The UK government has released guidance in preparation for the Bribery Act (the “Act”) coming into force on 1 July 2011. The guidance makes it clear that companies should adopt a risk-based and proportionate approach and address the concerns of the business community. Kenneth Clarke, the Lord Chancellor and Secretary of State for Justice, described the Act as “an important piece of legislation which seeks to tackle the scourge of bribery in international commerce.”

The guidance sets out six principles that all companies should use as a framework in order to ensure that “adequate procedures” have been taken: proportionate procedure, top level commitment, risk assessment, due diligence, communication (including training) and monitoring and review.

The guidance confirms that adequate bribery prevention procedures ought to be proportionate to the bribery risks faced, and that reasonable and proportionate corporate hospitality is not prohibited.

The guidance also provides clearer meaning to the definition of "associated person". Although the definition is deliberately broad, it will apply to supply chains, subsidiaries and joint ventures but within specific parameters. The exact scope of who is an “associated person” will still need to be decided by the courts, so some uncertainty remains.

The guidance also suggests that it is unlikely that a company that has no other connection with the UK other than being listed on the London Stock Exchange will be caught by the Act. The guidance contains a series of case studies designed to show appropriate responses. These include facilitation payment and corporate hospitality issues.

The Serious Fraud Office has also published its guidelines on the exercise of its prosecutorial discretion.