Clarke outlines Bribery Act

A SET of guidelines to help companies understand tough rules they will have to abide by under the new Bribery Act have been published.

The set of guidelines clarify what is and is not permitted in connection with things like gifts, payments and hospitality.

Justice secretary Kenneth Clarke has published the information on the legislation, which is designed to safeguard businesses from the threat of corruption.

The Bribery Act was originally set to come into force next week but has been postponed to July because companies were concerned about the rules for corporate entertaining.

Zia Ullah, Head of Compliance Advisory at law firm Pannone, said that the government’s exemption for small and medium-sized businesses, and an allowance that “proportionate expenditure” on corporate hospitality showed that the law was being applied with a “common-sense” approach.

“The sigh of relief in the corporate world will certainly be palpable given the confusing messages that were being circulated suggesting that even the most frugal of hospitality could have been interpreted as a bribe.

“Small businesses will be cheered by the news that they can potentially avoid implementing unnecessary controls, and the resultant costs, if they do not foresee a risk of bribery in their company.”

Stephen Brodie, an employment partner at Liverpool-based Brabners Chaffe Street, said the regulations were “more concise and practical” than had been mooted, but he said that businesses still needed to be wary of the use of facilitation payments to get their hands on goods which are being held in foreign jurisdictions.

“Businesses will still need to review their own portfolios to ensure their commercial activities as well as those of their business associates fall well within the remit of the guidance.”

Kevin Hills, a fraud investigation partner at Ernst & Young, said the new act “sets the right tone and provides clarifications and examples which will be welcomed by the business community”.

“Overall, the revised guidance sets out a more realistic approach. In providing examples of acceptable corporate hospitality which might surprise many observers, it should stop the scaremongering that the Act will see an end to normal, reasonable business entertaining.

“It also recognises that the problem of facilitation payments cannot be solved overnight and requires international effort.”