BRIBERY Act could hit corporate hospitality bookings at the London 2012 Olympic games, despite assurances that it is not intended to target “genuine” hospitality.
In the long-awaited guidance to the Act, released yesterday after a delay of more than two months, the Ministry of Justice sought to reassure companies that “bona fide hospitality...is recognised as an established and important part of doing business”.
But with a single VIP hospitality package for 10 people to attend the Olympic opening ceremony running to more than £55,000, businesses are keen to err on the side of caution.
“Parliament would be advised to consider the content of the guidance which it issues in light of these concerns,” said Jonathan Walters, a partner in the sport group at law firm Charles Russell.
“It would be a great shame if companies were deterred from entertaining clients at the biggest sporting event to hit our shores since 1966 for these reasons.”
Justice minister Ken Clarke also backed up rumours that some foreign companies listed in London would be exempt from the Act, sparking concern that UK companies could be left at a competitive disadvantage.
“Mere listing on the London Stock Exchange, or just the fact of having a UK incorporated subsidiary, would not necessarily mean the act applies,” he said.
But while Clarke played down the Act’s overseas effect, the Serious Fraud Office – which will be responsible for enforcement – is keen to stress it will exercise a firm extraterritorial hand.
Speaking to a conference of Russian business leaders in mid-March, Serious Fraud Office director Richard Alderman said: “Do not be surprised if the SFO takes a wide view of this phrase so that we can ensure that the policy objective of ensuring competitiveness is complied with,” he said.
AT A GLANCE: THE BRIBERY ACT PRINCIPLES
The procedures that a company must have in place to prevent bribery should be proportionate to the risks it faces and to the nature, scale and complexity of its activities. This offers welcome respite to smaller companies that are less likely to take part in overseas transactions.
Leadership on preventing bribery must come from management, who should foster a culture within the organisation in which bribery is never acceptable.
Companies will be responsible for ongoing and in-depth risk assessment of its potential exposure to bribery, both internally and by people it’s associated with.
Companies will have to carry out stringent due diligence investigations into anyone they choose to do business with, or who will carry out business on their behalf, in order to mitigate the risk of bribery.
COMMUNICATION AND TRAINING
Businesses must make sure that all employees and associates are aware of the official bribery policy and procedures, and provide training on compliance where necessary.
MONITORING AND REVIEW
Procedures in place to prevent bribery must be constantly reviewed and improved where potential gaps are found.