Q&A: The Bribery Act and your business

The Bribery Act - which came into force on 1 July 2011 - made it necessary for small businesses to review their policies. Although it has most impact on businesses which trade overseas, it could mean you need to change the way you secure all your contracts and may affect corporate hospitality. Paul Ridehalgh (PR), partner at law firm Marsden Rawsthorn, explains what the Act means for small firms

What is the Bribery Act?

PR: “The Act replaced previous anti-corruption statute and common law — laws which were decided by judges based on the outcome of cases. The Act outlines four offences of bribery and introduced a new corporate offence of bribery, and at the same time made it easier to prosecute offenders.

“Guidance was published by the Ministry of Justice to help businesses of all sizes and sectors understand what procedures and policies they can put in place to prevent bribery, to understand the difference between bribery and hospitality, and avoid falling foul of the Act.”

How can I be sure we comply with the Bribery Act?

PR: “Firms should familiarise themselves with the Act so they understand what it means and what it entails.

“You will have to review what you do, who you’re working alongside, who you’re contracting with and how you’re maintaining those client relationships. You should also make your workforce aware of what is expected of them, by including it in your published policies.

"It will be a bit of a grey area for a while, until the courts start interpreting and applying the test."

Does the Bribery Act effect my firm?

PR: “All businesses are now required to have adequate procedures in place to prevent staff and anyone else who works on their behalf – such as agents – from giving or receiving bribes. Importantly, this includes anyone representing the business overseas.

"The question of whether you are effected by the Act will depend on what your firm does. If you do foreign business and large value contractual work requiring governmental consents then it will almost certainly have an effect on you. For firms dealing with consumers, such as retailers, it won’t have much effect at all.

“If you deal with foreign companies or officials in some countries, it was previously the norm to pay fees to facilitate what government officials should do anyway and to speed up the process — it wasn't even frowned upon. However, the Bribery Act now applies to UK firms which trade abroad which means that such facilitating payments are likely to be considered a bribe.

“For those that negotiate deals and contracts with other companies and government officials, you will need to ensure that your hospitality is proportionate. It will still be fine to take a client for a meal at the local restaurant, but disproportionately lavish gifts may be considered an offence under the new Act.”

• For more information on the Bribery Act, visit the Ministry of Justice website
• For more information on all aspects of the law and how it affects your business, visit Law Donut.

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