Thursday, 31 March 2011

UK Bribery Act - Ministry of Justice Publishes Guidance

Implementation of the Bribery Act 2010 was delayed from April 2011 as a result of concern that it was unclear and onerous but it will now commence on 1 July 2011. The updated Guidance note from the Ministry of Justice was released yesterday.
Justice Secretary, Kenneth Clarke, said:
'I have listened carefully to business representatives to ensure the Bribery Act is implemented fully and in a workable, commonsense way – this is particularly important for small firms that have limited resources. I hope this guidance shows that combating the risks of bribery is largely about common sense, not burdensome procedures. 
 Hmmm. The main change from the previous guidance is that there is a surrounding appeal to common sense. That is welcome and, as long as the courts follow that in practice, is good news. The guidance emphasises that onerous bureaucratic procedures to document activities to demonstrate compliance are not really necessary. Which may prove to be bad news for the consultants, accountants and lawyers intent on making their fortunes from giving unnecessary advice on the legislation to companies and persuading them to introduce unnecessary systems.

The MoJ repeats that proportionate corporate entertainment will not be illegal. It opens up the idea that companies that list in the UK but have no activities here will not be caught. It suggests that foreign subsidiaries may be deemed to make their own decisions.

However, the key point remains that interpretation of the Act will depend upon the courts. Will they apply common sense? We will see what happens in practice.

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