Will the UK Bribery Act affect you?
Last year bore witness to the first person being convicted and sentenced under the UK’s new Bribery Act. Charlotte Banks looks at the act and how it will affect the relationship between financial service businesses and the financial press
In November 2011, Munir Yakub Patel, a court clerk from Redbridge Magistrates’ Court, was jailed for six years for requesting and receiving a bribe intending to improperly perform his functions under Section 2 of the Act after he accepted £500 in exchange for not entering details of a speeding charge onto the court system, thereby influencing the course of criminal proceedings. Although admitting to one count of bribery, the prosecution believe he earned more by helping other offenders.
Whilst the above case is not directly linked to the financial services or media industries, the sentencing is a stark warning to those involved that the law has got a lot tougher.
So what exactly is the Bribery Act?
The 2010 UK Bribery Act came into effect on July 1st, 2011 as an attempt, by the coalition government, to clamp down on business corruption. Affecting individuals and companies, the Act states that it is a criminal offence for an individual to give or receive a bribe.
In its guide to the Bribery Act the Ministry of Justice describes bribery as:
‘Very generally, this is defined as giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so.’
Under the Act it is also an offence if a business is found to have failed to prevent bribery. If an individual is found guilty, as in the case above, they could face up to 10 years in prison and an unlimited fine. Companies can also face unlimited fines.
Having understood what the Bribery Act entails, the next question is how will this affect the relationship between financial service businesses and the financial press in terms of corporate hospitality?
In essence the Act shouldn’t bring about any big changes because corporate hospitality is not prohibited. Responding to whether businesses can provide hospitality the Ministry of Justice says:
“Yes. The Government does not intend that genuine hospitality or similar business expenditure that is reasonable and proportionate be caught by the Act, so you can continue to provide bona fide hospitality, promotional or other business expenditure.
“In any case where it was thought the hospitality was really a cover for bribing someone, the authorities would look at such things as the level of hospitality offered, the way in which it was provided and the level of influence the person receiving it had on the business decision in question.
“But, as a general proposition, hospitality or promotional expenditure which is proportionate and reasonable given the sort of business you do is very unlikely to engage the Act. So you can continue to provide tickets to sporting events, take clients to dinner, offer gifts to clients as a reflection of your good relations, or pay for reasonable travel expenses in order to demonstrate your goods or services to clients if that is reasonable and proportionate for your business.”
However, a number of publishing houses that MRM has spoken to say certain elements of their business will be affected and in preparation have set out guidelines for their journalists to follow such as recording all details of when gifts or corporate entertainment have been received.
Increased admin work aside the Act doesn’t look like it will have a huge effect on corporate hospitality at the moment. However it is something all journalists and companies should be aware of and bear in mind as part of their day-to-day job going forward.