The Bribery Act 2010 came into force on July 1, consolidating the previous common law provisions relating to bribery and corruption.
The scope of offences has now widened; prohibited conduct under the Act now involves offering a financial or other advantage to induce someone to do something improper or to reward them for having done so.
Obvious ways in which individuals and businesses can fall foul of the Act include bribing someone, accepting a bribe, bribing a foreign public official and failing to prevent bribery by someone performing services for, or acting on, its behalf.
Many businesses have expressed concern about whether gifts, hospitality, entertainment, charitable donations, sponsorship and publicity will fall foul of the new provisions in light of the wording of the Act.
Guidance issued in advance of the Act confirms that normal and appropriate hospitality, given and received, will not be a breach of the provisions.
The intention of providing such gifts, hospitality etc is imperative. If it is done with the aim of expecting that a person will not act in good faith, impartially, or in accordance with a position of trust, an offence is likely to have been committed.
The giving or receipt of such hospitality or gifts must not be made with the intention of influencing a third party to obtain or retain business or a business advantage, or to reward the provision or retention of business or a business advantage.
The relevant guidance gives an example of hosting an annual event for clients at a hotel in London with the intention of meeting them and forging better relations.
This is unlikely to be an attempt to induce them to perform their respective functions improperly, nor is celebrating the successful completion of a transaction with clients going to amount to rewarding improper conduct.
In addition to the guidance provided with The Bribery Act, the Serious Fraud Office has issued its stance on the use of corporate hospitality and gifts.
Just like the guidance, the SFO has stated that hospitality and promotional expenditure that is reasonable, proportionate and made in good faith is an established and important part of doing business and the Bribery Act does not seek to penalise it. Put simply, businesses must ensure that hospitality is proportionate and is not so lavish that it goes beyond the legitimate aims of building better relations or generally building profile and reputation.
Businesses are also advised to put a detailed anti corruption and bribery policy in place setting out what is and what is not acceptable corporate hospitality and providing a facility whereby concerns relating to suspected bribery can be raised.
It should be noted that individuals found guilty of an offence can be imprisoned for 10 years and an organisation found guilty can be subject to an unlimited fine and banned from tendering for public contracts.
There is a defence if the company can show it had adequate procedures in place designed to prevent bribery, which again highlights the need for a policy to be put in place which is communicated to all staff.