Your Questions: Answered - Written by on Saturday, May 26, 2012 0:30 - 0 Comments

Ask Barry & Richard: Can I take clients to the Olympics without violating the Bribery Act?

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Question:

I am worried that the Bribery Act prevents us from taking our contacts and clients to the Olympics.

Can I take clients to the Olympics without violating the Bribery Act?

Answer:

Yes.

There are two golden rules to remember and follow.

GOLDEN RULE 1: The Olympics are NOT illegal

First, there is absolutely nothing illegal in itself about taking clients and contacts to the Olympics.  We do not expect to see the Police arresting spectators at the Olympics. [Ed: if you do get arrested for Bribery at the Olympics phone our 24 hour helpline 0870 054 9994...we'll help to spring you]

The Olympics should be looked at in the same way as any other corporate hospitality.  The obvious difference is the price of tickets.

The Olympics happen every four years.  Olympics taking place in the UK may only happen once in a lifetime.  Against that back drop this years Olympics in the UK are a very special event for most.  Prices for tickets are expensive because they are such a rare commodity. This is economics in a market economy (even when in a double dip recession!).

GOLDEN RULE 2:  Follow the SFO rules!

Provided that you follow the guidelines which the SFO itself published here and which we have extracted again below (and we too carry on this website) then everything should be fine.

Enjoy.

THE SFO RULES

To help we have extracted what the SFO have to say about corporate hospitality again below:

“Gifts and hospitality

“Sensible and proportionate promotional entertainment expenditure is not an offence under the Act. However, when hospitality is done so that people will be induced to act in a certain way – when the expenditure is beyond what is sensible and proportionate, the relevant provisions of the act will be triggered.”

Chris Walker, SFO Policy, talking at the ICC conference, 15 February 2011.

What does the SFO consider to be sensible and proportionate corporate expenditure on gifts and hospitality?

When the SFO is considering whether any particular case of corporate expenditure appears to fall outside the bounds of reasonable and proportionate hospitality, it will be looking to see whether:

1. the company has issued a clear policy on gifts and hospitality;

2. the scale of the expenditure in question is within the limits set out in the policy and, if not, whether the person making it asked a senior colleague for special permission to make it;

3. the expenditure was proportionate (based on who received it)

4. there is evidence that the company recorded the expenditure;

5. the recipient was entitled to receive the hospitality under the law of the recipient’s country.

What’s the fine line between gifts and hospitality, and bribes?

Any inference that gift or hospitality expenditure was intended as a bribe would be strengthened if:

  • there was any unjustifiable ‘add-ons’, for example to travel or accommodation;
  • the expenditure is related in time to some actual or anticipated business with the recipient, particularly where some form of competitive process is involved.

As the Director of the SFO, Richard Alderman, said in his speech at Debevoise & Plimpton LLP on 21 June 2011:

“..what is sensible and proportionate will need to be judged by reference to who you are talking about and what is generally regarded as acceptable and safe practise. When we are talking about senior individuals in large pension funds or Sovereign Wealth Funds, then you would not expect to put them up at very modest hotels after travelling economy. It is not how it is done.

However, I would not expect you to agree that the individual should come for a month or a couple of months to stay at the most expensive hotel in London together with many members of their family and for all of them to be given large amounts of spending money to be used whilst they are in London.

I would not expect you also to arrange a business trip of a few days for these individuals, followed by a month at your private island somewhere, which has a warm climate and excellent golf and fishing.  These examples do not seem to me sensible and proportionate, particularly if shortly after the end of the hospitality, the official awards you a billion dollar contract. Indeed perhaps more importantly, I doubt very much if a jury of 12 ordinary people from the streets of London would regard it as being sensible and proportionate.”


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