By Max Clarke

From the 1st July 2011, businesses across the UK will finally come under the remit of the new Bribery Act.

With just a few days to go until the changes come into effect, nearly three quarters of small businesses do not understand what the Act is or how it is likely to affect the way they do business, research from business software and services provider Sage has revealed.

The Sage UK Omnibus surveyed 1,050 small and medium sized enterprises (SMEs) from Sage’s 800,000 strong UK customer base. It found that while a third of businesses knew the Act was coming into force, most are uncertain how they should adapt to it, with 50% indicating that they will simply operate as usual.

One of the main concerns consistently highlighted by larger businesses about the Act has been that it will make UK firms less competitive on the international stage. For the overwhelming majority of SMEs, however, this does not seem to be an issue at all, with 94% believing that it will not make their business less competitive internationally.

The UK Bribery Act has been described as “the toughest anti-corruption legislation in the world.” The penalties for committing a crime under the Act are a maximum of ten years' imprisonment, along with an unlimited fine for individuals successfully prosecuted under the Act. Organisations can receive an unlimited fine and there is also the potential for the confiscation of property.

Samantha Bell, a Sage People Advice HR Adviser, has outlined several steps small businesses should consider to ensure they do not fall foul of the new measures. “The Bribery Act has seen the creation of four new criminal offences: being bribed, bribing another, bribing a foreign official and failing to prevent bribery. What you actually need to do in relation to the changes depends on your type of business and where you trade.

“If your business could be susceptible to potential acts of bribery, you should carry out a risk assessment and put strict policies and procedures in place to eliminate any doubt. But if it’s very unlikely that bribery could happen in your company, then drawing up and communicating one simple policy to your employees could be enough.

“The key thing is to be in a position where you can show you have taken adequate steps to prevent acts of bribery from taking place. If a bribery claim is made against you, doing this can make a real difference to your defence.

“An important point to keep in mind is that things like corporate hospitality aren’t affected by the Act, as long as they are proportionate and reasonable.

“Given the current economic climate and more general drive towards moderation and transparency in business, it is more likely that invitations for client hospitality might revolve around your local Peking Duck restaurant rather than the Fat Duck. But if you are in any doubt, just think ‘Is this reasonable and proportionate?’ That is the golden rule.”

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