Bribery law may drive sponsors out of sport, says Formula 1 team

Fears: Team Lotus is the latest group to express its concerns to Ken Clarke
Craig Woodhouse12 April 2012

Anti-corruption laws risk driving vital sponsorship cash away from UK Formula 1 teams, motor racing fan Ken Clarke was warned today.

Team Lotus said supporters could take their money elsewhere amid fears the sport's corporate hospitality culture might fall foul of the Bribery Act.

At least two other British teams are known to be examining the impact of new rules on a motor racing industry worth £4 billion to the economy.

The Bribery Act, which was passed just before the general election, carries a maximum jail sentence of 10 years.

It creates two general offences of bribery, a specific offence of bribery of a foreign public official, and another offence of failure by a company to prevent a bribe being paid for or on its behalf. Team Lotus lawyer Jeremy Courtenay-Stamp said race tickets and entertainment packages — a key attraction for potential sponsors — could be viewed as a "currency of bribery".

"The sponsor may feel a little bit nervous about what they are doing in this area and cut back to the extent that they do not want to take people to races because it is deemed inappropriate'," he told the Standard.

"It will mean that much larger corporations will enter these kinds of agreements with a lot more thought and caution, and that will affect teams with a UK sponsor base."

Teams are already finding it hard to attract and retain sponsors, with a source at another leading team describing the current economic environment as "difficult". They are now stressing the networking opportunities provided by sponsorship packages, declaring the days of lavish "wine, women and song" entertaining to be "dead".

The warning is the latest to Justice Secretary Mr Clarke about the legislation, passed in the dying days of the Labour government, which comes into force in April. The Ministry of Justice has been urged to produce clearer guidelines on whether taking clients to sporting events could be classed as "facilitation payments" under the Bribery Act.

Mr Clarke himself enjoyed a three-night trip to the Singapore Grand Prix with his son in September 2008, including accommodation and hospitality provided by British American Tobacco, for which he was once a director. DaimlerChrysler paid for him and his wife to stay in Beijing and Moscow for meetings of its international advisory board in 2004 and 2005.

The former Chancellor has also faced calls to protect British businesses from inadvertently falling foul of the anti-corruption crackdown or losing out to foreign firms.

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