Businesses have just three months to ensure they comply with the Bribery Act, after Justice Secretary Ken Clarke today (30 March) announced that the UK's updated anti-corruption laws will come into force on 1 July.

The new guidelines issued earlier today confirm that a business can be held liable if a senior person within the organisation commits a bribery offence.

Organisations may also be liable for failing to prevent bribery conducted on their behalf, but only if the person committing the crime performs services connected with the business – this means companies are unlikely to face action because of the actions of suppliers.

Facilitation payments – where a third party pays a bribe either in the UK or overseas specifically to gain business – has also been confirmed as a bribery offence, although corporate hospitality is not prohibited under the Act.

The guidelines clarify the procedures a business should put in place in order to defend against a prosecution for bribery.

Clarke said: "Without changing the substance of the Act, this guidance should save organisations of all sizes from the fears sometimes aroused by the compliance industry that millions of pounds must be spent on new systems that, in my opinion, no honest business will require in response to the commencement of this Act.

"Some have asked whether business can afford this legislation – especially at a time of economic recovery. But the choice is a false one. We don't have to decide between tackling corruption and supporting growth. Addressing bribery is good for business because it creates the conditions for free markets to flourish."

The guidelines also state that, before a prosecution can be made, the Director of Public Prosecutions or the Director of the Serious Fraud Office must be satisfied that a conviction is more likely than not, and that it is in the public interest. Currently there are an estimated nine or 10 bribery prosecutions are carried out each year.

Baker & McKenzie financial services partner Ian Mason said: "The final guidance provides welcome clarification in areas such as corporate hospitality. Firms should feel more relaxed about taking clients to Wimbledon and similar events.

"However there will still be grey areas, and sensible judgement will need to be exercised in each case. The guidance does not provide complete certainty. Many corporates will still err on the side of caution, until the courts provide some case law."

The Act contains two general offences of bribery covering the offering, promising or giving of a bribe and the requesting, agreeing to receive or accept a bribe, with two further offences specifically addressing commercial bribery of bribing a foreign official and the offence of failing to prevent a bribe being paid.

Click here to download the Ministry of Justice's final guidance and click here for a quick start guide covering the main points.

Reaction from the profession

"The ultimate effect of the Act will depend on how it is interpreted by prosecutors and, ultimately, the courts and there remains a risk that they will take a stricter line on some issues like "associated persons" or the territorial scope of the Act. With just more than three months to go, businesses should now be focused on conducting a risk assessment, implementing proportionate policies and procedures, training their staff and getting reporting structures ready and implemented."
Sam Eastwood, head of the business ethics and anti-corruption group, Norton Rose

"Ken Clarke's assertion that bribery is one of those things 'we know when we see' fails to appreciate cultural differences. When you do business internationally, your idea of 'common sense' might radically differ from that of your local representative. The message is that companies need not worry about aggressive enforcement of the Bribery Act and, according to Clarke: 'I do not expect a large number of prosecutions.' That is good news for the majority of decent companies that do not pay bribes. But arguably it is also good news for that minority of companies that do pay bribes."
Liz David-Barrett, research fellow, Oxford University Centre for Corporate Reputation

"The guidance provides a welcome dose of common sense. The Act is not intended to subvert normal business interaction and this is now much clearer. The focus on proportionate compliance procedures may help save costs for some businesses and foreign companies will be assured that they will not fall within the clutches of the UK regulator unless they have a demonstrable business presence."
Satindar Dogra, litigation partner, Linklaters

"It doesn't answer all the difficult issues and in one sense never could. Deciding on what is legitimate business conduct and what is intended to corrupt, requires individual judgements. Overall though, the guidance now gives companies a good basis from which to prepare for the Act."
Charles Mayo, corporate partner, Simmons & Simmons

"The Act is tough and it is important that prosecutors exercise their discretion in enforcing it as the guidance recognises. Pursuing trivial allegations will not be in the public interest especially where companies have been proactive in anti bribery measures and have cooperated to remedy problems."
Robert Wardle, consultant, DLA Piper, and former head of Serious Fraud Office

"It is clear that the Government has taken account of the comments made by business through the consultation process, even if business has not got everything it wanted. In launching the guidance, Ken Clarke has made it clear that although the Act sets out tough new rules, avoiding bribery is about common sense not bureaucracy."
Geoff Nicholas, co-head of global investigations practice, Freshfields Bruckhaus Deringer

"In relation to extra-territorial reach, the new guidance signals significant 'rowing back' from some of the more aggressive statements made in recent months by one or more of the senior officers at the Serious Fraud Office. What now comes over very clearly is the need for a risk-based approach to managing corruption risk and for procedures that are put in place to be proportionate to the corruption risk faced by an organisation. It's good news to see that the need for proportionate procedures is now introduced as a new first principle."
Andrew Legg, litigation partner, Mayer Brown

"Businesses will still clearly need to conduct their own assessments of the bribery and corruption risks faced by their operations and draw their own conclusions as to what policy and procedural enhancements might be required to address those risks. It is now more important than ever that companies ensure they have a robust risk assessment process in place and that any policy or procedural enhancements have been properly identified and implemented."
Kirsty Searles, anti-bribery and corruption control partner, Deloitte

"We strongly support the principles behind the Bribery Act and welcome this much-improved final guidance. The Government has listened to concerns that honest companies could have been unwittingly caught out by poorly-drafted legislation and has clarified a number of important areas. These include the extent of liability through the supply chain, joint ventures, due diligence and corporate hospitality."
Katja Hall, chief policy director, Confederation of British Industry

• For more, see The Bribery Act delayed: a victory that will soon pass