The Bribery Act 2010 comes into force today (it’s dated ‘2010’ rather than ‘2011’ because the Bill received Royal Assent last year).  You can read the full text here.

There’s been a lot of press coverage about the new law, most of it focused (rather unhelpfully) on the supposed threat to corporate hospitality and the various delays which at one point put the UK at risk of an export blacklist alongside the likes of Nigeria and Russia. It’s also been criticised for putting UK companies at a competitive disadvantage. In fact, the rules simply fulfil the UK’s obligation as a signatory to the OECD Anti-Bribery Convention (which you can access here).

Here is my ‘all-you-need-to-know-about-the-new-law’ guide, in five simple bullets.

1. •Corporate hospitality has not been banned. Guidance on the Act makes it clear that “reasonable and proportionate” hospitality given in “good faith” will still be permitted, and so the vast majority will come nowhere near crossing the line into bribery. Only where hospitality is such as to infer an intention to influence a decision maker improperly would it fall foul of the new rules.
   

1. •The definition of bribery is deliberately broad. It covers anything which seeks to influence a decision maker by going beyond legitimate parameters for obtaining or retaining business. There are four offences: (1) bribing another person; (2) being bribed onesself; (3) bribing a foreign public official; and (4) f0r commercial organisations, failing to prevent bribery.
   

1. •The first three offences apply to individuals and to corporate bodies if a director, partner or similar senior official consents to or connives in the bribe.
   

1. •The fourth offence - failing to prevent - will be the key area for most UK companies because it makes employers liable for acts of bribery by employees, agents and other representatives, whether here or overseas. Significantly, the Serious Fraud Office will not have to prove intent by directors, but simply that fraud has been committed. As well as unlimited fines, companies found guilty may be disbarred from tendering for public contracts in the EU. The only defence is to show that “adequate procedures” have been implemented.
   

1. •Guidance on what “adequate procedures” means was published in March. It’s worth taking the time to read the guidance, which you can download here. The overriding principle is that procedures should be tailored to the risks of corruption applying to each organisation and its work. So, where the risks are minimal there is no need for complex or burdensome red tape. The guidance sets out 11 case studies, each based on six principles:
   

2. -internal and external assessment of risk;
   

3. -proportionality (by reference to risk but also to the size and complexity of the organisation);
   

4. -board-level commitment and zero-tolerance;
   

5. -due diligence (on parties performing services for or on behalf of an organisation);
   

6. -communication (of procedures, but also in relation to providing the means for whistle-blowing or ‘speak-up’ by staff); and
   

7. -monitoring and review (to maintain effective implementation).
   

The Bribery Act is important because the penalties can be severe - an unlimited fine and 10 years imprisonment - but it needn’t become a corporate headache if organisations take the trouble to implement appropriate compliance measures.