Olympic Hospitality and the Bribery Act

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The Olympic Games in London are an ideal opportunity for companies to entertain clients and contacts to build relationships and develop their businesses as are Wimbledon and international rugby and football matches, etc. There have been some concerns though about how appropriate it is to entertain in this manner following the implementation of the Bribery Act 2010. Ticket prices appear to be available for anything between £20 and £7,000 each. It is up to Companies to consider whether or not to entertain clients or accept an invitation to be entertained taking into account the individual circumstances. The Bribery Act defines a bribe as a “financial or other advantage” that is offered, promised or given to induce an individual to carry out an act improperly or to reward them for doing so. There are significant penalties for failing to comply with this Act but it was not designed to prevent corporate hospitality. If a Company invites a client to an event such as this with the aim of developing further their relationship with that client, then it would probably be okay. However, if the intention behind the invitation was to place the Company in a more favourable position with regard to a new contract that was in the offing, then it probably would not be legitimate. The nature of the hospitality must be proportionate. Companies should be encouraged to consider the following key questions before deciding whether or not to offer or accept an invitation to hospitality of this nature:
  • Is it sensible and proportionate to offer this client hospitality of this nature or to accept an invitation for hospitality?
  • Is the actual cost of the ticket appropriate to the relationship with the individual?
  • Consider whether the hospitality creates any expectation or puts the individual under any obligation.
  • Does the timing of the hospitality fall at a time when a new contract is being awarded which may be construed as an inducement to being given more favourable consideration?
  • How many times has the individual been invited or have you been invited by that Company to hospitality events?
  • Does the individual’s company have any rules and procedures relating to the acceptance of invitations of this nature?
Whatever you decide to do, make sure that any invitation or acceptance of an invitation is made in a completely open and transparent way. If any foreign officials are involved, be particularly careful as they are subject to more stringent regulations.

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