13 January 2009
The Law Commission’s report proposes wholesale repeal of the current legislation as well as the common law offence of bribery. It recommends introducing two new general offences of bribery, one concerned with giving bribes, and the other concerned with taking them. These offences would be confined to activity of a business, professional or public nature but the distinction between the public and private sectors which exists in the law as it currently stands, whereby there is a presumption of corruption in relation to gifts, payments or other advantages conferred on public officials, would be removed. While the Anti-Terrorism, Crime and Security Act 2001 extended the domestic courts’ jurisdiction to acts of bribery committed abroad by UK nationals and companies, it did not make changes to the underlying offences. The Law Commission recommends that the two proposed general offences would also apply to acts done outside the jurisdiction where the person accused is a British citizen, a company incorporated in any part of the UK, or a foreign national who is “ordinarily resident” in the UK. It also recommends introducing a new separate offence of bribing a foreign public official. It would be a defence to this offence, however, for the accused person to prove that he or she reasonably believed that what he or she did was required or permitted under the laws of the foreign official’s country. In respect of corporate wrongdoers, the report recommends a new bribery offence, applicable to companies and limited liability partnerships registered in England and Wales, of negligently failing to prevent bribery by an employee or agent. It would be a defence for the company to show that it had adequate procedures in place to prevent bribery offences being committed by its employees, which might include, for example, the provision of appropriate staff training and written guidance detailing the company’s policies and procedures to combat corruption. Companies can also reduce their risk exposure by making sure those with whom they do business have a similar culture of compliance within their organisation. Further, the Commission has recommended that it should be possible to hold directors and senior managers individually liable if they consent to or connive at the commission of bribery offences by their organisations.
The move to target corporate wrongdoers in the proposed new legislation should also be seen in the wider context of other powers which can be used to tackle corporate corruption introduced in recent years. These include the power to make Serious Crime Prevention Orders plus the imposition of an authorised third party to monitor a company’s compliance with good business and ethical standards, as well as powers under the Proceeds of Crime Act 2002 to recover property obtained by unlawful conduct even where there has been no conviction for a specific criminal offence. The Law Commission’s proposals, if adopted in legislation, would represent a great simplification of the current law, bringing it more closely in line with the legislation of other jurisdictions, including the U.S. Foreign Corrupt Practices Act 1977. The maximum penalty for individuals would also be increased from seven years’ imprisonment to 10 years, in line with fraud offences. Companies face an unlimited fine, as well as the prospect of having to disgorge profits made as a result of corrupt activities and the risk of an external monitor being imposed at the company’s expense.