POSTED: March 15th 2011
InDepth
Bribery Act need not scare companies from hospitality at London Olympics
KEIR RADNEDGE / Sports Features Communications
LONDON, Mar 14: Companies looking towards the 2012 Olympic Games in London – and other major sports events – are also looking now with particular awareness at the implications of the new Bribery Act.
It could impact upon a broad range of businesses which entertain current and prospective clients through corporate sport hospitality.
The Serious Fraud Office has indicated that common sense should be sufficient in order to not come under fire. However many companies are wondering whether to steer clear of London 2012 altogether after computing the likely costs of hospitality at the opening or closing ceremonies.
One ticket will cost £4,500 but they can be bought only in blocks of 10. That adds up to a minimum of £45,000, many times behind a handful of tickets to a rugby match.
Application of the controversial Act has been delayed until later this year but for Jonathan Walters, a solicitor in the sports law team at Charles Russell LLP, the most crucial question remained unanswered: “At what point does corporate hospitality become illegal bribery?”
Confusing results
Walters adds: “In their preparatory work on the subject, the Law Commission tried to distinguish between what hospitality was acceptable and what was not. The results were confusing and clumsy and were not taken forward into the legislation.
“Ultimately, comments coming from the corridors of power will do little to reassure hospitality providers that their businesses will survive under the new regime.
“It is hoped that the updated Government guidance will shed some light on this increasingly murky area. However, even with such guidance, this is still a grey area and it will be some time before businesses will feel comfortable with the new law.”
Accurate records
In the meantime, Charles Russell LLP has indicated a number of practical steps to keep clients the right side of an ‘adequate procedures’ defence:
1, Keep accurate records of all corporate hospitality events your business hosts or takes part in; these should include who attended, the nature of the event and reason for involvement;
2, Where possible, document the legitimate reasons for entertaining a client or contact – for example, as an expression of gratitude for previous business (not an inducement for future work);a regular review or ‘audit’ of hospitality on a monthly or quarterly basis, for example at monthly team meetings, will show a hands-on approach to monitoring activity;
3, Appoint a senior figure within the business to monitor and maintain the records; the Government has stressed the importance of ‘top level commitment’ in the prevention of bribery;
4, Although difficult at this stage, try to draw up a broad corporate hospitality policy for the business - setting out what is acceptable and the legitimate business aims the business hopes to achieve through its corporate hospitality programme;
5, Finally, keep eyes and ears open! This area of law is developing quickly and with no definitive timetable, so companies should keep up to date with any further developments and ensure they are in a position to act upon any guidance published by the Government.
Keywords · London 2012 · Charles L Russell · Walters
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