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Mounting pressure over the last eleven years for reform of the law relating to bribery and corruption in the UK (effectively since the 1998 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions) has resulted in a new Bribery Bill which is expected to be enacted within the next Parliamentary session.
The proposed legislation represents a long awaited simplification of the law on corruption and makes the UK compliant with its international obligations.
It will have a major impact on the way corporates connected to the UK manage their international business.
The four principal (categories of) offences, as the Bill currently stands (it could change as it goes through parliament) will be:
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1 . Offence of bribing another person
Offence (1) is concerned with the conduct of the payer. The payer must be shown, directly or through a third party, to have given, offered or promised an advantage to the recipient with the intention to induce the recipient to perform a relevant function or activity improperly or to reward the recipient for such conduct. It matters not whether the person to whom the advantage is offered is the same person who it is intended will perform the function improperly.
2 . Offences relating to being bribed
Offence (2) is concerned with the conduct of the recipient. The recipient must be shown to have requested, agreed to receive, or accepted an advantage intending that, in consequence, a relevant function or activity should be performed improperly. It does not matter whether the recipient receives or accepts the advantage directly or through a third party or whether it is for the recipient's benefit or that of another.
3 . Bribery of a Foreign Public Official
Offence (3) comprises a new offence if it can be proved that an advantage not legitimately due was offered, promised or given to an FPO with the intention:
- of influencing the FPO acting as an official; and
- of obtaining or retaining business
4 . The new corporate offence: failure to prevent bribery
A commercial organisation (a corporate or a partnership) could be guilty where:
- a bribe has been made by a person performing services for or on behalf of another and the bribe was in connection with that other's business; and
- the person or people responsible in the organisation for preventing bribes has been negligent in that duty.
The offence would be punishable by a fine. 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.
It is a defence for the organisation to show that there were adequate procedures in place designed to prevent employees or agents committing bribery. However, this defence will not apply if the person whose responsibility it was to prevent the bribery was a director, manager, or equivalent person within the organisation.
The availability of this defence is an important limitation on liability for the offence and demonstrates that the key cause for concern is companies that fail to make continuing and systematic efforts to ensure that active bribery is not committed on their behalf.
The penalties on conviction would be the same as for fraud including, in the most serious cases, a sentence of up to ten years' imprisonment following conviction on indictment.
In terms of territorial application, the offences under the proposed legislation will be committed when any act or omission which forms part of the offence takes place within the jurisdiction or where any person 'closely connected with the UK' e.g. citizens, those ordinarily resident, bodies incorporated, does any act or
Some examples of the application of the law are as follows :
- For a person to be convicted of bribery (either offence 1 or 2) the prosecution would have to establish 'improper' performance of a relevant function or activity. The Bill defines improper in terms of breaches of an expectation that the function or activity would be performed in 'good faith', 'impartially' or, when that function is being performed by a person in a position of trust, 'consistently with that position of trust'. The test of what is expected is 'a test of what a reasonable person would expect'.
When deciding whether a payment in an overseas jurisdiction is improper, who will represent the reasonable person by whose standards the behaviour will be judged? Who is to judge whether something is being done 'in good faith', 'impartially' or 'in breach of a trust' in that other jurisdiction?
- The Law Commission recommended that it be a defence to an allegation of bribing a foreign official for the payer to show that he reasonably believed he was legally obliged or permitted to do so by the law of the foreign country, bearing in mind any steps the payer had taken to find out the true position. This defence has not been adopted in the proposed legislation. Any payment made to any foreign official with a view to influencing them in that capacity will be capable of being found to be a bribe if it is not 'legitimately due', whatever may be the view of the payer however reasonably held.
- The new corporate offence will be based upon the negligent acts of the person 'within the organisation who is responsible for preventing the commission of the offences of paying bribes' (Offences 1 and 3: note not 2) or if no such person exists, any 'senior officer' of the organisation. But by reference to what standards will the court assess negligence? And by what standards will the court assess 'adequate procedures'? It is anticipated that the government will provide guidance.
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