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Tickets to major sport events could constitute bribery, Collas Crill lawyer warns

September 2011

Companies planning to gift tickets to major sporting events, and clients - or potential clients - receiving them, may risk penalties of up to 10 years in prison and unlimited fines for bribery.

The potential penalties are due to the UK Bribery Act 2010, which came into force on 1 July this year and can affect companies and events around the world, such as this year's Rugby World Cup or the Olympics in 2012.

New Zealand-based journalist Michael Field of Fairfax Media reports that the Act is so hard-hitting that certain banks who treated civil servants to tickets to the NZ-hosted Rugby World Cup before the act was passed could potentially be prosecuted.

Collas Crill associate Katy Millington told Fairfax that Rugby World Cup or Olympic ticket gifts might amount to bribery.

"This law is the toughest that has been made anywhere in the world," she said.

The Act covers companies with a legal presence in the UK for any acts of bribery anywhere in the world. Companies can also be caught by bribery actions committed by employees for the employer's benefit who hold British passports.

The Act also creates a corporate offence of ''failing to prevent bribery'', which means directors of an offshore or international company that has a base in the UK could find themselves prosecuted for the actions of an employee in another country.

Katy Millington's advice to companies with UK connections is to develop and implement anti-bribery practices to protect themselves and their employees.

"The Bribery Act guidelines are not looking to penalise hospitality that is proportionate, reasonable and made in good faith," she said. "But if it is extravagant and intended to influence the receiver then there will be issues."

Explaining the New Zealand situation toFairfax, Ms Millington used a hypothetical "Kiwi Bird NZ Ltd.", with a London office, giving tickets to obtain more lucrative deals.

"This would clearly prima facie constitute bribery for the purposes of the Act, but in terms of the jurisdictional reach, Kiwi Bird NZ Ltd - and its directors - would be exposed to prosecution by virtue of having a significant business presence in theUK."

She said the Act does not criminalise bona fide hospitality and promotional expenditure and simply issuing a Rugby World Cup ticket may be acceptable.

"On the other end of the spectrum gifting the most expensive tickets to the RWC final to a client, their spouse and children, together with a suite at a five star hotel and dinner beforehand at a Michelin star restaurant will more than likely fall within the scope of the Act."

She said anything between the extremes will come down to what is proportionate and reasonable in the circumstances and particular industry.

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