Anti-bribery law poised to take the fizz out of corporate entertainment

BUSINESSES wishing to entertain their clients at sporting events such as the RBS Six Nations and London 2012 Olympics will have to navigate a "tricky" path through forthcoming anti-bribery legislation, law enforcers have admitted.

Complimentary tickets to the races, football and golf tournaments are a common part of doing business in the UK, but firms putting on hospitality in future will have to consult guidance to ensure they stay on the right side of the law.

Richard Alderman, director of the Serious Fraud Office (SFO), who will this week give a speech on his approach to the forthcoming Bribery Act in Aberdeen, warned that firms will have to review their corporate hospitality policies - particularly when it comes to major sporting events.

The SFO has no jurisdiction in Scotland, but lawyers say its guidance is likely to explain how firms north of the Border should comply with the law as the Crown Office and Procurator Fiscal Service has not issued any guidance.

The SFO will also play a part in prosecuting Scots firms which have operations south of the Border. It was involved in bringing the case against Glasgow-based Weir Group, which in December admitted paying kickbacks to Saddam Hussein's regime in order to nail lucrative contracts in Iraq.

The Bribery Act has caused an uproar in the private sector as it will severely tighten rules for corporate hospitality and so-called "facility payments" - where a company might offer money to secure a deal in cultures where such sweeteners are common practice.

The Act was last week delayed for the third time amid accusations that guidance issued by the Ministry of Justice was unclear.

However, firms are being warned not to rest on their laurels as they will only have three months after the final guidance is approved before the Act becomes enforceable.

Alderman told Scotland on Sunday that while his office intends to take a "sensible" approach to corporate hospitality, firms that want to comply with "ethical" business practices may wish to scrap corporate entertainment altogether.

"This is a tricky one," he admitted. "What we have said is sensible, proportionate hospitality and entertaining expenditure is perfectly lawful. It may be that when there are major sporting events we might need to issue some guidance on this. I know that ethical corporations have a variety of responses to this - and indeed some of them would not actually take people to some of those sporting events."

Tom Stocker, a specialist in business crime at law firm McGrigors, which is organising Wednesday's event, said energy companies are particularly concerned about the legislation as they could find themselves liable even if a joint venture partner or agent abroad commits an act deemed unlawful under UK law.

Business groups such as the CBI have warned the law could harm Britain's competitiveness as other countries, including the US, make allowances for facilitation payments.

But Alderman insisted that corporations which have already cracked down on such practices have found it beneficial. "They are finding that their people are often just waved through because it's known that there's no point asking for a payment … as they have a rigorous policy of not paying."