With the Bribery Bill due to come into effect by the end of the year, Stephen Platt explores what the new legislation will mean for public officials, company directors and offshore practitioners
On 2 October 2008 the UK Law Commission provided a report to Parliament on ’Reforming Bribery’ together with a draft bill. The bill finally received Royal Assent on 8 April and will come into effect this year.
The offences in the bill are divided into three types: general bribery offences, bribery of foreign public officials and the failure of commercial organisations to prevent bribery.
There are six general bribery offences. The first two relate to offences under Section 1 concerning the person who allegedly commits bribery by, in Case 1, offering or promising a financial or other advantage (in other words, a bribe) intending to induce or reward a person to perform a function improperly or reward them for doing so; or in Case 2, by offering a bribe knowing or believing that the acceptance of the advantage would itself constitute improper performance. It does not matter if the advantage is through a third party.
The remaining four general bribery offences under Section 2 relate to the person who allegedly accepts the bribe: Case 3 is where a person requests or agrees to receive or accepts a bribe intending that, as a consequence, a relevant function or activity should be performed improperly by them or another; Case 4 is where a person requests or agrees to receive or accepts a bribe, which in itself constitutes the improper performance by them of a relevant function or activity; Case 5 is where a person requests or agrees to receive or accepts a bribe as a reward for the improper performance by them or another of a relevant function or activity; and Case 6 is where, in anticipation of or in consequence of requesting, agreeing to receive or accepting a bribe, a relevant function is performed improperly by them or another at their request or with their assent or acquiescence.
It does not matter if the bribe is through a third party or for the benefit of a third party. It does not matter if the person knows or believes that the performance of the function or activity is improper, or if performed by a third party that the third party knows that the performance of the function or activity is improper.
Sections 3, 4 and 5 provide the definitions for the general bribery offences. According to Section 3, “the function or activity to which the bribery relates” is covered if it falls within one of four types of activity (is of a public nature, connected with a business, including a trade or profession, performed in the course of employment, or by or on behalf of a body of persons whether corporate or unincorporated) and meets one or more of three conditions of the person performing the function or activity (expected to perform it in good faith, impartially, or is in a position of trust).
Arguably, the bill becomes controversial in Section 3 (6), which states that a function or activity is relevant “even if it (a) has no connection with the United Kingdom, and (b) is performed in a country or territory outside the United Kingdom”. Section 5 then states that the test of what is expected is an objective test, that is, “what a reasonable person in the UK would expect in relation to the performance of the type of function or activity concerned” and that, according to Section 5 (2), “any local custom or practice is to be disregarded unless it is permitted or required by the written law applicable to that country or territory concerned”.
The remaining individual bribery offence is set out in Section 6 and deals with the “bribery of foreign officials” (being someone who holds a legislative, administrative or judicial position of any kind, exercises a public function, or is an official or agent of a public international organisation).
To be charged under Sections 1, 2 or 6, relating to an alleged offence committed outside the UK, the offender would need to be at the time of the offence a British citizen, a British overseas territories person or a British national (overseas). The law will thus focus the minds of offshore practitioners in the British Crown Dependencies.
As the Law Commission noted at paragraph 8.12 of its report, under the various international conventions ratified by the UK, “the only legal obligation that the UK has in relation to bribery committed outside of the UK is to take measures to criminalise extraterritorial acts of bribery that are committed by natural persons who are
Guilt by omission
In relation to the corporate offence, this concerns the alleged failure of a commercial organisation to prevent bribery. Again, somewhat controversially, pursuant to Section 12 (5), an offence is committed irrespective of whether the acts or omissions that form part of the offence take place in the UK or elsewhere and, pursuant to Section 12 (6), even where no act or omission that forms part of the offence takes place in the UK, proceedings for the offence may be taken at any place in the UK.
Equally controversially, pursuant to Section 7 (5), the legislation covers a firm or entity formed under the law of a country or territory outside the UK. It also extends to a corporate body or partnership, wherever formed, that carries on a business or part of its business in the UK.
There is a defence provided by Section 7 (2) if the commercial organisation can prove it had in place “adequate procedures” designed to prevent persons associated with it from undertaking such conduct. These are not defined in the bill. Section 9 states that the Secretary of State must publish guidance about such procedures.
Although the introduction of such procedures will no doubt impose an additional cost on business to provide evidence of such compliance, not to do so will risk conviction and a possible heavy penalty, as it is a strict liability offence and the fine is unlimited.
Stephen Platt is chairman of BakerPlatt Group