Bribery Act
Bribery Act FAQs
Is corporate hospitality considered bribery under the Act ?
Whilst the Act recognises that corporate hospitality is part and parcel of the business world, excessively lavish hospitality could be considered bribery. The important thing is that the hospitality can be considered reasonable and proportionate to the situation.
Under Section 1 of the Act, corporate hospitality will be considered illegitimate where is intentionally used to “induce a person to perform their function improperly”.
In determining whether corporate hospitality is considered proportionate or not, three factors are looked at, including:
- “The level of hospitality offered”
- “The way in which it was provided”
- How important the person receiving the hospitality is in the business decision making process
My business is based outside of the UK. Does the Bribery Act still apply to my business?
Yes, even if your business is physically based outside of the UK, if you conduct business in the UK or other related activities, your business will be subject to the provisions of the Bribery Act. Whilst it is unclear as to how widely the Act will be interpreted by the Courts, businesses which have a subsidiary, agent on branch in the UK can expect to come under the Act.
Will business activities conducted outside of the UK be caught by the Act?
Yes, if you conduct part of your business in the UK, then activities conducted outside of the UK will also come under the Act.
Can a foreign parent company be held responsible for the actions of a subsidiary based in the UK?
This is tricky to answer simply. First of all, the subsidiary would have to be considered to be “carrying out a business” within the UK. Incorporation or listing on the stock exchange is not sufficient. The subsidiary must have a “demonstrable business presence” within the UK. Whether the foreign parent company will in turn be liable for the activities of the subsidiary depends on the degree of control the foreign parent company exercises over the subsidiary.
The issue is further elaborated on by section 7 of the Act:
- If the subsidiary is sufficiently “associated” with the foreign parent company they will come under the Act. Carrying out a service on behalf of the foreign parent company would constitute sufficient association.
- The Act of bribery must have been conducted by the subsidiary for the benefit of the foreign parent company i.e. to win business or some sort of competitive advantage.