2012 London Games Spark UK Bribery Concerns

When nearly two million tourists and sports fans overtake London this summer for the Olympic Games, many of them will wine and dine at corporate hospitality suites. Some will even receive coveted tickets to sold-out events from vendors and business partners. The companies that provide all that hospitality must learn the ins and outs of the UK Bribery Act, which criminalizes gifts that are given with the intention of improperly influencing the recipient. If the British government determines that a company's Olympics hospitality package violated the Act, UK authorities can impose virtually unlimited fines and jail individual offenders for up to ten years.

The Act, which became effective in July 2011, covers UK-based firms and companies that conduct business in the UK. It prohibits individuals from promising or giving cash or in-kind contributions, such as tickets to the men's 100m final, with the intention of receiving improper special treatment from the beneficiary of the gift. The Act also prohibits passive bribery, which authorities describe as "agreeing to receive or accepting a financial or other advantage." Moreover, a company has strict liability under the Act for prohibited gifts given or received by employees and other associated persons.

The UK Ministry of Justice has provided guidance to help companies comply with the Act. The guidance specifies that hospitality and promotional gifts that are "reasonable and proportionate" are permissible if they are given with the intention of improving a company's image, highlighting its products and services or fostering strong business relationships.

Companies based in the U.S. and elsewhere that do business in the UK can avoid liability for the illegal acts of rogue employees by demonstrating that they undertook adequate measures, such as requiring employees to take anti-corruption training, to prevent illegal conduct under the Act.

Categories: International Compliance