The General Scheme of the Criminal Justice (Corruption) Bill 2012 (the "Draft Scheme") was approved by the Irish Government on June 19, 2012. The measures set out in the Draft Scheme, along with the Criminal Justice Act 2011, represent part of the Government's focus on attacking and preventing white collar crime. The existing law on corruption, the Prevention of Corruption Acts 1889 - 2010, comprises several different Acts, and includes statutes dating back to the late nineteenth century. The general provision of the Draft Scheme is to replace the Prevention of Corruption Acts 1889 - 2010 with a single statute in an effort to modernise and clarify Irish law on bribery and corruption. The new legislation will seek to update the existing offences in relation to bribery, add new related offences, and implement some of the recommendations of the Mahon Tribunal1 report into planning matters and payments to politicians. The Courts will also be given wider-ranging powers to deal with possible corruption offences by Irish public officials. The definition of "Irish public official" includes Government Ministers, members of Dáil Éireann and Seanad Éireann, judges, civil and public servants along with directors of companies.

Liability of Corporate Bodies

One aspect of the proposed legislation, in response to criticism of existing Irish law by the Organisation for Economic Co-operation and Development ("OECD"), is to establish a "clear provision for the liability of corporate bodies for corrupt criminal acts". Up to now, such liability was provided under the common law but not specifically set down in statute. The Draft Scheme includes new provisions allowing bribery and corrupt practices by employees and agents of a company to be automatically imputed to the company. Head 13 titled "Offences by Bodies Corporate and Unincorporated Bodies" provides:

"Where an offence under this Act has been committed by a director, manager, secretary, officer, employee, subsidiary or agent of a body corporate with the intention of obtaining or retaining business for the body corporate or to obtain or retain an advantage in the conduct of business for the body corporate, that body corporate shall also be guilty of an offence".

An Irish company with foreign subsidiaries will also have a responsibility to ensure the ethical behaviour of its entire organisation. Highlighted as a key area for legislative reform in the Arthur Cox December 2011 Bulletin "Bribery and Anti-Corruption Legislation in Ireland and the Bribery Act, 2010 (United Kingdom)", the proposed extraterritorial provisions contained in the Draft Scheme mirror comparable UK legislation and were included on the recommendation of the Mahon Tribunal. In order to avoid liability, companies must demonstrate that "all reasonable steps" and "all due diligence" were exercised. It is considered that this will provide greater clarity for companies in respect of their criminal liability.

Defence - "All Reasonable Steps"

Head 13 of the Draft Scheme makes provision for a defence by a body corporate to prove that it took "all reasonable steps" and exercised "all due diligence" in avoiding the commission of an offence of bribery, corrupt practices and related unlawful behaviour by: employees; subsidiaries; agents; officers and managers; and directors and secretaries. The Draft Scheme provides no guidance as to what will constitute "reasonable steps" or appropriate "due diligence", but it appears likely that the Irish legislature will have regard to the guidance issued by Ministry of Justice, UK ("MoJ Guidance") in respect of comparable provisions in the UK Bribery Act, 2010. The essence of the MoJ Guidance is the adoption of a risk based approach and the design and operation of proportionate structures and procedures to prevent corruption2.

Liability of Management Personnel

In addition to the proposed strict corporate criminal liability the Draft Scheme provides that directors, managers and secretaries, or persons purporting to act in any such capacity, who "consent to", "approve or", or "wilfully neglect" the commission of an offence by a body corporate will also be criminally liable.

Offences

According to the Draft Scheme several new offences in relation to bribery and corruption will be enacted and the language in relation to existing offences will be simplified and modernised. The definition of the term "corruptly" is also to be widened to include the doing of any act or omission:

"(a) in breach of duty; (b) without due impartiality; (c) without lawful authority; (d) in breach of a relevant code of ethics or discipline; (e) in pursuit of undue benefit; (f) in a deceitful, dishonest or misleading manner; or (g) with an improper purpose".

The offences created in the Draft Scheme include:

  • Active and Passive Corruption - corruptly offering and/or accepting any consideration or advantage, as an inducement to, or reward for any person doing any act or making any omission in relation to his or her office, employment, position or business;
  • Active and passive trading in influence - offering and/ or accepting any gift, consideration or advantage in connection with inducing another person to exert improper influence over the acts or omissions of an Irish public official or foreign public official;
  • Corruption in office – use by Irish public official of their position to corruptly obtain a gift consideration or advantage. Pursuant to a recommendation of the Mahon Tribunal this offence expressly provides that the misuse of confidential information is an offence;
  • Bribery of a foreign public official - corruptly offering to give any gift, consideration or advantage to a person as an inducement to, or reward for, or otherwise on account of a foreign public official doing any act or making any omission in relation to his or her office, employment, position or business;
  • Making reckless payments - giving a gift, consideration or advantage to a third party knowing or being reckless as to whether that third party intends to use the payment in the commission of a bribery or corruption offence;
  • Using documents to deceive - corruptly using false or defective documents to induce a person to make some omission or provide some service in relation to his or her office, employment, position or business;
  • Intimidation - corruptly threatening harm to a person with the intention to influence that person to do any act or make any omission in relation to his or her office, employment, position or business.

Presumptions

In order to facilitate investigations the Draft Scheme implements the recommendations of the Mahon Tribunal and extends the presumptions contained in the existing Prevention of Corruption Acts 1889 – 2010. Where a presumption applies the relevant action is presumed to have taken place corruptly unless the contrary is proven. Included in the Draft Scheme are presumptions in respect of certain gifts, consideration or advantages given to Irish public officials and connected persons, and a presumption in respect of certain donations made to political parties. A presumption of corrupt enrichment will also apply in circumstances where an Irish public official:

"(a) maintains a standard of living above that which is commensurate with his or her official emoluments and interests; or (b) is in control of property of a value disproportionate to his or her official emoluments and interests".

Penalties

Under the Draft Scheme the punishments for bribery and corruption offences are to be widened. Penalties for active and passive trading in influence offences are 12 months/Class A fine on summary conviction and 5 years/ unlimited fine upon conviction on indictment. Penalties for all the other main offences are 12 months/Class A fine on summary conviction and 10 years/unlimited fine upon conviction on indictment. Provision is also made for the forfeiture of any bribe, or the value of any bribe, related to the offence. These provisions are similar to those contained in the Proceeds of Crime (Amendment) Act 2005 and discussed in the December 2011 Bulletin3. Where it is in the interest of maintaining or restoring public confidence in the public administration of the State, and where it is in the interest of justice to do so, a court may order an Irish public official to forfeit his or her position for a specified period not exceeding 10 years.

Practical implications for organisations

In advance of the implementation of the Criminal Justice (Corruption) Bill 2012, commercial organisations should review the adequacy of their internal procedures to prevent bribery and corruption. Companies subject to the UK Bribery Act, 2010 may already have effective procedures in place, however these procedures require regular revision and a robust approach should be taken to ensure compliance across an organisation, irrespective of where operations are conducted. Professional advice should also be sought to determine what policies and procedures may be appropriate for a particular organisation. This action is essential to avoid liability for the actions of persons associated with a business should they be involved in any form of corruption or bribery.

Conclusion

If enacted as set out in the Draft Scheme, the new Criminal Justice (Corruption) Act, will replace the previous outdated regime with comprehensive and far reaching anti-bribery laws. However, no indication has yet been given as to a possible enactment date, nor is it known what amendments will be made to the Draft Scheme when it becomes a bill. The Draft Scheme is being referred to the Joint Oireachtas Committee on Justice, Defence and Equality for its consideration prior to formal drafting by the Office of the Parliamentary Counsel to the Government.

Footnotes

1 The Tribunal for Inquiry into Certain Planning Matters and Payments (the "Mahon Tribunal"), was established to investigate allegations of corruption in the area of planning, zoning and development of land in Ireland. The final report of the Mahon Tribunal, published 22 March 2012, set out the findings of the tribunal and proposed a number of changes in the law on bribery, corruption and corporate transparency, among other areas.

2 An analysis of the MoJ Guidelines is contained in the Arthur Cox December 2011 Bulletin "Bribery and Anti-Corruption Legislation in Ireland and the Bribery Act, 2010 (United Kingdom)"

3 "Bribery and Anti-Corruption Legislation in Ireland and the Bribery Act, 2010 (United Kingdom)", Arthur Cox, December 2011

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