In response to calls from UK businesses to take a more
commercial approach to corporate hospitality so as not to put UK
businesses at a disadvantage, the Guidance expressly confirms that
the Government does not intend to prohibit UKDOCS/665518.13
reasonable and proportionate hospitality and promotional
expenditure. It also provides further examples of legitimate
conduct which should provide business with some reassurance.
Prosecutorial discretion will be key, with relevant considerations
including the lavishness of the hospitality in question, industry
norms, the connection between the hospitality and any legitimate
business activity, and concealment. The OECD has reportedly
criticised the UK Government's more business-friendly approach
to corporate hospitality in the Guidance.
By way of a short example, if a London-based private equity firm
is to host the visit of a CEO of a Middle Eastern sovereign wealth
fund, and buys tickets for the CEO to attend a football match,
accompanied by representatives of the firm, where business is also
discussed, this would beunlikely to present a problem. However, if
the firm also pays for the CEO's family to visit London,
finances associated activities and luxury accommodation, and
bestows lavish gifts on the CEO and his family, this would give
rise to material infringement risk. Commercial organisations should
therefore establish controls for the objective and neutral scrutiny
of corporate hospitality (whether by way of internal compliance
persons, audit or accounting) so that what is provided in each
individual case is pre-tested for reasonableness and overall
compliance with the Act.
The ramifications for those found to be in civil contempt (as presided over by the High Court), and, in particular, the court’s power to enforce such a finding against a contemnor who resides overseas, are more far reaching than many (civil) lawyers realise.
The Bribery Act has made the news again following the conviction of a would be taxi driver. Earlier this week, at Minshull Street Crown Court in Manchester, Mr Mawia Mushtaq became the second person convicted of an offence under the Bribery Act by attempting to bribe a Licensing Officer.
In the previous edition of Corporate Focus we reported that the Bribery Act 2010 (the Bribery Act) came into force on 1 July 2011 and we considered procedures that commercial organisations could put into place in order to prevent bribery.
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