Following on from the Government's announcement yesterday that the new Bribery Act will come into play July 1 this year, only a mere three months away, it is now clear that all businesses trading in the UK must educate themselves on and understand the implications this will have on corporate hospitality during the London 2012 Olympics. We now also have additional guidance which is helpful, in as far as it goes, in understanding what kinds of entertainment and hospitality might fall foul of the Act.

From my point of view as a solicitor in the Sports Group at Charles Russell, I daily stay abreast of new developments in legislation that will ultimately affect the exploding sports business world and in this instance the use of corporate hospitality as an aid to securing new business opportunities.

Corporate hospitality at sporting events has become accepted as legitimate business practice. It is used as a means of entertaining clients and contacts, targeting new clients or as a part payment for goods or services in a mixed cash/value-in-kind deal. It plays a central role in the success for many businesses and will undoubtedly feature strongly in commercial strategies during the Olympics with so many sporting events on our doorstep.

It's fair to say that the Bribery Act was not conceived with typical corporate hospitality in mind. In simple terms, it is intended as a way to boost the UK's credentials in the fight against business corruption. However, there are legitimate concerns that sporting hospitality could now be viewed as "currency of bribery" under the legislation and therefore entertainment strategies will have to be reviewed to avoid prosecution.

The Government has said it does not intend "genuine hospitality" or similar business expenditure that was reasonable would be caught by the Act. Ken Clarke's statements and the guidance make this clear and there has certainly been a degree of scaremongering, possibly perpetuated by lawyers and compliance advisers.

However, to take an extreme example relating to the Olympics, when a single VIP package for 10 attending the opening ceremony at the Olympics, with a champagne dinner and reception, costs £55,000 exc. VAT, there must be concerns is £55,000 genuine hospitality? Those wishing to get the best seats at high-profile events can buy an 'A' package for £45,000 before VAT. The point is, looking to entertain clients at the Olympics is a far cry from the price of a ticket to a rugby match.

So far in fact that it is reported that many companies are steering clear of the Games to avoid any potential Bribery Act issues. If this is the case, it would be a great shame if companies were deterred from entertaining clients at the biggest sporting event to hit our shores since 1966 for these reasons.

The guidance to the Bribery Act helps clear up the picture somewhat. However, there is a lack of specific examples and the bottom line appears to be that logical common sense must rule as to what kind of hospitality is 'reasonable and proportionate'. During this window leading up to July it is going to be a golden period to try and educate employees as far as possible on what the Bribery Act is and what affect it will have on corporate hospitality practices.  At Charles Russell we feel that businesses need not panic, but should be pro-active in taking the legislation seriously and planning ahead.  Some quick fire steps include:

* Keep accurate records of all corporate hospitality events your business hosts or takes part in. These should include who attended, what the event was and the reason for your involvement.

* Where possible, document the legitimate reasons for entertaining a client or contact – for example, as an expression of gratitude for previous business (not an inducement for future work). A regular review or "audit" of hospitality on a monthly or quarterly basis, for example at monthly team meetings, will show a hands-on approach to monitoring activity.

* Appoint a senior figure within your business to monitor and maintain the records. The Government have stressed the importance of "top level commitment" in the prevention of bribery.

* Although difficult at this stage, try to draw up a broad corporate hospitality policy for your business setting out what is acceptable and the legitimate business aims the business hopes to achieve through its corporate hospitality programme.

* Finally, keep your eyes and ears open! This area of law is developing quickly and with no definitive timetable, so keep up to date with any further developments and ensure you are in a position to act upon any guidance published by the Government.

From my point of view the most crucial question still remains unanswered: "At what point does corporate hospitality become illegal bribery?"

So far official information distinguishing between what hospitality is acceptable and what is not is far from clear cut. Ultimately, comments coming from the corridors of power will do little to reassure corporate hospitality providers that their businesses will survive in this challenging economy under yet another testing new regime that takes time and dedication to comply with.

Jon Walters is a member of the Corporate Commercial team at Charles Russell specialising in sports law. He advises clients on a range of commercial rights and regulatory issues, including Nike, Mercedes GP Petronas F1 team andthe Welsh Rugby Union. Charles Russell are available for professional advice on the Bribery Act implications. For more details click here.