In the January edition of Middle East exchange, we explained the key provisions of the UK Bribery Act, which was then expected to come into force in April 2011. However, implementation was delayed due to the extensive debate among businesses in the UK and overseas concerning the far reaching and, in some cases, unclear meaning of the new law.

The UK government has now announced that the UK Bribery Act will come into force on 1 July 2011, and the Ministry of Justice has also issued final guidance on the "adequate procedures" required to be put in place to prevent bribery by persons associated with them. Companies now have three months to ensure their anti-corruption policies and procedures conform with the Act.

Extra-territorial reach

The Bribery Act will be of keen interest to businesses in the Middle East given its extra-territorial reach. The primary bribery offences apply to UK citizens and UK incorporated companies in relation to acts which take place anywhere in the world. In addition, the scope of the corporate offence is particularly wide: it applies to a company incorporated anywhere in the world which carries on business in the UK. The company will commit an offence if a third party with which it is associated bribes another person intending to obtain or retain business for the company, even where the bribe was paid and the benefit was intended to accrue outside of the UK.

Corporate entertainment

The corporate hospitality industry has been particularly concerned about the impact of the Act, fearing that any entertainment of public officials could be treated as an attempt to influence them to win business and, therefore, constitute a crime under the Act.

The Ministry of Justice has sought to reassure businesses, saying that "no one wants to stop firms getting to know their clients by taking them to events like Wimbledon or the Grand Prix". However, the guidance itself does little more than provide examples of types of hospitality which clearly will and will not be acceptable; it does not address the grey areas in between.