Described as obscure, complex, inconsistent and insufficiently comprehensive, the current law governing bribery has developed in a fragmented and ad hoc fashion over the last 120 years – but change is afoot. On 8th April 2010, the Bribery Act 2010 (‘the Act’) received Royal Assent and is expected to come into force in May 2011. The Act establishes four offences: bribing another person, accepting a bribe, bribing a foreign official, and failing to prevent a person from committing bribery on behalf of an organisation.

The first two of these offences (bribing another person, and, accepting a bribe) are general offences that prohibit a person from offering, promising, giving or receiving a financial or other advantage to induce or bring about the improper performance of a public or business function.

The third offence (bribing a foreign official) is narrower in scope and provides that an offence will be committed if a person gives a financial or other advantage to a foreign public official with the aim of influencing them to obtain or retain business.

Of most significance is the fourth offence, namely the new corporate criminal offence contained in section 7 of the Act. Section 7 says that an offence will be committed by any commercial organisation if an associated person (for example an employee, agent, distributor, subsidiary, supplier or contractor), who performs services for and on behalf of the organisation, bribes another person with the intention of obtaining or retaining business for that commercial organisation.

This new corporate offence is extremely wide reaching and will apply to all companies, partnerships and limited liability partnerships which carry on business, or part of their business, in the UK, irrespective of whether they were incorporated or established in the UK or elsewhere. A commercial organisation found guilty of the offence of bribery under section 7 of the Act will be liable for an unlimited fine, and the individual who committed bribery can be imprisoned for up to 10 years.

In its simplest form, an employee or agent of an organisation who pays a small bribe, for example, to facilitate the smooth passage of stock to the organisation’s distributors, will not only be committing an offence themselves, but will be holding out the commercial organisation as committing a criminal offence.

Of concern to the majority of commercial enterprises is the prospect that, under the Act, corporate hospitality and gifts may now amount to a bribe. If an invitation to a corporate event or acceptance of a gift affects, or is intended to affect, the outcome of a business transaction, the hospitality or gift could amount to a bribe.