On 01 July 2011 the new Bribery Act finally came into force. Originally due to come into force in April 2010, the government delayed its implementation by 12 months to enable additional consultation to take place, it was then delayed a further three months due to pressure from businesses seeking to clarify the position concerning corporate hospitality. Now it is with us, and, carrying penalties of up to 10 years in prison and unlimited fines, the Act appears to have teeth.

There were considerable difficulties prosecuting the old offence of bribery as it was necessary to prove the involvement of a “controlling mind” of the company. This meant that prosecutions of companies were almost unheard of, which lead to the UK coming under increasing pressure to introduce a workable deterrent.

This new Act has far wider scope. Sections 1 and 2 create two general offences of offering promising or making a bribe, and requesting, agreeing to receive or receiving a bribe. Section 6 creates a specific offence of bribing a foreign public official, and section 7 creates a new offence for commercial organisations of failure to prevent a bribe being paid for or on its behalf.

The territorial extent of the offences have also increased considerably, covering offences taking place in the UK, as well as those taking place anywhere in the world but involving a close connection to the UK.

In relation to “facilitation payments”, a zero tolerance policy is going to be adopted. Some have warned that adopting this approach when such payments are an accepted and sometimes expected part of business in some international jurisdictions might place the UK at a distinct disadvantage in the international market. However, the SFO has reiterated its commitment to stamp out the practice.

And those client trips to Wimbledon? The government has sought to reassure businesses that genuine hospitality may continue provided that it is transparent, reasonable and proportionate.

So how can I protect my business?

The section 7 offence (failing to prevent bribery) carries an absolute defence of having “adequate procedures” in place to prevent bribery. All organisations should carry out a risk assessment to ascertain what procedures need to be put in place.

Partner and Head of the Compliance Department, Greg Tay-Lodge said “The Ministry of Justice and the Serious Fraud Office have both published guidelines that talk of vigorous enforcement and the robust approach that is to be taken, but they have also sought to temper this with talk of engagement with the corporate sector in tackling all questions of corruption. Quite how this will manifest itself, only time will tell.”