On 1^st July 2011 the UK Bribery Act comes into effect – creating a new raft of criminal offences. Under the new act, corporate failure to prevent bribery on the part of any employee – including third party agents – will be punishable by significant fines and, potentially, jail sentences for directors and others.

Welcoming this Act, which replaces a mixture of antiquated legislation that has made it difficult to bring successful prosecutions, The Institute of Sales and Marketing Management (ISMM) – the UK’s association for sales professionals – is anxious to clarify the implications of the Act and dispel any ‘folk myths’ that surround it. Stephen Wright, the ISMM’s Commercial Director, explained: “Contrary to some people’s views, genuine business hospitality, or similar business expenditure, is neither against the letter nor the spirit of the Act.

“Nonetheless, we’re urging all Institute members – including those who feel that their business activities may have even a tangential relationship with this Act – to undertake compliance training as part of their continuing professional development (CPD) activities. If members of our Institute want some relevant courses and training providers, we can provide them with this information, on request.”

The Bribery Act creates four new offences:

• Offering or giving a bribe
• Requesting or accepting a bribe
• Bribing a foreign public official
• Failure by an organisation to prevent bribery

The Act covers all UK individuals and companies, whether their activities take place at home or abroad. Criminal penalties include unlimited fines and up to ten years imprisonment for individuals.

Companies found guilty may also be prevented from bidding on future public tenders. Bribery in both the public and private sector is covered by the Act and an offence may be committed regardless of whether the bribery is ‘direct’ or carried out via an agent or other intermediary.

The only way that an organisation can avoid prosecution is if it can show that it had ‘adequate procedures’ in place to prevent bribery. The Government has set out six guiding principles on the procedures that should be put in place:

• Create procedures that are proportionate to the size and nature of the business
• Ensure a clear commitment from the top of the organisation
• Assess the risks that you might face
• Know exactly who you are dealing with
• Communicate your policies and procedures to staff and business partners
• Make sure your procedures keep pace with changes

“We believe that it’s important for anyone in the public and private sectors to understand this new legislation,” Wright said. “Government guidance states that, ‘like all procedures, training should be proportionate to risk but some training is likely to be effective in firmly establishing an anti-bribery culture whatever the level of risk.’

“There are some simple measures that organisations can take to ensure that they comply with the new law – and we would encourage them to do so,” he added. “And, as a professional institute, we remain fully committed to give advice and guidance to our members as they operate within the law’s demands.”

Comment: With the increasing wealth of business-related legislation it may be difficult to feel much enthusiasm for this new Act. Yet we would all like to feel that we conduct our business on a fair and level playing field, where merit and competence – rather than any sordid, unscrupulous, nepotistic, dishonourable skulduggery – meet with the success that they deserve. So, if the Bribery Act can contribute to this process, long may it remain in force.