Bribery Act 2010 Update - New Guidance

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The UK Government issued its final form guidance on the Bribery Act 2010 (the “Act”) on 30 March 2011. The guidance is not binding on companies but it is intended to explain the scope of the Act and how businesses can establish “adequate procedures” to prevent bribery taking place. The guidance includes case studies and examples of what is, and is not, considered to be bribery ithin the Act. Separately, the UK prosecutor has issued guidance on how it will decide whether or not to prosecute companies and individuals who breach the Act. The Act will now come into force on 1 July 2011.

The guidance on the Act is reasonably helpful for businesses as it clarifies that unlawful activities undertaken by an overseas parent company will not necessarily trigger liability under the Act if it has a UK-based subsidiary. Companies who are listed on a UK exchange will not necessarily be sufficiently linked with the UK in relation to overseas activities. These were key areas of concern for companies following the draft guidance released in September of last year. The new guidance also clarifies that a reasonable level of corporate hospitality, such as tickets to sporting events, will not ordinarily create a liability under the Act. More lavish hospitality, such as expensed trips, could do so and would need to be assessed proportionately to the intended aim of the hospitality. A suggestion that the trips were intended to unduly influence the recipient, or someone linked to him, would be likely to create a risk for the company.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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