Beware those bearing gifts!

If a bottle of 30 year old single malt whisky landed on your desk this Christmas, did you see it as a good will gesture from a grateful supplier or an act of bribery? And if a bottle is ok, what about that trip on Eurostar to see the rugby or a day out at Wimbledon? While these might seem like harmless freebies, come April they might seem like something very different says Alison Barr, a company law expert at Barr Ellison Solicitors.

April is when The Bribery Act 2010 comes into force. And while bribery to you might conjure up corrupt football officials and dodgy deals in far away countries, it’s coming to an office near you.  The Government says the new Act will provide a new, modern and comprehensive scheme of bribery offences that will create two general offences covering the ‘offering, promising or giving of an advantage, and requesting, agreeing to receive or accepting of an advantage’, with the intention that the recipient will be induced to perform “improperly”. It is the word ‘advantage’ that has drawn gift giving and corporate hospitality into the Act and  this is something that the Government acknowledges. But this is where it gets complicated. The Act isn’t stopping hospitality but is asking businesses to differentiate between “routine and inexpensive hospitality” (which is permitted) and “lavish or extraordinary hospitality” (which isn’t).  Not very helpfully, the Director of the Serious Fraud Office has said: “most routine and inexpensive hospitality would be unlikely to lead to a reasonable expectation of improper conduct”.  

So is a single bottle of whisky acceptable but a case not? If you’re an employer and you feel happy that you can differentiate between routine and extraordinary hospitality, can your staff or any consultant or agents you use do the same?  Because another part of the new law is that businesses will be prosecuted if anyone acting on their behalf or associated with them is involved in bribery, unless they have ‘adequate procedures’ in place to prevent bribery. That means everyone in your company and those who represent it knowing when a harmless gift becomes a bribe.

In a bid to help, the Government has come up with six principles for bribery prevention as part of the consultation process for the Act and will be issuing guidance early next year to assist businesses to put in place procedures that will instil a culture in which bribery is seen as unacceptable, will make clear what kind of hospitality and gift giving/accepting is acceptable and will catch out anyone flouting these procedures.

But whichever way you look at it, the onus is still on the employer, who is expected to use common sense to know what is the meaning behind that bottle of whisky and whether it should be enjoyed or reluctantly sent back whence it came.

The Bribery Act in full can be found at http://www.legislation.gov.uk

For further information, contact Alison Barr.

The information given in this article is of a general nature only and should not be considered as advice applicable to any particular situation for which specific request should be made to us.

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