Bribery
is the act of offering, promising or giving a financial or other benefits to
another directly or indirectly, with the aim of inducing or motivating a person
to perform improperly a relevant activity. It covers actions undertaken on the
knowledge and belief that the acceptance of the benefit will by itself
constitute the improper discharge of a relevant function.
The
Bribery Act 2010 (the Act) came into force on 1 July 2011. Prior to this Act -
the Public Body Corrupt Practices Act 1889, the Prevention of Corruption Act
1906 and Prevention of Corruption Act 1916 (collectively "The Prevention
of Corruption Acts") were in force, which although now have been repealed
but will still apply to offences committed prior to 1 July 2011.
There
are four prime offences under the Act; pertaining to the offering, promising or
giving of an advantage (the ‘active
offence’), and requesting, agreeing to receive or accepting of an
advantage (the ‘passive offence’);
a discrete public offence of bribery of a foreign public official and a
corporate offence for failure to prevent bribery.
The
Bribery Act 2010 intends to reverse a corporate culture that in some
areas, may have become tolerant of corruption. However the companies prosecuted
or in order to escape prosecution the companies can defend themselves by
proving that they had "adequate procedures" to prevent corruption, in
place.
Act
also does not distinguish between bribes that are offered directly or
indirectly or bribes offered in private or public sphere. It does not matter
whether a bribe is offered to the same person who is to perform the function
nor does it matter if the advantage is offered or given through a third party,
as such payments will still fall within the scope of the Act. It also does not
matter whether the person has knowledge or reasons to believe that the
performance of the function or activity is improper.
The
Serious Fraud Offence (SFO) in UK is the prosecuting body for the bribery
offences. The SFO has a twofold approach on prosecution:
1. They
want to be able to help and support the very many ethical corporations who are
determined to have an anti-corruption culture in their organisations. The SFO
can advise them on their approach to an anti-corruption culture and their
internal procedures. They also recognise the ethical business difficulties and
find satisfactory, sensible and commercial solutions to such problems and
enable the ethical corporate to put the past behind it and to move on.
2. They
also come down very vigorously on those corporations who want to continue to
behave corruptly, and indeed see such behaviour as enabling them to gain a
business benefit.
UK
is committed to abide by Article 5 of the OECD Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions:
"Investigation
and prosecution of the bribery of a foreign public official ... shall not be
influenced by considerations of national economic interest, the potential
effect upon relations with another State or the identity of the natural or
legal persons involved."
Bribery
is a serious offence. There is an inherent public interest in bribery being
prosecuted. Prosecutors will make their
decisions in accordance with the Full Code Test as set out in the Code for
Crown Prosecutors.
It has two stages:
(i) the evidence stage; and
(ii) the
public interest stage.
The evidence stage must be considered before the
public interest stage. A case which does not pass the evidence stage will not
proceed, no matter how serious or sensitive it may be. Where there is
sufficient evidence to justify a prosecution, prosecutors must always go on to
consider whether a prosecution is required in the public interest. Assessing
the public interest is the most important and perhaps the toughest task. Each
case is rigorously considered on its own facts and merits in accordance with
the Code.
The
SFO encourages corporate self-reporting, but does not offer any guarantee that
a prosecution will not follow any such report.
The
2010 Act is a great improvement on previous legislation. However, areas of
uncertainty and therefore concern exist over the exercise of prosecutorial
discretion, as applied in each individual case. This is particularly in
relation to corporate hospitality and facilitation payments where the words of
the statute appear draconian but where guidance issued by the Ministry of
Justice and prosecuting agencies suggests that there is scope for latitude.
A Facilitation Payment is
a type of bribe and should be seen as such. A common example is where a
government official is given money or goods to perform (or speed up the
performance of) an existing duty. Facilitation payments under the Bribery Act
are illegal, regardless of their size or frequency, unless payments are
permitted or required by the written law of the relevant country, they are
prohibited.
However,
they have caused controversy for two reasons. First, they are lawful under the
Foreign Corrupt Practices Act 1977, the American counterpart to the 2010 Act.
Secondly, many companies have argued that such payments are so ingrained in
some cultures that without them, business in those countries will become
virtually impossible. Thus the 2010 Act will serve to constrain British
businesses at a time of economic difficulty. However, in recognition of these
difficulties, the Guidance suggests that only more serious cases of
facilitation payments will be prosecuted.
It
is difficult to see what weight this guidance can have. The joint guidance
issued by the Director of Public Prosecutions and the Director of the SFO (‘the
Directors' Guidance’) sets out the factors that may influence whether or not a
prosecution is brought. Those in favour include:
(i)
Large or repeated payments;
(ii) payments made as a standard way of conducting business
(evidence of premeditation);
(iii) active
corruption of the official;
(iv) the
fact an individual has failed to follow the anti-bribery procedures which apply
to him/her.
Bona-fide hospitality or
promotional or other legitimate business expenditure is
recognised as an established and important part of doing business. It is also
the case, however, that bribes are sometimes disguised as legitimate business
expenditure.
The
position regarding corporate hospitality is even less clear. Again, the
ambiguity comes not from the wording of the statute, but rather an apparent
attempt by the Government to read down its provisions. According to the words
of the 2010 Act, any advantage, financial or otherwise, conferred upon another
individual with the intention of inducing improper performance of a function or
activity (or where a foreign public official is involved, simply influencing
that person in the course of their employment or official role) can fall foul
of the 2010 Act.
There
is the well-documented problem of doing business in parts of the world where
corruption is endemic, and where the choice is between risking prosecution and
doing no business at all. At a time when business opportunities are limited,
this is an extra inhibition to creating successful companies. When is a
facilitation payment a bribe, and when is it a necessary and proper step on the
road towards obtaining a contract? This is not in any way to decry the work of
Transparency International and other similar organisations, or of the Serious
Fraud Office, in seeking to clean up the operations of developed countries in
their relations with emerging economies.
Lastly,
despite the Guidance, whether or not corporate hospitality has gone beyond that
which is reasonable or proportionate in the circumstances is ultimately a
matter which has been left to prosecutorial discretion and companies will have
to cope with a level of uncertainty as a result. What is clear, however, is
that all commercial organisations, as part of their assessment of their
'adequate procedures', should consider reviewing their policies on hospitality
and establishing and disseminating appropriate standards of hospitality and
other promotional expenditure as this is likely to be one of the first items
requested in the event of an investigation.
Caselaws
ë
R. v Patel (Munir Yakub) [2012] EWCA Crim 1243
ë
R. v Innospec Ltd [2010] Crim. L.R. 665 Crown Ct (Southwark)
ë
R. v Dougall [2010] EWCA Crim 1048
