Business Law & Compliance

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Bribery Act delay: Good news for SMEs

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The Bribery Act, which was due to come into force this April, introduces the new offence of corporate failure to prevent bribery, which means that businesses now have to show they have “adequate processes” in place to prevent bribery, or face possible prosecution along with the individuals responsible for the bribe.

Although yesterday’s decision to take more time finalising the guidance does create a level of uncertainty for all businesses irrespective of size, it is important to understand that this delay is politically, and not legally, motivated.

For months now, the Coalition government has faced pressure from businesses to make the much-criticised Act and its rules “practical and comprehensive”. It has been suggested that the Act may have an anti-competitive effect in its current form and critics have underlined that clear guidance is needed on grey areas within the legislation, such as acceptable boundaries of corporate hospitality and gifts.

The reality of the situation for smaller businesses is that the impact assessment that accompanied the guidance on “adequate processes” did not envisage that SMEs would necessarily need to do much at all.

This assessment stressed that smaller companies may have more to do in relative terms if they do not have adequate procedures already in place to prevent bribery and they choose to put these procedures in place. But it also underlined that organisations can take a proportionate approach according to the perceived risk and stated that small and medium-sized enterprises should not take very long to familiarise themselves with the guidance.

The irony therefore, is that the longer the delay, the longer SMEs have to do little or nothing. This delay has been more about large corporates pushing for review and the political ramifications of the government being seen as failing to act.

Rupert Nevin is partner at law firm DWF.

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