ANTI CORRUPTION LEGISLATION IN THE UK – ITS SUCCESS AND FAILURES
Author: Preeti Selvam, St Rock College Of Law.
The strict liability offence of failing to prevent bribery under Section 7 of the Bribery Act 2010 is perceived to be easier to prosecute as it does not require the prosecutor to establish intent on the part of a company’s directing mind. The Serious Fraud Office (SFO) has confirmed that there are around 60 ongoing investigations, and additional resolutions are expected with corporates or prosecution under Section 7 of the Bribery Act.
In 2015 Sweett Group became the first company to plead guilty to violating Section 7 of the Bribery Act. In March 2018 Southwark Crown Court found Skansen Interior Limited guilty of violating Section 7. Under a DPA, a prosecutor will not commence criminal proceedings pending successful compliance with a range of conditions such as:
Prosecution of individuals
DPAs are not available to individuals; therefore, even if a company has entered into a DPA, its employees can still be prosecuted. This area is expected to see increased attention in the coming years with the ongoing investigation into the conduct of individuals following the Rolls Royce DPA.
Increased coordination and cooperation with other regulators
The government has indicated that is it committed to tackling economic crime and has appointed a new minister for economic crime within the Home Office. According to the government’s anti-corruption strategy, it intends to:
- Common law offences of bribery and accepting a bribe;
- The Public Bodies Corrupt Practices Act 1889;
- The Prevention of Corruption Acts 1906 and 1916; and
- The Anti-terrorism Crime and Security Act 2001.
The following anti-corruption conventions apply in the United Kingdom:
- The EU Convention on the Protection of the European Communities’ Financial Interests 1995;
- The Organisation for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions 1997;
Specific offences And Restrictions
The key bribery offences contained in the Bribery Act 2010 are:
- Bribing another person (Section 1);
- Receiving a bribe (Section 2);
- Bribing a foreign public official (FPO) (Section 6); and
- Failure of a commercial organisation to prevent bribery (Section 7).
Bribing another person and receiving a bribe
An offence has been committed if the bribe payer:
- Intends the offer, promise or giving of an advantage to bring about or reward another person’s improper performance of a relevant function or activity; or
- Knows or believes that the acceptance of the advantage offered, promised or given, in itself, constitutes the improper performance of a relevant function or activity.
- Of a public nature;
- Connected with a business;
- Performed during a person’s employment; or
- Performed on behalf of a company or another body of persons.
Bribing a foreign public official
The briber must intend:
- that the advantage given or offered would influence the FPO in the performance of his or her FPO duties; and
- to secure business or obtain a business advantage.
- international organisations.
Failure of a commercial organisation to prevent bribery
A commercial organisation is guilty of an offence if a person associated with it bribes another person with the intention of obtaining or retaining business or a business advantage for the organisation. An ‘associated person’ is someone who performs
- reasonable; and
- undertaken in good faith.
However, there may be instances where such expenditure could fall under Sections 1, 6 or 7 of the act. Whether it does so is a question of fact in each case.
Liability & Scope of liability
Sections 1, 2 and 6 of the Bribery Act
Individuals may be liable for:
- giving bribes (Section 1);
- receiving bribes (Section 2); and
- bribing a foreign public official (Section 6).
Section 7 of the Bribery Act
Section 7 creates the strict liability offence of failing to prevent bribery, which can be committed only by a ‘relevant commercial organisation’ defined as:
- a body incorporated or a partnership formed under UK law, irrespective of where business is carried out; or
- any other body corporate or partnership (wherever incorporated or formed) which carries on a business or part of a business in the United Kingdom.
Offences under Sections 1 and 6 of the Bribery Act include being liable by way of:
- counselling; or
Whistle-blowing and self-reporting
- behavior that harms or is likely to harm the reputation or financial well-being of the firm.
There is no specific incentive regime for whistleblowers (unlike in the United States) and it is unlikely that the United Kingdom will adopt one in the near future.
- provided access to over 30 million documents and to witness statements and witnesses;
- provided witness interviews on a limited waiver basis;
- agreed to the interviews being audio recorded when asked by the SFO; and
- allowed the SFO to interview witnesses before they were interviewed by the company.
Dispute and risk management
Deferred prosecution agreements
The Crime and Courts Act 2013 introduced deferred prosecution agreements (DPAs) into English law on February 24 2014. DPAs are voluntary agreements between prosecutors and:
- partnerships; or
- unincorporated associations.
Whether a company can prove that it had adequate procedures will be a matter of fact in each case. Guidance published by the MoJ states that procedures put in place by an organisation to prevent bribery should be informed by six principles:
Record keeping and accounting
The obligation on companies to keep adequate accounting records is governed by Part 15 of the Companies Act 2006.
- show and explain the company’s transactions; and
- disclose with reasonable accuracy, at any time, the financial position of the company (Sections 386(2)(a) and (b) of the Companies Act).