We have been hearing and reading a lot recently about bribery and corruption in sport – not least regarding the ‘beautiful game’ and the corruption allegations in FIFA. Unfortunately, this is a subject which will continue to dominate news stories and sports agenda in the foreseeable future.

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By Ian Blackshaw*

On 1 July, a new Act, the Bribery Act 2010, came into force in the United Kingdom, which is wide-reaching and tough. It will have important implications for the world of sport, especially in relation to the provision of corporate hospitality.

The new UK Act is considered as going far beyond the requirements of the US Foreign Corrupt Practices, which is regarded as a formidable measure designed to eradicate corruption from business and, to use the well-known sporting metaphor, provide ‘a level playing field’.

Extra-territorial
Like the US Act, the new UK Act is extra-territorial in scope and those involved in the promotion and commercialisation of sport at the international level need to bear its provisions in mind when developing, drafting and executing various sports marketing corporate arrangements and agreements.

The new UK Act creates a new corporate offence, which can only be countered by the commercial organisation concerned (as defined in the Act) showing that it has ‘adequate procedures’ in place to avoid the kind of bribery foreseen by the Act.

Clearly, those commercial organisations that already have such policy and operating procedures in place need to review them and ensure that they live up to the expectations and stringent requirements of the new UK Act.

A fortiori, those that do not have any at all had better 'get their act together' and introduce such procedures pretty quickly. Equally, the staff of such organisations need to be made fully aware of them and participate regularly in compliance training programmes. Such programmes also need to be fully documented.

Legal teeth
The Act has teeth: breaches of its provisions can lead to fines and/or imprisonment of up to ten years being imposed on offenders. In fact, these penalties are comparable with the heavy fines imposed by the US Authorities under the US Foreign Corrupt Practices Act.

The UK Ministry of Justice has issued some very helpful guidelines on the interpretation and application of the new measures. These are available at: www.justice.gov.uk/guidance/docs/bribery-act-2010-guidance.pdf. This guidance includes some useful and illustrative case studies showing how the Act is likely to operate in certain practical situations.

In the sports marketing context, the new UK Act is likely to be keenly felt in relation to corporate hospitality packages offered in connection with major sporting events, such as the FIFA World Cup. The provision of corporate hospitality on a lavish scale with expensive corporate souvenirs could constitute a bribe and fall foul of the new Act.

Reasonableness and proportionality are the order of the day. This is much easier to describe than to define!

Local customs
As Tom Beezer of the UK Law Firm Bond Pearce in a Client Briefing Paper of 7 July, 2010 has rightly pointed out:
"We don't want to scaremonger but lavish corporate hospitality could fall foul of the new legislation. That will not be taking someone for lunch down the road but perhaps more excessive hospitality like picking a client up in a private jet, wining and dining them with champagne and caviar en route to a sporting event overseas while spending a week in a six star hotel. Certain industries are more susceptible than others.
Different areas of the world may have a completely different view of how a relationship should be properly constructed and what is acceptable. Your overseas representatives, who may not be as aware of the UK legislation, might be doing something perfectly normal where they are based but the UK mother ship could fall foul of the Act.
Many UK companies with overseas operations are likely to be aware of the US Foreign Corrupt Practices Act (FCPA) but the new UK legislation goes further to cover the bribery, or attempted bribery, of individuals and companies as well as public officials and organisations. What is seen as acceptable and part of local custom in many parts of the world may be totally unacceptable under the new law."

You have been warned!

*Ian Blackshaw is an International Sports Lawyer and an Honorary Fellow of the TMC Asser Institute International Sports Law Centre