Under the new Bribery Act, which comes into force next April, firms face prosecution if they are deemed to have crossed the line, warned Eversheds partner Ben Bruton, who was speaking at a food and drink seminar organised by the law firm in London last week.
“This is probably one of the most significant pieces of legislation in the past 10 years. Awareness is growing in the food sector but firms need to make sure they have adequate procedures in place to prevent bribery."
A clear code of practice on corporate hospitality was a good starting point, he said, but training was also vital.
"This is not meant to spell the end of corporate hospitality, and I think a certain element of common sense is likely to apply. But there is a difference between taking a supermarket buyer to the cricket and paying for his whole family to go on a two-week holiday.
"That said, there is no lower threshold in financial terms, so even a very small payment could still constitute bribery if it is not being paid for a legitimate purpose."
However, there were likely to be grey areas as the Act was principles-based rather than overly prescriptive, he said.
"It is actualy quite difficult to say this constitutes bribery and this doesn't. A lot depends on the nature of your business and your industry."
Serious Fraud Office
Bruton said the Serious Fraud Office (SFO) was keen to make businesses aware of issues the Act raised, such as the offence of “failure to prevent an offence”. Scarily, this would apply to the business activities of a firm’s overseas affiliates as much as it does to its UK operations, he said.
Key offences contained in the Act are: active bribery, passive bribery and bribing of a foreign public. However, it was the offence of a commercial organisation failing to prevent active bribery by employees, agents or subsidiaries, that most concerned firms from international food companies or the subsidiaries of overseas parents over which they exercised little control.
“It can escalate up to the parent company,” warned Bruton.
The SFO would be looking for a high profile scalp on the failure to prevent an offence category, predicted Bruton. “This is a new weapon of choice for prosecutors. They will be looking for a company that hasn’t instilled a culture of anti-corruption.”
Bruton stressed that the Act didn’t only cover overseas trading, but all trading, and not just of bribery of public officials.
The SFO accepted that common sense should prevail, remarked Bruton, but it was clear also that “turning a blind eye” when colleagues shared information about bribes from suppliers, for example, “would cause problems and senior managers could go to prison”.