Gibraltar: It’s Good But It’s Not Quite Right – The OECD And The UK Bribery Act

Last Updated: 8 May 2012
Article by Scott Simmons and Tito Garro

On 30th March 2012, the Organisation for Economic Co-operation & Development ('OECD') released its report evaluating the UK Bribery Act 2010 ('the Act') and its enforcement of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions ('the Convention'). The report, running to 79 pages, took an in-depth look at how the UK had implemented the Act and gave a very positive view on what had been achieved so far, but cautiously reminded the UK that there was still plenty of work to be done.

The working group praised the UK for the significant increase in foreign bribery enforcement since its earlier reports of 2005 and 2008. The UK was commended for publishing its Guidance to Commercial Organisations ('The Guidance') which preceded the Act coming into force and for the heightened awareness of foreign bribery-related issues in the UK. The working group also welcomed the UK's approach of requiring companies to compensate the country of a bribed official.

However, the report highlighted a number of pertinent issues which require consideration. For example, it was concerned that, to settle foreign bribery cases, the Serious Fraud Office ('SFO') is increasingly relying on civil recovery orders which require less judicial oversight and are less transparent than criminal plea agreements, with some cases having confidentiality agreements in place that prevent the disclosure of key information after cases are settled. As less information is made public, there cannot be a proper assessment of whether the sanctions imposed are effective, proportionate and dissuasive. The report suggests that this misses an opportunity for the UK to provide guidance and raise public awareness on foreign bribery-related issues. Many commentators believe that this very point is the reason many companies have yet to implement policies and procedures: a lack of public awareness of the sanctions has meant that businesses have failed to appreciate just how serious the consequences of breaching the Act can be, with many risking the future of their businesses.

The report noted shortcomings with the Act, particularly in respect of what it referred to as the 'identification theory', that being the ability to identify officers that have the 'directing mind' to commit an offence. The Act states that senior officers can be guilty of an offence if an act of bribery takes place with their consent or connivance. However, many corporations have complex structures in place, meaning that if an act was carried out with the consent of, for example, a regional manager or relatively senior manager, they would not be liable under the Act, thus lessening the effect of the offence. Nonetheless, it noted that as the section 7 offence of failure to prevent bribery becomes used by the SFO, concerns over the identification theory may recede.

Most noticeably, the report dealt with the need for the UK to introduce Deferred Prosecution Agreements ('DPAs'). DPAs are commonly used in the US to encourage self-reporting without it necessarily leading to prosecution. Under the terms of a DPA in the US the company may have to pay substantial amounts to those affected by its actions and account for its profits, it may have to agree to working with a corporate monitor and to account to the Department of Justice for its future actions. In return the US prosecution is deferred and, so long as it keeps to the agreement, the prosecution will eventually be dismissed. In the UK, because no such agreements exist, if the crime is serious enough, even a self-report could lead to prosecution as the courts have the ultimate say in these cases, thus inhibiting many companies from seeing the benefits of selfreporting.

The report also looked at the Act in light of Article 5 of the Convention, which states that '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 person involved.' Earlier reports had noted that Article 5 did not have binding force in the UK and this continues to be the case. The Code for Crown Prosecutors states that one public interest factor that tends against prosecution is where 'a prosecution may require details to be made public that could harm... international relations' and that this could be read as being inconsistent with Article 5.

Interestingly, the report looked at Crown Dependencies ('CDs') and Overseas Territories ('OTs'). The report makes the point of referring to some of these CDs and OTs as 'offshore financial centres, which can be used to facilitate foreign bribery'. It noted that it had been recommending that the UK extend the Convention to its CDs and OTs since 1999, but the UK had left it for the CDs and OTs to decide to which treaties they become a party.

The report further noted that the Convention had been extended to all three CDs – Isle of Man (2001), Guernsey (2009) and Jersey (2009) – but only one OT: Cayman Islands (2010). 'The other OTs have made little progress, if any'. According to the report, Gibraltar had submitted a draft foreign bribery Bill to the UK for review in 2005, but it was not until 2011 that it passed the Crimes Act, (the bribery provisions of which are almost word-for-word the same as the Bribery Act), but this has yet to come into force.

The report recommended that the UK adopt a roadmap setting out specific goals, concrete steps and deadlines for implementing the Convention in the OTs before the UK considers legislating on their behalf. It also noted that the UK had not extended the jurisdiction of the Act to legal persons incorporated in the CDs and OTs unless those companies carried out business or part of their business in the UK, despite the fact that it had made clear in court briefs that 'corporations incorporated under the laws of any of its Overseas Territories are subjects of the United Kingdom'. The UK told the working group that it had not extended the jurisdiction to legal persons because the regulation of commerce and business organisations had devolved to the CDs and OTs. The report recommended that the UK extend the jurisdiction to companies incorporated in the CDs and OTs as soon as possible.

What is equally interesting is what the report says about the bribery laws adopted in the Crown Dependencies. All three have offences that cover foreign bribery, but only the Isle of Man has an offence that applies specifically to foreign bribery. Jersey and Guernsey have offences that are based on the 'problematic' agentprincipal concept similar to the pre-Bribery Act legislation in the UK, which itself was deemed insufficient by earlier reports. Furthermore, none of the CDs and OTs has legislation criminalising a company's failure to prevent bribery. Therefore, when the Gibraltar Crimes Act comes into force, its bribery provisions will be the most OECD-compliant of all the Crown Dependencies and Overseas Territories, enhancing its reputation as an established international finance centre in the European Union.

According to information supplied by the SFO to the working group, it had 11 active bribery/corruption cases and a further 18 cases under consideration as of 31st January 2012. Only time will tell what impact those cases will have in the UK and overseas, but in the meantime, the UK and Gibraltar still have plenty of work to do.

www.gibraltarlaw.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions