Corporate Hospitality and the Bribery Act
Published August 2010
The new Bribery Act, which is due to come into force later this year, will bring new risks and ethical issues for companies. For example, it will be an offence to give foreign public officials a bribe or other advantage in order to obtain or retain business.
As a result, companies will have to think carefully before offering corporate hospitality to foreign public officials, whether it be through tickets to sporting events or enabling them to fly abroad to visit the firm's offices.
While the government has pledged not to prosecute legitimate expenditure, companies will still leave themselves open to investigation or, at best, have to allow such expenditure to retain their competitive advantage, whilst knowing it is not technically legal.
Under the act, company directors or senior officers could be considered personally liable if it is deemed that they consented to any bribery. Conversely, the company can become criminally liable for failing to prevent bribery by any its employees, subsidiaries or foreign agents - even if the conduct is part of everyday business in the other country.
Firms can also face prosecution for any corruption which may have occurred previously, making extensive due diligence vital.
Despite penalties of up to 10 years in jail and unlimited fines for non-compliance, a recent survey by law firm Pannone showed that 52 percent of companies have still not reviewed their internal procedures.
