Changes to the UK Bribery Act Pack Less Punch

To paint a clearer picture for companies, it’s presumed that the guidance will include concrete examples of what is and isn’t considered acceptable hospitality. Basically, any form of extravagant or unnecessary client treatment will be considered a no-no.

Posted by Joe Gerard in Ethics & Compliance on March 2nd, 2011

As many of you are aware, there has been some changes to the UK Bribery Act. I’m sure I’m not going to be the first, or last person to say this, but I’m a bit disappointed that lawmakers have caved in on some of the most hard hitting components of the Act. This Act was supposed to be groundbreaking – surpassing the toughness of the FCPA. Originally, I was impressed with the UK for sticking to their guns on the Bribery Act. The Act faced a fair share of criticism, but at the same time, was sending a message to all companies that bribery has got to come to an end. Business needs to be conducted in a fair manner.

According to the article “Government Relaxes Bribery Act,” from the UK news outlet, The Telegraph:

“New guidance on the ‘adequate procedures’ companies will have to adopt to avoid being prosecuted will make allowances for the use of so-called ‘facilitation payments’. It will also clarify how the law will view corporate hospitality and will give companies some protection against illegal acts committed by joint-venture (JV) partners. However, the guidance from the Ministry of Justice will take a tough line on acts of bribery performed by “associated persons” including contractors or sub-contractors.”

Corporate Hospitality

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Compliance with the Act has been a major concern for businesses since the very beginning. Apparently the amendments to the Act will be seen as more “business-friendly,” but will still pose difficulties for companies that are already tied up in joint ventures in the UK.  The Telegraph article (above) also mentions that the issue surrounding corporate hospitality has become a bit clearer under the new guidance, in which Jonathan Russell writes:

“On corporate hospitality, the guidance will spell out how normal hospitality, sporting events, lunches and dining out will not be encompassed by the new law. It will also give examples of how foreign trips to visit plants or factories will not be prosecuted. On the other end of the scale, the guidance will detail how paying for five-star hotels for clients or public officials where there is no clear business purpose could fall foul of the law.”

To paint a clearer picture for companies, it’s presumed that the guidance will include concrete examples of what is and isn’t considered acceptable hospitality. Basically, any form of extravagant or unnecessary client treatment will be considered a no-no.

Associated Persons

Guidance is yet to be officially released; however, multiple news reports claim that the Act will remain tough on the definition of who is considered an associated person. The Telegraph reports that the definition is broad on purpose, keeping companies on their toes to make sure bribery is discouraged at all levels. Companies will have to thoroughly evaluate sub-contractors and other third parties before engaging in business with them, to make sure they have also taken the necessary precautions to comply with the Bribery Act. I think that it’s necessary to keep this part of the Act strong, as it encourages stricter accountability. Companies can’t pass off wrongdoing and this part of the Act will hold them responsible for making better partnering decisions.

It will be interesting to see the final version of the guidance and what it will include.


Joe Gerard
Joe Gerard

CEO, i-Sight

Spend my days showing off the i-Sight investigative case management software and finding ways to help clients improve their investigations. Usually working with corporate security, HR & employee relations, compliance and legal teams.

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