Corporate hospitality will be caught by new UK bribery legislation

It is often thought that despite its other ills, the UK at least remains relatively free from corruption. According to the international anti-corruption watchdog Transparency International, we should think again. The most recent Corruption Perceptions Index places the UK at an all time low of 17th in the league of least corrupt countries. Fines of £286 million meted out to BAE systems last week to settle an international corruption claim hardly help that perception.

But now the UK is taking steps to update its anti-corruption legislation in the form of the Bribery Bill.
Commercial organisations should take note.

1. The Bill replaces existing corruption offences which are presently found in a hotchpotch of case law and statute, much of it over a century old.

2. There will now be two general offences: offering, promising or giving an advantage (bribing) and; requesting and agreeing to receive or accepting an advantage (being bribed).

3. The offence will be based on an intention to induce improper conduct rather than the current basis of agent/principal.

4. Corporate Hospitality will be caught. In an explanatory letter the government has endeavoured to draw a line between “corporate hospitality for legitimate commercial purposes” (legal) and “obviously lavish or extraordinary hospitality” (illegal). It looks ok on paper but it will be more difficult to judge in practice – will it be lavish or extraordinary, for example, to entertain customers at the British Grand Prix, or Monaco, or Brazil?

5. And there is a new offence where a commercial organisation fails to prevent bribery. The organisation will face prosecution where one of its associates commits bribery to obtain business for it. There is one defence to the claim, which is where the organisation can prove on a balance of probabilities that it had in place adequate procedures designed to prevent its associates from engaging in bribery. This is bound to spawn a new industry in anti-corruption management techniques and corporate systems.

6. Perhaps the most controversial aspect of the Bill is a complete defence where the bribery was conducted by any law enforcement agency, the security services or the armed forces. This has given rise to two questions in the media: (1) are the ends worth the means? (2) why should such protection be given to those who receive bribes, rather than giving them? Expect some debate on this clause.