Hospitality not a bribe - new guidance

Companies will be able to continue to offer corporate hospitality without falling foul of tough new anti-bribery legislation unless it is clearly intended to influence a decision.

New guidance to businesses on the Bribery Act, which is due to come into force on July 1st, states that it is not designed to curb hospitality.

The Ministry of Justice guidance says: “Bona fide hospitality and promotional, or other business expenditure which seeks to improve the image of a commercial organisation, better to present products and services, or establish cordial relations, is recognised as an established and important part of doing business and it is not the intention of the Act to criminalise such behaviour.

“The government does not intend for the act to prohibit reasonable and proportionate hospitality and promotional or other similar business expenditure intended for these purposes. It is, however, clear that hospitality and promotional or other similar business expenditure can be employed as bribes."

The guidance states that prosecutors will have to establish that the payment of the alleged bribe is linked to a specific decision by the person who has benefited from it. And it says that the level of hospitaility on offer will help to determine whether it counts as a bribe for the purposes of the legislation.

The guidance suggests that businesses should review their anti-bribery policies to ensure that they comply with the act.

Justice secretary Ken Clarke, said: 'Without changing the substance of the Act, this guidance should save organisations of all sizes from the fears sometimes aroused by the compliance industry that millions of pounds must be spent on new systems that, in my opinion, no honest business will require in response to the commencement of this act.

'Some have asked whether business can afford this legislation – especially at a time of economic recovery. But the choice is a false one. We don’t have to decide between tackling corruption and supporting growth. Addressing bribery is good for business because it creates the conditions for free markets to flourish.'