SMEs Should Review Policies Ahead of Bribery Act
Small businesses should review their policies on expenses and client hospitality now, to avoid facing penalties when the Bribery Act comes in later this year, law firm Muckle LLP has warned.
The Ministry of Justice has announced that the Bribery Act, due to be introduced in April 2011, will be delayed. The government department said that guidance for businesses will be issued three months ahead of its implementation.
Under the Bribery Act, all businesses are required to have “adequate procedures” in place to prevent staff and anyone else who works on their behalf – such as agents – from giving or receiving bribes. Importantly, this includes anyone representing the business overseas.
For the first time, it will cover all private sector transactions, rather than just those involving public officials. If convicted under the Act, businesses risk an unlimited fine or even or a prison sentence.
Muckle LLP solicitor, Neville Takiar, said that businesses of all sizes need to be prepared for the Act, which is likely to be introduced this summer, as it will bring with it a “potentially enormous compliance challenge”.
“Small businesses need to implement adequate procedures to prevent and detect bribery, as they are equally at risk of falling foul of the new legislation as larger businesses. They should look where they are most exposed to bribery and review their internal processes to minimise those risks.”
“Risk areas for small firms tend to be around trading internationally, dealing with public officials, handling expenses claims and ensuring staff have clear guidelines on what they can and cannot accept when it comes to corporate gifts and hospitality.”
“If a firm’s people are ever accused of being involved in bribery, the firm needs to be able to demonstrate it has done all it could be reasonably expected to do to prevent or detect it. For example, firms should keep records of expenses paid and proof that the money was used for that purpose.”
In a statement, a Ministry of Justice spokesman said:
“We are working on the guidance to make it practical and comprehensive for business. We will come forward with further details in due course. The most important thing is to get it right.”