Cayman Islands: Chambers Global Practice Guide 2018 - Anti-Corruption

Last Updated: 8 January 2018
Article by Sam Dawson and Denis Olarou

1. OFFENCES

1.1 Legal framework for offences

In the Cayman Islands, the main legislation relating to anti-bribery and anti-corruption is the Anti-Corruption Law (2016 Revision) (referred to hereafter as the "Law"). The Law came into force on 1 January 2010 and gave effect to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and to the United Nations Convention Against Corruption (the former of which has and the latter of which has not been extended to the Cayman Islands). The Law abolished the offences that previously existed under ss. 90 to 96 of the Penal Code (2013 Revision).

The nature of the offences under the Law means that the proceeds of such offences (and, in particular, their handling by the offenders or third parties) may also give scope for charges to be laid pursuant to the Proceeds of Crime Law (2016 Revision). Indeed, this possibility is expressly recognised in s. 35 of the Law.

It is also worth noting that the United Kingdom Bribery Act 2010, while not Cayman Islands law, may be of relevance to certain persons in the Cayman Islands. Although a detailed discussion of the Act is beyond the scope of this document, certain of the offences under it can be committed by persons who have a "close connection" to the UK (which includes Cayman nationals in their capacity as British Overseas Territories citizens), regardless of their physical location or the jurisdiction in which the constituent parts of the offence were committed.

The body charged with the investigation of corruption and bribery offences in the Cayman Islands is the Cayman Islands Anti-Corruption Commission ("ACC"). The mission statement of the ACC is "to enhance the stability, prosperity and reputation of the Cayman Islands by sustaining the confidence and trust of the community in the integrity and good governance of its government and public institutions". The ACC members are appointed by the Governor and may include retired judges, retired police officers, chartered accountants, attorneys-at-law of ten or more years' call, and such other persons as the Governor considers to be qualified. If the ACC determines upon investigation that it appears that an offence has been committed, it refers the matter to the Director of Public Prosecutions ("DPP").

According to the latest statistics published by the ACC, there have been a total of 135 reports of alleged corruption registered with the ACC since the Law came into force just over seven years ago. Of these, six were under active investigation at the time and ten have been referred to other investigative units for action. Since those statistics were published in February 2017, the ACC has reported the arrests of two individuals on suspicion of committing offences under s. 10 (bribery of public officials), s. 11 (fraud on Government) and s. 13 (breach of trust) of the Law.

While a number of criminal cases have been decided under the Law over the past seven years, case law in this area continues to develop. In addition, in its publicly available Annual Reports, the ACC regularly publishes a summary of the corruption offences under the Law as well as helpful observations on the approach that it takes to tackling corruption in the Cayman Islands.

In its Annual Reports, the ACC consistently defines corruption as "abusing a position of trust to gain an undue advantage". While this definition does not have any legal force, it is useful short-hand to highlight the type of mischief that the Cayman Islands anti-corruption regime is broadly aimed at curing.

The Law itself does not contain any definition of "corruption" or "bribery" as such. However, it does create 14 main corruption offences (listed in Part III of the Law) and a number of ancillary offences (largely listed in Parts V and VIII). Broadly speaking, the offences span both the public and the private sector and both the payor and the payee of an illicit payment. While most of the offences require some form of pecuniary advantage to change hands (or at least the promise or expectation of such), some offences may be committed without anything of value changing hands.

Thematically, the 14 main corruption offences under the Law can be loosely grouped under the following headings:

  • bribery offences;
  • offences of abuse of public office;
  • appointment offences; and
  • information offences.

For the avoidance of doubt, these groupings do not reflect any statutory relationship between the grouped offences or any official guidance, but are adopted solely for convenience. In what follows, the first grouping will be dealt with under 1.2, Bribery, and the latter three under 1.3, Corruption below.

1.2 Bribery

The common thread running through the "bribery" type offences discussed in this section is that all of them involve offering or soliciting some form of advantage or benefit in connection with a person's position of trust and authority, whether in a public or commercial context. The other common thread running through these offences is that they tend to occur at the interface between private and public sectors (and sometimes within the private sector itself). As a result, it is the offences in this section that are most likely to be of practical relevance in a commercial context.

Bribery of Public Officers and Members of the Legislative Assembly (s. 10 of the Law)

It is an offence for a public officer or a member of the Legislative Assembly directly or indirectly to solicit, accept or obtain, or agree to accept or obtain (whether for him or herself or for any other person) any loan, reward, advantage or other benefit ("benefit") with intent to interfere with the administration of justice, procure or facilitate the commission of an offence, or to protect from detection or punishment a person who intends to commit an offence.

The term "public officer" encompasses a wide variety of persons in the public service. It includes judges, magistrates, arbitrators, mediators, umpires, assessors, members of a jury, and Justices of the Peace. It also includes members or employees of statutory tribunals or commissions of enquiry, as well as members, directors or employees of a government company or statutory authority, and of a not-for-profit association controlled by the government.

The offence catches not only the public officer or member of the Legislative Assembly who is the target of the bribe, but also the person who gives or offers the bribe. Clearly, while the recipient of a bribe can only ever be a public officer or a member of the Legislative Assembly, the person who gives the bribe could be anyone.

This offence carries a maximum prison term of 14 years.

An example of s. 10 of the Law in action is afforded by the case of R v Elvis Kelsey Ebanks (Ind. No. 105/2012). On 24 July 2014, the Grand Court sentenced Mr Ebanks, a police officer employed by the Royal Cayman Islands Police Service ("RCIPS"), on two counts of bribery contrary to s. 10 of the Law. In short, it was found that Mr Ebanks invited a vulnerable perpetrator of a theft, the victim of which did not wish to press charges, to pay him in order to avoid arrest, which the perpetrator did. On the first count, Mr Ebanks was found guilty of obtaining for himself a benefit in the amount of approximately USD171 with intent to interfere with the administration of justice. On the second count, with the same intent, Mr Ebanks was found guilty of obtaining a benefit of approximately USD610. Notwithstanding the relatively small amounts involved, each of these counts resulted in a custodial sentence of three years, to be served concurrently. Both the conviction and the sentence (appeal against which  was ultimately withdrawn) were affirmed by the Cayman Islands Court of Appeal.

Bribing a Foreign Public Officer (ss. 22-24 of the Law)

It is an offence for a person, in order to obtain or retain an advantage in the course of business, to promise, give, offer or agree to give or offer (whether directly or indirectly) a benefit to a foreign public officer as consideration for an act or omission by the foreign public officer in connection with the performance of his or her duties or functions, or to induce him or her to use their position to influence any acts or decisions of the relevant foreign country or public international organisation.

Notably, the definition of "foreign public officer" is broad. First, it includes not just foreign governments proper but also "public international organisations", which definition is also quite wide and would likely encompass most inter-governmental international bodies, such as the UN. Second, both in relation to foreign governments and in relation to public international organisations, the definition of "foreign public officer" goes far beyond the scope of what one might colloquially understand by this term. In particular, it includes employees of such governments or international bodies, their contractors, and persons who are "otherwise in the service" of such foreign government or public international organisations.

This offence carries a maximum prison term of 14 years. In addition, if it appears to the DPP that any person is in the process of committing or is about to commit this offence, he or she may apply to the Grand Court for an injunction restraining such conduct.

The offence of bribing a foreign official is also unusual in that it is subject to two potential statutory defences.

First, the offence will not be committed if the benefit is permitted or required under the laws of the foreign country or public international organisation or if it was made to pay the reasonable expenses incurred by the foreign public officer in good faith and that are directly related to the promotion of the payor's products and services or the execution and performance of a contract between the payor and the foreign country.

Second, the offence will not be committed if the benefit amounts to a facilitation payment. That is, if the value of the benefit is small, the payment is made to expedite or secure the performance by a foreign public officer of any act of a routine nature that is part of his or her duties or functions, and the payor creates and retains a record of the transaction. Acts of a routine nature include matters such as the issuance of a permit to do business, the processing of official documents, provision of services normally offered to the public (such as mail, telecommunications, and utilities), or provision of services normally provided as required (such as police protection, protection of perishable products from deterioration, and scheduling of inspections related to transit of goods).

However, "acts of a routine nature" do not include an award of new business. Moreover, the report required to be created and retained under this section must set out the value of the payment, the particulars of the act of a routine nature sought to be secured or expedited, the dates of the payment and the act, the identity of the relevant public official, and the identity of the person making the record.

Secret Commissions (s. 21 of the Law)

This offence is one of just two offences among the "bribery" group of offences (the other being one of the sub-species of the offence of fraud on the Government) that do not require the involvement of any public officer or member of the Legislative Assembly. Instead, this offence is capable of being committed in a purely commercial setting.

This offence is committed by a person who gives, offers or agrees to give a benefit to any agent in consideration for that agent doing or omitting to do any act relating to the affairs or business of his or her principal or for showing or forbearing to show favour or disfavour to any person in relation to the affairs or business of that principal. The agent in question commits the same offence if he or she demands, accepts, or offers or agrees to accept a benefit in the above circumstances.

The same offence is also committed if, with intent to deceive the principal, the agent uses a receipt, an account or other documentation in which the principal has an interest, that contains any statement that is false, erroneous or materially defective, and is intended to mislead the principal. A person who gives such a receipt, account, or other documentation to an agent with intent to deceive the principal, also commits the offence.

This offence carries a maximum prison term of five years.

The term "agent" is very widely defined to include generally persons who act on behalf of another with actual or implied authority. It specifically encompasses employees (employer is the principal), lawyers (client is the principal), partners (the partnership is the principal), an officer of a corporation (the corporation is the principal), a consultant (the client is the principal), and a public officer (the Cayman Islands Government is the principal). As such, while s. 21 of the Law can be applicable to bribery of public officers, it is reasonable to expect that it will be primarily deployed in circumstances where all parties to an illicit payment are private commercial actors.

Contractor Subscribing to an Election Fund (s. 12 of the Law)

This offence is aimed at protecting the integrity of the Cayman Islands electoral process.

A person commits an offence if, in order to obtain or retain a contract with the Cayman Islands Government, or as a term of any such contract (whether express or implied), he or she directly or indirectly subscribes or gives or agrees to subscribe or give to any person a benefit for the purpose of promoting the election of a candidate to the Legislative Assembly or with intent to influence the result of an election to the Legislative Assembly.

This offence carries a maximum prison sentence of ten years.

Fraud on the Government (s. 11 of the Law)

This offence was chosen to round off the section on the "bribery" type offences, because in many ways it can be seen as a hybrid offence, bridging the divide between "bribery" offences proper, which require an exchange of illicit payment for an illicit advantage (or at least the promise or expectation of such), and offences which are in the nature of abuse of public office and do not necessarily require both these elements to be present.

Section 11 of the Law has a somewhat complex structure (notably, in its 2014 Annual Report, the ACC expressed a general concern over "complex legal interpretive issues" with the Law, which appear to have hindered at least one prosecution in that reporting period). However, in summary, the offence of fraud on the Government may be committed in four principal ways:

  • a person commits this offence if, having dealings of any kind with the Cayman Islands Government, he or she confers with respect to those dealings a benefit on a public officer or a member of Legislative Assembly (or a family member of such or to any third party for the benefit of a public officer or a member of the Legislative Assembly) without the consent in writing of the relevant "chief officer" (the definition lists a number of specific senior public officers in relation to specific Government departments). A public officer or a member of the Legislative Assembly also commits this offence if he or she demands, accepts or offers or agrees to accept such a benefit in the above circumstances;
  • a person also commits this offence if he or she directly or indirectly gives, offers, or agrees to give or offer to a public officer or a member of the Legislative Assembly (or their family members or any third party for the benefit of a public officer or a member of the Legislative Assembly) a benefit as consideration for co-operation, assistance, exercise of influence or an act or omission in connection with the transaction of business relating to the Cayman Islands Government, or a claim against the Cayman Islands Government or any benefit that it is entitled to bestow. The relevant public officer or member of the Legislative Assembly also commits the offence. Crucially, the offence is committed regardless of whether the public officer or member of the Legislative Assembly is in fact able to render the co-operation, assistance, influence, act or omission which is being paid for;
  • a person who has or pretends to have influence with a public officer or a member of the Legislative Assembly in relation to the matters described in the preceding bullet point (or in relation to appointments to an office) and demands, accepts or offers or agrees to accept a benefit for him or herself or others in consideration for exercising this influence, commits an offence. So does a person who offers a benefit to a public office or a member of the Legislative Assembly in consideration of exercise of such influence; and
  • Finally, the offence is also committed by any person who, having made a tender for a contract with the Cayman Islands Government, gives, offers or agrees to give or offer to another person who has made a tender (or to his or her family or to a third person for the benefit of that person) a benefit in consideration for the withdrawal from tender of that other person. A person who demands, accepts or offers or agrees to accept a benefit in the above circumstances also commits an offence.

Whatever the mode of committing the offence, it carries a maximum prison sentence of ten years.

As can be seen from the above, the offence of fraud on the Government collects several, sometimes somewhat disparate, offences under one roof. Each of the sub-species of the offence is noteworthy in its own way.

The first of the four sub-offences discussed is noteworthy because it appears that it can be committed without any benefit actually flowing back to the payor or even any specific intent that such benefit should flow back. All that is required is that the payor has dealings with the Cayman Islands Government and, in the absence of written permission from a "chief officer", confers a benefit on a public officer or a member of the Legislative Assembly "with respect to those dealings".

The second and third sub-offences discussed above are noteworthy because they can be committed regardless of the fact that, in reality, the person or public officer in question did not have the capacity to render the illicit services that the bribe was intended to buy. As such, it would appear that the first three sub-offences may be committed without any identifiable benefit or actually accruing to the payor.

The last of the four sub-offences is the second of the two in the "bribery" group (the other being the offence of secret commissions) that does not require the involvement of a public officer or a member of the Legislative Assembly. That sub-offence is, in effect, one of rigging a public tender process and can be committed between two purely commercial parties.

On 5 February 2016, the Grand Court sentenced the former Chairman of the Health Services Board, Mr Canover Watson, to seven years' imprisonment for a number of offences, including fraud on the Government contrary to s. 11(1)(c) of the Law (R v Canover Norbert Watson (Ind. No. 0049/15)). It was found that Mr Watson conspired with Mr Jeffrey Webb (a convicted racketeer and former vice president of FIFA) to steal money from the Cayman Islands Health Services Authority and the Cayman Islands National Insurance Company. Mr Watson implemented this plan by, among other things, increasing the implementation fee and the transaction fees for certain projects.

1.3 Corruption Abuse of Public Office Offences

The common thread running through this group of offences is that they can only be committed by a public officer or a member of the Legislative Assembly, that they do not require that officer or member to have derived any benefit from his or her malfeasance, and that the mischief they aim to cure is, at root, loss of public confidence in public officials.

As such, this group of offences is likely to be of less relevance in a commercial context, save perhaps where there is an allegation of a conspiracy to commit one of them involving commercial parties as co-conspirators or where a commercial entity is adversely affected by the illegal conduct of a public officer.

Abuse of Office (s. 17 of the Law)

A public officer or a member of the Legislative Assembly commits an offence if he or she either performs or directs to be performed, in abuse of the authority of their office, any arbitrary act prejudicial to the rights of another.

This offence carries a maximum prison term of two years. However, if the act in question is done or directed to be done for the purposes of obtaining a benefit, then the maximum prison term rises to three years.

Breach of Trust by Public Officer or by a Member of the Legislative Assembly (s. 13 of the Law)

A public officer or a member of the Legislative Assembly commits an offence if, in connection with the duties of his or her office, he or she commits fraud or a breach of trust, regardless of whether or not that fraud or breach of trust would be an offence if committed in relation to a private person.

This offence carries a maximum prison term of five years.

In the case of R v Canover Norbert Watson discussed above, Mr Watson was also convicted of breach of trust contrary to s. 13 of the Law.

False Claims by Public Officers (s. 16 of the Law)

A public officer commits this offence if, being employed in a capacity that requires or enables him or her to furnish returns or statements relating to any sum payable or claimed to be payable to him or herself or to another person, or relating to any other matter required to be certified by the person for payment of money or delivery of goods, they make a return or a statement which they know to be materially false.

This offence carries a maximum fine of KYD5,000 and/or a maximum prison sentence of two years.

False Certificates by Public Officers or by Members of the Legislative Assembly (s. 18 of the Law)

A public officer or a member of the Legislative Assembly commits this offence if he or she is authorised or required by law to give any certificate relating to any matter by virtue of which the rights of any person may be prejudicially affected, and he or she gives a certificate which they know to be materially false.

This offence carries a maximum fine of KYD5,000 and/or a maximum prison sentence of two years.

Appointment Offences

The common thread running through this group of offences under the Law is that they involve dealing in public offices. The offences are not limited to the acts of public officers. As such any person may commit them, although one might expect that these offences would have limited relevance in a commercial context.

Selling or Purchasing Office (s. 14 of the Law)

A person commits this offence if he or she purports or agrees to sell an appointment or resignation from public office (or consent to the same), or receives or agrees to receive a reward or profit from the purported sale of such. The person who is on the other side of such a transaction also commits this offence.

This offence carries a maximum prison term of five years.

Influencing or Negotiating Appointments or Dealing in Offices (s. 15 of the Law)

A person commits this offence if he or she receives, agrees to receive, gives or procures to be given (directly or indirectly) a benefit in consideration for co-operation, assistance or exercise of influence to secure the appointment of any person to a public office. The offence is also committed by a person who solicits, recommends, or negotiates with respect to an appointment or resignation from public office in expectation of a benefit. Equally, a person who, without lawful authority, keeps a place for transacting or negotiating any business relating to the above also commits the offence.

This offence carries a maximum prison term of five years.

Information Offences

The offences in this category are primarily concerned with failure to disclose pertinent (or true) information.

Conflicts of Interest (s. 19 of the Law)

Where a public officer of a Government entity, a member of the Legislative Assembly, or a member of their family, or their associate has a direct, indirect or beneficial interest in any company, partnership or undertaking with which the Government entity proposes to deal, the person in question must forthwith disclose that interest to the Government entity in writing. The same applies to situations where a public officer, a member of the Legislative Assembly, or their family member or associate has a personal interest in a decision to be taken by the Government entity in question.

If the person in question fails to disclose as required above and votes or otherwise takes part in the relevant decision, he or she commits an offence. This offence carries a maximum prison term of five years.

In the decision of R v Canover Norbert Watson discussed above, Mr Watson was found to have failed to declare his interest contrary to s. 19(2) and (3) of the Law.

Duty of a Public Officer andMember of the Legislative Assembly to Whom a Bribe is Offered etc. (s. 20 of the Law)

The above description of this offence in the margins of the Law needs to be treated with care, because, contrary to what it suggests, this offence can actually be committed by any person, and not just by a public officer or a member of the Legislative Assembly.

A public officer or a member of the Legislative Assembly has a duty to report to the ACC any instance of a benefit being offered to them in contravention of the Law. Failure to do so is an offence that carries a maximum fine of KYD10,000 and/or a prison term of two years.

However, any person is required to report to the ACC any instance of a benefit contrary to the Law being solicited from him or her. Failure to do so is an offence, and the penalties are the same as above.

Public officers and members of the Legislative Assembly do have a further obligation to report to the ACC any instances where they have reasonable cause to believe that another public officer or member of the Legislative Assembly has solicited, accepted or obtained, or agreed to accept or obtain any benefit in contravention of the Law. Failure to do so is an offence, and attracts the penalties outlined above.

False Statements to the ACC(s. 25 of the Law)

The final substantive offence is committed where a person makes or causes to be made to the ACC or to an investigating officer in the course of an ACC investigation or the investigating officer's exercise of his or her powers under the Law a statement which he or she knows to be false or intended to mislead, or which is not consistent with a previous statement made in the same circumstances.

This offence carries a maximum fine of KYD10,000 and/or a maximum prison term of three years.

1.4 Scope Limitation Period (s)

There are no limitation periods for prosecution of indictable offences. However, no offence which is triable summarily shall be triable by a Summary Court unless the charge or complaint relating to it is laid within six months of the date on which evidence sufficient to justify proceedings came to the actual or constructive knowledge of a competent complainant (s. 78 of the Criminal Procedure Code (2017 Revision)).

Most of the substantive offences are indictable offences. However, some, such as, for example, abuse of office contrary to s. 17 of the Law, victimisation of whistle-blowers contrary to s. 20(7) of the Law, and making false statements to the ACC contrary to s. 25(1) of the Law are summary offences.

Geographical Reach

The Law does have extra-territorial reach. Section 39 means that an offence under the Law may be committed either if the relevant conduct occurs wholly or partly in the Cayman Islands (or aboard a Caymanian aircraft or ship) or if such conduct occurs wholly outside the Cayman Islands, provided that at the relevant time the person committing the offence has Caymanian status, is a resident of the Cayman Islands, or is a body corporate incorporated by or under a law of the Cayman Islands.

As such, individuals resident and corporations incorporated in the Cayman Islands are susceptible to committing offences under the Law even if all the constituent elements of the offence take place outside the Cayman Islands.

Liability

Liability for offences under the Law can extend beyond the person who has actually committed the primary offences.

Pursuant to s. 52 of the Law, unless expressly provided otherwise, a person may be liable for conspiracy or incitement to commit an offence under the Law. Under the same provision, a person may also be liable for aiding, abetting, counselling or procuring the commission of an offence under the Law.

Corporations can be liable for certain offences under the Law. Moreover, pursuant to s. 51 of the Law, where an offence has been committed by a corporation and it is proved that the corporation committed it with the consent or connivance, or through any neglect on the part of, its officers (or persons purporting to act as officers), such persons shall be treated as having committed the relevant offences together with the corporation. In this sense, the Law provides for "reverse" vicarious liability of officers for offences committed by their corporations.

2. DEFENCES & EXCEPTIONS

2.1 Defences

Other than disproving the factual case advanced by the prosecution, there are very few affirmative defences that are available.

The offences of fraud on the Government contrary to s. 11(1) (b) and (c) of the Law can be defended on the basis that consent in writing for the relevant benefit has been given by the relevant "chief officer".

Similarly, the offence of dealing in offices contrary to s. 15(c) of the Law can be defended by showing that the accused had lawful authority for doing so.

A person who is accused of committing an offence contrary to s. 20(3) and (4) of the Law (failure to disclose being asked to pay a bribe) can defend the charge by showing that he or she had a "reasonable excuse" for their failure to report the approach. Notably, this defence is not available to a public officer or a member of the Legislative Assembly under the otherwise similar provisions of s. 20(1) and (2) of the Law. It is, however, available to a public officer or a member of the Legislative Assembly in respect of the offence at s. 20(5) and (6) of the Law (failure to report reasonable cause to believe that another public officer or member of Legislative Assembly is implicated in bribery).

As discussed in more detail above (see 1.2, Bribery), the offence of bribing a foreign public officer (s. 22 of the Law) is exceptional in that it is subject to two distinct statutory defences. No offence is committed if the accused is able to show that the benefit in question is permitted or required by the laws of the foreign country or public international organisation or that it is a reimbursement for reasonable expenses incurred in good faith in connection with promotion of products and services or the execution of the relevant contract (s. 23 of the Law). Further, no offence will have been committed if the benefit is a facilitation payment that complies with of s. 24 of the Law.

Among other conditions that a benefit has to satisfy in order to qualify as a facilitation payment, s. 24(1)(a) provides that the value of the payment must be "small". It is not clear what amount would satisfy this de minimis requirement.

2.2 De minimis exceptions

There are no similar de minimis exceptions to any of the other offences under the Law. However, no proceedings for an offence under the Law can be instituted in the Cayman Islands without the consent of the DPP (s. 43 of the Law). The decision to charge an offence is taken in accordance with the tests set out in the UK Code for Crown Prosecutors, which includes considering whether a prosecution is in the public interest. Since the harm caused to the victim is listed as one of the factors to be considered in determining where the public interest lies, the amount in question might be expected to be of some relevance.

However, it may be unwise to attribute too much weight to this factor, because, at least where bribery of public officers is involved, there is strong public interest in preserving the integrity and reputation of public institutions. Indeed, cases such as R v Elvis Kelsey Ebanks (discussed above) suggest that the ACC and the DPP might be willing to investigate and prosecute cases of corruption involving public officers even where the monetary sums involved must surely be considered de minimis. In the R v Elvis Kelsey Ebanks case, the sum total of the illicit benefit obtained by the RCIPS police officer was approximately USD781, yet the Grand Court handed down (and the Cayman Islands Court of Appeal affirmed) a custodial sentence of three years. In R v Yates- Rivers (Ind. No. 42/2014) (as reported in the press), the accused was convicted of fraud on the government contrary to s. 11 of the Law in connection with a payment of just USD125 to a civil servant in order to smooth the passage of her naturalisation application. The accused was sentenced to perform 100 hours of community service.

2.3 Exempt industries/sectors

There are no sectors or industries for which any exemptions are made from the offences under the Law. However, s. 42 of the Law does limit the ACC's otherwise extensive rights to access documents and search premises in the exceptional circumstances where, in the opinion of the Governor, such access would prejudice the security of the Cayman Islands or involve the disclosure of any matters or deliberations of a secret or confidential nature of the Cabinet or of the Legislative Assembly or any sub-committee of either body.

2.4 Safe harbour or amnesty programme

While there are no safe harbour or amnesty programmes based on self-reporting, as with criminal offences generally,

early guilty pleas and rendering assistance to the prosecuting and investigating authorities may lead to a lower sentence. This is discussed in more detail in 3, Penalties, below.

3. PENALTIES

3.1 Penalties on conviction

The maximum penalties applicable on conviction for the various offences have been set out above.

3.2 Guidelines applicable to the assessment of penalties

Sentencing is for the judge to determine in each individual case within the maxima imposed by the Law. As with any other criminal case, the judge will be guided by a number of factors.

The Chief Justice's Sentencing Guidelines have been referred to in R v Elvis Kelsey Ebanks. Although the Guidelines do not deal specifically with the offences under the Law, the Grand Court in R v Elvis Kelsey Ebanks drew on the guidance in relation to dishonesty offences, and especially theft. The latest version of the Guidelines provides that abuse of power or abuse of a position of trust (which would characterise many of the offences under the Law) are to be considered as aggravating factors.

However, the Guidelines also provide that, in general, reduction of sentence might be appropriate in consideration for any guilty plea. Where a guilty plea is entered at the "first reasonable opportunity", the recommended reduction is one third of the sentence that would otherwise be imposed. In R v Canover Norbert Watson, the Judge expressly observed in his sentencing remarks that the accused's lack of remorse meant that he "lost the chance of any reduction for plea" (at paragraph 7). Separately from reduction for plea, the Guidelines also suggest that reduction might be appropriate for assistance rendered to the prosecuting or enforcement authorities. The Guidelines state that any discount should reflect "the extent and nature of assistance given or offered" but that in exceptional circumstances the co-operation and assistance "could justify the imposition of a non-custodial sentence".

It would appear that in appropriate cases the Grand Court will also be guided by the sentencing practice in England and Wales. In R v Canover Norbert Watson, the Judge noted that in determining the sentence he was guided by the Definitive Guideline issued by the Sentencing Council of England and Wales for Fraud, Bribery and Money Laundering Offences (at paragraph 8). English criminal sentencing decisions also provide persuasive authority.

4. WHISTLE-BLOWING

4.1 Protection afforded to whistle-blowers

The Law contains provisions that make it an offence to victimise persons who make a disclosure to the ACC pursuant to s. 20 of the Law. Specifically, ss. 20(7) and (8) provide that a person who causes injury or loss, intimidates or harasses, discriminates against in employment, or threatens reprisals against a person who has made a disclosure under ss. 20(1), (3), or (5), commits an offence. The offence carries a maximum prison term of two years.

However, this protection against "victimisation" is only available to persons who make a disclosure under s. 20 of the Law, which sets out relatively narrow circumstances for such a disclosure. For example, while a person from whom a bribe was solicited can make a protected disclosure under s. 20(3) (indeed, failure to make such a disclosure is a criminal offence in itself), a person who merely has reasonable cause to believe that somebody has solicited or been approached for a bribe does not fall within any of the three disclosure gateways in s. 20 of the Law (unless he or she happens to be a public officer or a member of the Legislative Assembly) and, therefore, would not benefit from the protection against victimisation under s. 20(7) of the Law.

Further protection for whistle-blowers is found in s. 37 of the Law, which provides that where a person discloses to the ACC or to an investigating officer information concerning a corruption offence, the disclosure shall not be treated as a breach of any restriction upon the disclosure of information and shall not give rise to any civil liability. The section also makes provisions for preserving the anonymity of the informer. That section does not, however, afford any protection against victimisation to informers at large, as s. 20(7) does in relation to the narrow classes of informers required to make disclosures under s. 20 of the Law.

Apart from protection under the Law, a whistle-blower may also be able to appeal to s. 50 of the Freedom of Information Law (2015 Revision) ("FIL"), which provides that no person may be subject to any legal, administrative, or employment-related sanction, regardless of any breach of a legal or employment-related obligation, for releasing information on wrong-doing as long as he or she acted in good faith and in the reasonable belief that the information was substantially true and disclosed evidence of wrong-doing. The definition of "wrong-doing" for these purposes includes the commission of a criminal offence and "corruption, dishonesty, or serious maladministration". However, s. 50 of the FIL does not provide any protection against victimisation other than through legal, administrative or employment-related means.

Whistle-blowers will benefit from additional protection as and when the Whistle-blower Protection Law, 2015, ("WPL") eventually comes into force (it is not in force at the time of writing). Part four of the WPL contains extensive provisions to protect whistle-blower employees, with detailed provisions for remedies for victimisation, including re-instatement orders and damages for detrimental action. The WPL is currently scheduled to come into force on 1 February 2018.

5. ENFORCEMENT

5.1 Enforcement body

The ACC is the designated anti-corruption authority in the Cayman Islands (s. 3 of the Law). The ACC is supported in its investigations by the dedicated Anti-Corruption Unit of the RCIPS. As of January 2017, the ACC reports that a Memorandum of Understanding has been signed between it and the RCIPS, which governs co-operation and assistance between the two entities. A template for the delegation of powers from the ACC to the Commissioner of the RCIPS has also been agreed.

5.2 General powers and limitations of the enforcement body/bodies

The ACC is responsible for the administration of the Law (s. 3(2) of the Law). For this purpose, the ACC is given wide powers, including (under s. 4 of the Law) to receive and consider any reports of corruption, analyse and disseminate information, detect and investigate suspected offences, and generally do anything that it is required or authorised to do or which is necessary for achieving the purpose of the Law.

If, upon completion of an investigation, it appears to the ACC that a person has committed a corruption offence (or, indeed, any other offence), it must refer the matter to the DPP to deal with as it sees fit (s. 3(7) of the Law). At that point, therefore, the jurisdiction of the ACC ceases and the jurisdiction of prosecutorial authorities begins.

5.3 Powers of the enforcement bodies to require documentation

The ACC has significant powers to compel disclosure of documents. Pursuant to s. 4(2)(c) of the Law, the ACC may, in writing, require the provision by any person of information (except information coming to a professional legal adviser in privileged circumstances) for the purpose of clarifying or amplifying information already disclosed to it under the Law. No court order is necessary for this. Any person who, without reasonable excuse, fails to comply with such a request commits a criminal offence and is liable to a fine of KYD50,000 and/or imprisonment for a term of two years (s. 4(4) of the Law).

The ACC has the power, based on information disclosed to it under the Law, to order any person to refrain from dealing with a person's bank account or other property for a period not exceeding 21 days if the ACC is satisfied that there is a reasonable cause to believe that the information it received relates to proceeds or suspected proceeds of a corruption offence (s. 4(2)(b)). This power, however, is exercisable only with the sanction of the Grand Court (s. 4(3) of the Law).

The ACC also has the power to appoint investigating officers (s. 3C(1) of the Law). The investigating officers have, for the purposes of performing their duties under the Law, all the powers and immunities of a police constable, save that they shall not carry a firearm (s. 3C(2) of the Law). In particular, the investigating officers wield the following powers:

  • power of arrest – an investigating officer has the power to arrest, without warrant, any person whom he or she reasonably suspects has committed an offence punishable by imprisonment under the Law (ss. 3D(1) and 29 of the Law);
  • power to obtain documents – an investigating officer may, with the assistance of the DPP, apply to the Grand Court for an order that particular material or material of particular description be discovered to him or her (ss. 30(1) and (2) of the Law). Indeed, where such an order has been made, it is a criminal offence for a person, if he or she knows or suspects that an investigation is taking place, to fail to make any disclosure where such failure is likely to prejudice the investigation (s. 30(9) of the Law). This offence is punishable by a prison term of up to five years; and
  • authority for search – an investigating officer may, with the assistance of the DPP, apply to the Grand Court for a search warrant in relation to specified premises (s. 31 of the Law).

Resisting or obstructing an investigating officer in the discharge of his or her powers and duties under the law is a criminal offence, punishable by a fine of up to KYD5,000 and/or two years' imprisonment (s. 34 of the Law).

5.4 Jurisdictional reach of the body/bodies

The ACC's remit is to administer the Law and investigate any suspected offences committed under the Law.

As such, the ACC's jurisdictional reach mirrors that of the Law, which does have reach beyond the Cayman Islands where the relevant offences have been committed by a person or corporation resident in the Cayman Islands. Moreover, the ACC has the power to disclose to any overseas anti-corruption authority any information relating to conduct which constitutes a corruption offence or would constitute such an offence if it had occurred in the Cayman Islands. It may do this in order to:

  • report the possible commission of an offence;
  • initiate a criminal investigation;
  • assist with any investigation; or
  • generally give effect to the purpose of this law (s. 5(b) of the Law).

Further, the Law makes it clear that extradition may be granted or obtained in relation to corruption offences.

Therefore, not only does the ACC have extra-jurisdictional reach with a view to investigating the offences to be prosecuted in the Cayman Islands, but it also has the powers to co-operate with other anti-corruption authorities internationally.

6. Future changes

6.1 Likely changes to the applicable legislation or the enforcement body

The minutes of the ACC dated 18 January 2017 indicated that a memorandum of understanding between the ACC and the Cayman Islands Monetary Authority is likely to be signed in the near future. Another memorandum of understanding appears to be in the works between the ACC and the Cayman Islands Financial Reporting Authority. An updated corruption reporting procedure and a code of conduct are also expected to be published soon.

The minutes of the ACC dated 8 February 2017 indicated that the possibility of a memorandum of understanding with the Auditor General is also being considered.

The eventual coming into force on 1 February 2018 of the Whistle-blower Protection Law, 2015, should serve to improve further the environment for the fight against corruption and bribery in the Cayman Islands.

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.

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Events from this Firm
24 Jan 2018, Conference, St Peter Port, Guernsey

In association with the Guernsey Training Agency, we are pleased to offer a unique, interactive event that will explore the role of integrity in the modern employment relationship, with a particular focus on the financial services sector.

6 Feb 2018, Conference, St Helier, Jersey

Carey Olsen, part of Jersey eGaming, the group of companies which provide services to the eGaming sector in Jersey, Channel Islands, will once again be attending ICE, London in February 2018.

20 Feb 2018, Conference, St Helier, Jersey

Carey Olsen partner Marcus Pallot is speaking at the 2nd Annual International Taxation Conference held on 20 February and organised by the Jersey International Business School.

 
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