2011.

On 1 July, 2011 the new Bribery Act modernises the law on bribery. This article aims to clarify the law and put your mind at ease that you won’t be prosecuted for buying a customer a Cornish pasty and a pint of Ruddles County, or inviting guests to a party.

The key things to remember about the new Bribery Act is that it only applies to you and people who work for you, not suppliers; there is a full defence if you can show that you have adequate procedures to prevent bribery; you don’t need to do anything if there is no opportunity for bribery to take place in your business; and hospitality is not prohibited – so you can’t get out of buying lunch or picking up the bar tab.

According to the Act, bribery is: giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having done so.  Your company could be liable if a senior person – or an employee or agent – pays a bribe specifically to get business, keep business or gain a business advantage.

You will not be prosecuted if you can show that you had ‘adequate procedures’ in place to prevent bribery. What counts as ‘adequate’ will depend on the risks your business faces. There are six things to consider when deciding what to do:

• Proportionality: Your actions should be proportional to the risk.  A big business, involved in large commercial contracts, might have to do more than a small business dealing with the public.
• Top level commitment: If you run your own business you need to take a lead.  Make it clear to everyone in the company that you will not tolerate bribery and getting involved yourself is setting the policy to avoid bribery risks.
• Risk assessment: Think about the risks that apply in your business and take particular care if you are starting a new contract or expanding into new business areas.
• Due Diligence: Make sure you know who’s working for you. Do a few checks before engaging others to work for you.
• Communication: Tell everyone in the company about your bribery policy and make sure they understand it.  Bigger companies might consider some formal training.
• Monitor and Review: Keep an eye on the risks you face as they may change over time.

If you only work in the UK the risk of bribery will be less than if you work overseas too.  You can assess the risk of bribery to your business by looking on the Internet for information about the culture of bribery in the country you are considering working or you could consult UK diplomatic posts or UK Trade and Investment for advice.

Although you might like to consult your legal advisers, the Act does not require external verification of any bribery prevention measures you have put in place.  So, no need to pay lawyers if you don’t want to.

Genuine hospitality and business expenses are unlikely to be covered by the act as long as they are proportionate. So, you can continue to take clients to dinner, provide tickets to sporting events, offer gifts to clients as a reflection of your good relations, or pay reasonable travel expenses to demonstrate your services to customers.

What you must not do is pay a bribe. Facilitation payments, as they are sometimes called, are payments to officials to perform routine functions that they are otherwise obliged to perform.  These are bribes and are not allowed.  You can, however, continue to pay for legally required administration fees or for fast-track services.  So Speedy Boarding on Easyjet is still OK.

For more information or to download a very useful ‘Quick Start Guide’ go to www.justice.gov.uk/guidance.