The UK government is aiming to tighten up the area of bribery law, codifying the current rules and modernising them to enable prosecutors and the courts to deal with bribery cases more effectively. It is hoped that the Bill will enable the UK to enhance its international reputation for the highest ethical standards. The Bribery Bill was presented to the House of Lords on 19 November 2009 and is currently at committee stage. Further line by line scrutiny of the Bill is scheduled for 2 February 2010. This article reflects on the Bill and its implications in its current state as at today's date, bearing in mind that the Bill has not as yet received Royal Assent.
What Is Bribery? Why The Change?
The Government has been urged to introduce the Bill as soon as possible in the light of its "protracted and faltering history". Currently, it would be fair to say that the UK's bribery law is complex and uncertain, governed by an amalgam of common and statutory law. Indeed, the UK has been exposed to heavy criticism for its laws on bribery. The Organisation of Economic Cooperation and Development has said it is "disappointed and seriously concerned" about the failure of the UK's bribery laws. The fact that the UK has thus far failed to successfully prosecute any bribery case against a company bears testimony to the need for legal reform.
It has even been suggested that the UK is, at present, failing to comply with its obligations under Article 1 of the OECD Bribery Convention, which stipulates that each party to the convention must make it a criminal offence for any person intentionally to offer any advantage whether directly or indirectly to a foreign public official or retain business.
Furthermore, the Law Commission has been involved in protracted reviews and proposals for reform to the existing law on bribery, publishing its initial report in 1998. In November 2008, a fully revised and final consultation paper was issued entitled "Reforming Bribery" which restated the need for legal reform citing four principal issues and concerns as follows:
The amalgam of common law and statutory law with their differing scopes for the offence resulted in a lack of clarity and cohesion;
- Lack Of Distinction
Between public and private sector bribery. The Public Bodies Corrupt Practices Act 1889 is confined to bribery of public officials, whereas The Prevention of Corruption Act 1906 applies to the bribery of "agents" irrespective of the sector in which they are employed. The lack of distinction and surrounding confusion has resulted in charging errors and heightened the risk of increased litigation over whether various quasi-public bodies are sufficiently public under the definition of the 1889 Act. The distinction between the two is significant as in certain circumstances there will be a presumption of corruption.
- Inconsistencies And Uncertainties In Terminology
The common law and both Prevention of Corruption Acts have applied different terminology and scope for the term bribery which inevitably gives rise to uncertainty as to the correct application of the offences.
- Lacuna Where Bribery Is Committed Outside England
Despite the fact that the Anti-terrorism, Crime and Security Act 2001 has extended the domestic courts' jurisdiction to acts of bribery committed abroad by UK nationals or bodies incorporated under UK law, this extension does not apply to foreign nationals committing bribery offences abroad, even if those nationals are domiciled or habitually resident in England and Wales. It is a perverse state of affairs that people who reside and conduct their business affairs in England and Wales cannot be vulnerable to prosecution whereas UK nationals would be vulnerable to prosecution, for exactly the same conduct. This disparity has provided a clear lacuna for foreign nationals.
Contents Of The Bill
Broadly speaking, a "bribe" may occur where a "financial or other advantage" is given or received where this is associated with an "improper performance" of a work related function. As a result, the Bill would cover not only cash inducements, but gifts or other advantages as well.
In addition to creating offences that can be committed by individuals, the Bill proposes to create an offence that can be committed by "commercial organisations".
The Bill will introduce four new offences as follows:
- Promising or offering a bribe, which will be known as "active bribery". This offence will concern the conduct of the payer. The payer must be proven to have offered or promised an advantage to the recipient to induce the recipient to perform a relevant function irrespective of whether the person to whom the advantage is offered is the same person who it is intended will perform the function improperly.
- Requesting, agreeing to receive or accepting a bribe will be known as "passive bribery". As opposed to active bribery, passive bribery concerns the conduct of the recipient and they must be shown to have requested or agreed to receive an advantage intending that a relevant function be performed improperly.
- Bribing a public official. Under the bill "public official" is defined broadly and will include individuals who exercise a public function to countries other than the UK. In other words a discrete offence of bribery has been created.
- Corporate offence of "negligent failure to prevent bribery" by persons working on behalf of a business. This corporate offence will be limited to instances of active bribery on the part of a person associated with the business with the intention to secure or retain business. This offence will be committed if the company's employees or agents bribes another person, the bribe was made in connection with the company's business and members of the company's anti-bribery compliance function negligently fail to prevent the bribe.
There is no need for the employee or agent to have been prosecuted for bribery, provided that the employee or agent is or would be guilty of the offence of giving a bribe or of bribing a foreign public official. Thus, the offence creates a form of vicarious liability in order to deter companies from giving direct or indirect support to a culture of bribery on the part of those with whom they do business.
The Bill broadly defines the term "relevant commercial organisation" to include any organisation in the UK, or company or partnership which carries business in the UK. However, companies are not left completely exposed by the introduction of this new provision as it is proposed that there would be a defence to this offence where a company has "adequate procedures" to prevent persons performing services for the company form committing bribery.
The offence would be punishable by fines.
In addition to the new offences created under the Bill, the other key provisions to note are:
An extended extra-territorial jurisdiction to prosecute bribery committed abroad by persons ordinarily resident in the UK as well as UK nationals and UK corporate bodies; thus every "ordinary resident in the UK" would be subject to the same criminal law;
- Attorney General's Consent
This will no longer be required to bring proceedings for a bribery offence, instead, consent from the Director of the relevant prosecuting authority will be required; and
A maximum penalty of ten years' imprisonment for all new offences, with the exception of the corporate offence, which will carry an unlimited offence.
The Bill currently extends to England and Wales and Northern Ireland. The subject matter of the Bill is devolved to Scotland. However, the Scottish Government has signalled that the Scottish Parliament will be asked to consent to the inclusion of provisions to extend the Bill's remit to Scotland.
The potential ramifications of the Bill, particularly on UK companies are significant. Organisations will need to review the adequacy of their internal procedures to prevent bribery and ensure that appropriate checks are carried out during the processing of payments and that their compliance, training and other anti-bribery measures are adequate. It has been observed that strict penalties and corporate liability and absolute offences will result in more companies tightening internal controls. However, the International Chamber of Commerce has observed that "the UK will not wish to have "weaker" laws against bribery than other countries. But it should not have a more draconian and less sophisticated law that would prejudice the international competivity of business". In the looming weeks which will inevitably involve redrafts of the Bill, it seems likely that the UK will achieve a positive result in balancing the need to give the Bill "teeth" whilst not compromising the competitiveness of business.
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