Campaigners say the act 'creates loopholes for overseas bribes' but many firms welcome protection of corporate hospitality
Ministers have been accused of undermining the long delayed legislation intended to crack down on payments of bribes by business executives.
Anti-corruption campaigners claim the government has surrendered to lobbying by business groups, creating loopholes that will allow dishonest companies to continue paying bribes to foreign politicians and officials.
But firms have welcomed the Ministry of Justice's guidance, with many saying it has lifted the threat of corporate hospitality falling foul of the new regulations, which come into force in July.
The allegation of weakening the Bribery Act was denied by Ken Clarke, the justice secretary, who said the legislation would "reinforce Britain's reputation as a leader in the global fight against corruption".
In the past, Britain's reputation has been tarnished by its poor record in prosecuting only a handful of companies which have been caught paying bribes overseas in relation to land contracts. Most notoriously, Tony Blair's government halted a criminal investigation into claims that BAE, Britain's biggest arms firm, paid bribes to Saudi royals.
Issuing the guidance, he said: "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."
There is no exemption for "facilitation payments", deemed to amount to a bribe. Gifts or tickets to sporting events and dinners are permitted as reflecting "good relations" with clients.
No financial figure has been put on when a gift becomes a bribe.
"Everyone knows the difference between giving a customer a bottle of whisky at Christmas and giving him a five-star holiday so that they will continue to buy your products," Clarke said.
Michael Littlechild, director of the anti-corruption advisers GoodCorporation, said: "The guidance muddies the water by stating that spouses may accompany a business executive on a foreign visit to meet a prospective supplier. Most organisations stopped doing this long ago and would be surprised to see it permitted here."
Chandrashekhar Krishnan, director of Transparency International UK, said: "The Bribery Act, as passed by the last parliament, is one of the best anti-bribery laws in the world. But the guidance will achieve exactly the opposite of what is claimed for it. Parts of it read more like a guide on how to evade the act, than how to develop company procedures that will uphold it.
"It is deplorable that changes made to the draft guidance since late last year, and now enshrined in the published version, depart from international good practice in several areas.
"The Ministry of Justice has exceeded its brief with this final guidance which undermines the act and will limit its effectiveness. There is now a significant risk that bribery will go unpunished."
One of their concerns was Clarke's admission that foreign firms listed on the London Stock Exchange were unlikely to be prosecuted by the British authorities.
But Katja Hall, CBI chief policy director, said: "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."
Some legal specialists agreed that the guidance mitigated the impact of the act.
Jeremy Summers, a partner at Russell Jones & Walker, said: "Normal and legitimate hospitality will not engage the Bribery Act. It does appear that the government has listened to the concerns of business and tried to soften the more extreme ways in which the act potentially could have been enforced."
Others were less pleased. Louise Hodges, partner at the law firm Kingsley Napley, said: "Despite the MoJ's guidance recognising 'the problems that commercial organisations face in some parts of the world', the prosecutors' guidance makes clear that facilitation payments are not only illegal but may indicate premeditation, potentially inviting criminal prosecution."
The government has been promising since 1997 to implement a strong act that would stamp out the payment of overseas bribes by UK executives. That act was passed by parliament last April, but its implementation was delayed following protests from business groups.
Business lobbyists, led by John Cridland, director-general of the CBI, complained that the act was not "fit for purpose". They said that parts of the act were unclear and caused uncertainty over whether executives would be liable to be prosecuted.
Downing Street is understood to have been worried that the act could impose too much of a burden on businesses at a time of economic hardship.
Among the business groups lobbying Clarke over the hospitality issue was the Multinational Chairman's Group, a secretive body that includes the chiefs of Britain's most powerful corporations.