What Ticket Shortage?
The discovery earlier in the year that a significant proportion of Olympic tickets ear-marked for corporate hospitality remained unsold was revealed with typical outraged zeal by certain sections of the British press 1. Other, more serious newspapers, looked to find answers as to why, given the clamour for tickets, hospitality bundles weren't selling. The Independent's conclusion: "thousands of the very best Olympics tickets and corporate hospitality packages remain unsold because companies are worried that lavishing so much money on clients will cause them to fall foul of the Bribery Act"2.
Could the slow uptake of corporate seats really be blamed on the fear of non-compliance with the Bribery Act? This article looks whether inviting guests to the Olympics could put companies in breach of the Act and considers what businesses can do to ensure their hospitality and promotional expenditure is legitimate.
The Scope of the Bribery Act
When the Bribery Act 2010 (the "Act") came into force on 1 July 2011, concerns were raised amongst commentators that due to the broadly drafted offences contained in the Act, providing and accepting corporate hospitality could be potentially illegal.
The Act creates the following offences:
active bribery3: where a person offers, promises or gives an advantage to another where that advantage is given in relation to the improper performance of a relevant function; passive bribery4: where a person requests, agrees to receive or accepts an advantage, and that advantage is taken in relation to the improper performance of a relevant function; bribery of foreign public officials5: where a person offers, promises or gives an advantage to a foreign public official with the intention to influence the performance of that official's functions to obtain a business advantage; and failure to prevent bribery6: where a person associated with a company bribes another person, intending to obtain a business advantage for the company; it will be a defence for the company to show that it had adequate procedures in place designed to prevent bribery. Under the Act, "improper performance" occurs where there is a breach of a an expectation that a function will be carried out in good faith or impartially, or that it will be performed in accordance with a position of trust.
Active and Passive Bribery
For corporate hospitality or other promotional expenditure to constitute an offence under section 1 of the Act, the...