7 Other Matters
notes or Code of Practice
155. Since the criminal law of corruption derives
its normative standards (its requirements as to how people should
and should not behave) from pre-existing civil law obligations,
the Committee does not regard the criminal law of corruption as
being principally a mechanism for laying down minimum standards
of conduct, whether in public life, in business, in local government
or elsewhere. Rather, the Committee regards the criminal law of
corruption as a means of punishing some of the grosser breaches
of standards that should be laid down elsewhere. In many areas
in which corruption is possible there is already relevant guidance
available. The major area in which a Code of Practice is required
as a matter of urgency is to give guidance to businesses attempting
to procure contracts overseas. Lord Falconer told us that an Approved
Code of Conduct might be helpful.
As the CBI told us:
"There will be a need for very clear guidance
on these points and I can see the case that some of the fairly
specific and technical issues we referred to could lend themselves
very well to guidance".
156. Consideration could be given to the possibility
of including in the Bill powers to make or approve Codes of Practice.
This would enable the Government to put any Guidance before Parliament
for approval as a Code of Practice. Whilst such a Code would not
be legally binding, it would have persuasive force in encouraging
companies to introduce procedures which ensured compliance. The
overriding consideration is that the Bill should - on its face
- clearly establish what is and what is not corrupt.
of corruption law to the Proceeds of Crime Act 2002
157. The relationship between the Bill and the Proceeds
of Crime Act has been raised in some of the evidence.
There are the issues of reporting requirements and whether confiscation
should apply to the net or gross sum involved in corruption.
158. On reporting requirements, an offence
under the Bill would be a predicate offence for the purposes of
the Proceeds of Crime Act 2002, generating a reporting obligation
on accountants and auditors within the regulated sector to report
any instance of corruption by or against a UK client. Concern
was raised as to the weight of this obligation in the absence
of an exception as de minimis or for facilitation payments.
159. Confiscation orders and civil recovery proceedings
are both computed gross.
No deductions are allowed for expenditure incurred by the criminal
in the commission of crime. This makes a certain sense when applied
to a drug dealer's expenses (though even the drug dealer is allowed
to deduct from his liability to tax expenses which are not themselves
This has significant consequences in the case of corruption. It
means that in the case of a corruptly acquired contract all the
benefit income of the job is vulnerable either to a confiscation
order or to civil recovery proceedings. This will create significantly
greater uncertainty and risk in commercial transactions.
160. For example, by bribing some of the directors
of A Plc, B Plc is able to take over A Plc. The entire company
(A Plc) and/or all its property is liable to a confiscation order
or to civil recovery proceedings under the Proceeds of Crime Act
2002. Anyone who has extended unsecured credit to A Plc will lose.
161. Although this is not explicitly covered by the
Bill, the Committee considers that both Houses may wish to debate
whether this is wrong in principle and whether it would be a violation
of the First Protocol to the ECHR.
166 Q537 Back
Q704 (Mr Cridland) Back
Ev 145-148 para 3(c) and 12 and 13 Part 4 (18-22) PricewaterhouseCoopers
DCB 16. Back
Ev 147 DCB 16. Back
Ev 147 para 21 Proceeds of Crime Act 2002 ss. 76(4) & (7),
Proceeds of Crime Act 2002 s.242 respectively. Back
Ev 149 Back