On 30 March 2011, the Ministry of Justice released its much anticipated guidance for commercial organisations on the Bribery Act. The Act is now due to enter force on 1 July 2011.

There has been much concern about the interpretation of the Act including relating to extra-territorial reach, corporate hospitality and facilitation payments. Encouragingly, the Guidance appears to be consistent with the message of the Serious Fraud Office that a proportionate and common sense approach would prevail. The following should be of particular interest:

  • clarification of what is necessary for foreign companies to be carrying on business in the UK and hence to come under the jurisdiction of the Act. For example, the mere presence of a subsidiary or listing of a foreign company's securities in the UK should not of themselves be sufficient (see paragraphs 34 to 36 of the Guidance);
  • the approach to what constitutes reasonable corporate entertainment (see paragraphs 26 to 32), including in respect of foreign public officials and who constitutes a foreign public official (see paragraphs 31 and 22 respectively). "Reasonable", "proportionate" and "transparent" should be the watchwords for companies;
  • facilitation payments remain, as they always were, prohibited. However, the UK Government recognizes the problems faced by companies and that such payments will not be eradicated overnight (see paragraphs 44 to 47).

Clearly the Guidance is not and is not intended to be fully comprehensive or prescriptive. Companies still need to assess their own corporate structures, risks and compliance procedures and would be wise to do so in the context of the "The Six Principles" set out in the Guidance (see pages 20 to 31 and the Case Studies). Questions will also remain until there has been interpretation of the Act by the Courts. However, the Guidance should provide law abiding companies with some relief and assistance.