New guidance on pending U.K.
bribery legislation has allayed some fears that the government would put a halt
to corporate hospitality and supplier payment for client travel. Complaints by
U.K. businesses about a lack of clarity as to acceptable business practices
delayed implementation of the Bribery Act 2010, passed by Parliament in April
2010 to take effect that October, first to April 2011 and then to July of this
year.
The Bribery Act brings the United
Kingdom into line with legislation in most other Western countries covering
relationships with foreign officials. However, it goes further than most by
also placing limits on dealings with private individuals. Of particular relevance
to the travel and meetings industry was uncertainty about client hospitality,
from entertaining at sports events to flying clients to conferences. One
U.K.-based travel management company told BTN that existing and prospective
clients had refused to attend a client case-study presentation and dinner in
London owing to uncertainty about whether the event would breach the new
legislation.
Such fears now look unfounded.
"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," according to a nine-page guide published this week by
the U.K. Ministry of Justice. "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."
A more detailed 45-page guide
published simultaneously by the ministry elaborates with an example.
"Flights and accommodation to allow foreign public officials to meet with
senior executives of a U.K. commercial organization in New York as a matter of
genuine mutual convenience, and some reasonable hospitality for the individual
and his or her partner, such as fine dining and attendance at a baseball match,
are facts that are, in themselves, unlikely to raise the necessary inferences
[of illegal inducement]," according to the guide. "However, if the
choice of New York as the most convenient venue was in doubt because the
organization's senior executives could easily have seen the official with all
the relevant documentation when they had visited the relevant country the
previous week, then the necessary inference might be raised."
Asked if the guidance effectively
lets travel and corporate hospitality off the hook, Peter Maher, a partner in
Deloitte's forensic and dispute services team, said: "That is largely
true, with a couple of significant caveats." One exception, he said, is
hospitality offered with an explicit statement of an expectation of something
in return for the supplier, and another is excessively lavish and irrelevant
entertainment, such as holidays. "The new guidance has made the position
an awful lot clearer," said Maher.