Taken before the Joint Committee on the Draft Corruption Bill on Monday 2 June 2003
Vera Baird Bernstein of Craigweil, L.
Slynn of Hadley, L. (Chairman)
Witnesses: PROFESSOR MARK PIETH, Chair of the OECD Expert Group on Bribery in Commercial Transactions, examined.
Q348 Chairman: Professor, we are very grateful to you for coming to help us in this inquiry. We understand that there is a time limit because you have to catch an aeroplane but thank you very much for coming. We understand that you are the professor of criminal law at the University of Basle and that you are chairman of the OECD Expert Group on Bribery in Commercial Transactions. Obviously, we want to ask you quite a bit about the OECD and some of the other international conventions which we want to look at when examining the terms of this Bill. We have had a bit of difficulty in getting some of our witnesses perhaps to identify what exactly "corruptly" involves. That is at the heart of this inquiry. We have been told by a famous judge that any jury would know exactly what it means so you do not need to define it. What do you consider to be the key ingredients, the key aspects, of bribery or corruption offences? Is it simply dishonesty, secrecy, or are there other factors that matter?
Professor Pieth: I would like to thank you for this opportunity. It is well viewed by the OECD that we have a chance to talk before the law is enacted in some states. The question you are referring to is a very specific one and, from my view, it only arises in the British context because if one followed the wording of the Convention we use a different word. We use "undue payment". The advantage of that term is it is an objective term saying that this is not, for instance, what people are entitled to receive like tax collectors will take taxes or employees will receive a salary. Clearly, undue payment means it is illegal from the beginning. Your concept of "corruptly" puzzles us quite a bit. That is one of the difficulties we have. I have understood "corruptly" to mean "intentional". So far we have no problem but as far as you use the concept of "corruptly" to take out other bits and pieces I think it is rather vague. I am not an expert in common law. The role we have in the OECD is quite a different one. We work under a concept called functional equivalence which basically means you do whatever you have to do under the obligations of the treaty in your own legal spirit, with your own approaches. We just test whether you meet the goal at the end.
Q349 Chairman: If one gets away from the actual wording of the OECD Treaty and the other international treaties, you ask yourself what is "corruptly"? What does it involve? You said "intentionally" is one aspect of it.
Professor Pieth: To go through the concept that we are applying, we first of all consider bribery. You know that we are just talking about the supply side of bribery in the OECD; we are just talking about active bribing of a foreign, public official. You have two parties, one who promises or pays to someone else for an act or omission. The advantage that he has to pay or deliver is an undue advantage. That is the qualifier we use and require. You can do what you want with it but we will certainly come back and ask questions if you write "corruptly" into your law, because the concept of "corruptly" is, for us, too vague. It gives you much too much leeway to throw out cases we do not want you to throw out.
Q350 Chairman: It is important that we have an idea of corruption. Otherwise, we cannot say whether this Bill is achieving what we think it should be.
Professor Pieth: Yes. The point is that somebody promises illegal payments. That is to say, payments the recipient is not entitled to, for specific behaviour in his profession, be it acting or omitting. We insist on that being illegal. Otherwise, you capture perfectly legal activities and that is one of the problems I have with your law. It is very broad at the beginning. Clauses one and two capture next to everything and then you have to, in six and seven, try to take bits and pieces out of it which are absolutely normal behaviour. We would say why do you not use the convention that says very clearly, in five lines, what is to be forbidden. 34 countries in the world representing all your competitors in the international terrain have simply done that. They have just copied it. I have no quarrel with you in using a different concept, an agent concept. That is up to you, but we will test in the end whether we are convinced. The burden of proof is on you. You prove to the OECD that you are choosing an adequate manner to transpose what you have been signing up to.
Q351 Chairman: As professor of criminal law, in your concept of "corruptly", can you corrupt or be corrupted or can you bribe or be bribed honestly? Does there have to be an element of dishonesty in it?
Professor Pieth: We do not make that distinction. We say if somebody meets the objective requirements here -- promises, pays -- to somebody who is a foreign, public official with an undue advantage, we are not concerned whether that is honest or dishonest. It is a speciality of British law that you have a concept of dishonesty. Frankly, we are not bothered. We want to see that you capture the cases that you have signed up to. The Convention gives you the framework. We will test you against the Convention. Frankly, you have fallen through the exam once, in the first round. The second round you have slipped through but you are trying to take away that legislation that you passed and we are giving you, hopefully, a third chance. We hope to reach a common result but the difficulty is that we are getting a bit restless because we are thinking what is the reason that Britain, as one of the only countries, has such difficulty with an issue that is so fundamental in international business? Are you protecting your business for some reason?
Q352 Lord Waddington: One thing is clear, is it not? That is that the idea of an undue advantage is well established in a number of international conventions. Is it right that you get this concept of an undue advantage both in the OECD Convention, in the EU Convention and in the Council of Europe Convention?
Professor Pieth: That is perfectly right. Additionally you find it in one of your common law rules in the reports. In the common law language in case law, you use the word "undue". You do not use the word "advantage", but something that amounts to the same thing.
Q353 Lord Waddington: Can I take it a stage further? None of those conventions, the OECD Convention, the EU Convention and the Council of Europe Convention, envisages that it should be an offence merely to offer money to the agent of a government or a public body. They all envisage that there has to be something more. There has to be more than the offering of money. There has to be the offering of money with some improper motive in order to get an undue advantage. Is that correct?
Professor Pieth: It is. There is an element already on the objective side that this person is not entitled to the money because we want to exclude with the word "undue" all the cases where somebody is allowed to receive taxes or a salary. It is not only the subjective perspective of doing something unduly or corruptly; on top of it, the money is not due.
Q354 Lord Waddington: Do you not therefore find it surprising that this Draft Corruption Bill seeks to criminalise the payment of money to an official without any guilty intent at all?
Professor Pieth: If I understand the Bill rightly, in all fairness, one has to say it first defines the crime very broadly. It has to specify later on in clauses five and six and take out the cases that were not intended.
Q355 Lord Waddington: We have already had, for instance, an adviser with a very prominent firm of solicitors in the City of London saying that this Bill would criminalise the payment of a toll to an official collecting money at the entrance to a toll road. There is nothing whatsoever, even if you look in clauses six or seven, to suggest that it would not be criminal for that agent of that public body to receive a payment. This Bill is odd, is it not, in that it seeks to criminalise the payment of money to an agent without any improper motive at all?
Professor Pieth: If what you say were the case, we certainly would find it strange. I was trying to give six and seven, as far as possible, the benefit of the doubt. I must admit that six and seven are, for me, unintelligible as a continental lawyer, but maybe your lawyers can do better. I have the problem that our requirement is that not only your lawyers and your jurors but your exporters understand the law. Anything below that will not be accepted by the OECD.
Q356 Chairman: You emphasised earlier the objective nature of this as far as your concept of corruption is concerned. There has to be, has there not, a mental element?
Professor Pieth: The mental element is the intent and even there it would be enough that somebody is speculating with the idea that somebody could misunderstand or understand the right way. The mental element is toned down very much in our concept. We are centralising the objective nature and you are perfectly right. You should not qualify perfectly legitimate behaviour because then you are making what we are aiming for ineffective. Our problem is not that you might be too broad. Our problem is basically that, in this wording, it is very difficult to understand and maybe even more so we are lacking one element which does not come out very clearly. The one requirement we are looking for is that it says the active bribery of a foreign, public official is captured. We are reading that this is the case but we had difficulties with the situation in 1906. We were not convinced that this was really the case fully. We had questions to judges and Members of Parliament. Now in the Prevention of Terrorism Bill 2001, I think we have the idea. You were more explicit there. You did capture explicitly foreign, public officials. Here again, it is so broad that it does not say anything. We will be puzzled and we have doubts that your engineers, to take an example, know what they have to do. That is the point where we are going to dig in.
Q357 Chairman: What you have said raises two things. The first is that following on from the note we had from the OECD secretariat they say that a statute which is so broadly drafted and theoretical cannot or is unlikely to achieve the objectives of the OECD Convention. How would we get away from that objection on the part of the OECD?
Professor Pieth: We have two interests. We have the interest that you, as fast as possible, fulfil the requirements and we have the interest obviously that you fulfil them fully. We have been asking for that in what we call phase 1B, the document you have at your disposal. We will soon have new legislation. There are two ways, basically. We have no quarrel with the approaches you take because that is your own responsibility. That is not our issue. You could save a lot of the situation if you inserted one clause making it very clear that the foreign, public officials are covered. Then I would only have about five more difficulties. I have six major difficulties with your law as it stands at the moment. That would be our three star deficiency, which would mean that we would have to express in some diplomatic language that we would have to re-examine you again under this phase. This would be very difficult because your counterparts in Nigeria and Kenya etc., are looking at this situation. You can offload texts on the internet and they are reading that the UK, next to Japan, has one of the only laws that flunked the exam under phase one.
Q358 Chairman: Apart from the fact that the Bill does not specifically refer to bribery of foreign, public officials, why is this Bill so broadly drafted and theoretical and therefore not one which practically can be enforced?
Professor Pieth: It appeared to us when we read it that in clauses one and two near to everything is captured and later on you have to take things away again. I am taking a salary from the university. Is that corruption? I think it is difficult if you bring that remotely into the area of corruption. People are bound to misunderstand. There is a certain hesitation from outside to come in and say, "Draft your laws differently". I have with me this folder and all the other countries have simply picked up in one way or the other the language of the Convention. Take Australia, Canada and the US. The law is a bit more complicated but most common law countries simply replicate what you have in the Convention.
Q359 Lord Carlisle of Bucklow: Do they all use the word "undue"?
Professor Pieth: Yes, mostly.
Q360 Lord Carlisle of Bucklow: Not "dishonest" but "undue"?
Professor Pieth: "Undue" and your own law used "undue" at the time of the common law offences. You have it in your own legal practice. I could find it in the document, in phase 1B's report. It mentioned under common law a reference to undue advantage or something similar.
Q361 Lord Carlisle of Bucklow: Do the words "undue advantage" have any conception in quantitative terms as well as qualitative terms? Is there meant to be implied a fairly substantial advantage in the word "undue" or is it merely that it is not an advantage to which the person is due and it is of the most minimal nature?
Professor Pieth: Not at all. It does not give you permission to have facilitation payments as such. Some countries, I understand, have such exceptions for small ----
Q362 Lord Carlisle of Bucklow: They have separate exceptions?
Professor Pieth: Yes, separate exceptions, and they are very explicit. They have to be specific. We insist on the word "small". We talk about £200. As soon as you are above £1,000, we believe you have to run the case.
Q363 Mr Garnier: To come back to the question of undue advantage or payment, it is relatively easy to work out what is an undue advantage or payment in the United Kingdom, Switzerland, Germany or France. What happens where the activity might lead to an accusation of undue influence or advantage in a northern European country but which, under the culture or law of the country in which the foreign officials live and work, would not be considered to be undue influence?
Professor Pieth: There is an exception in the Convention which says, if behaviour is permitted by written law, you are allowed to do that. If there is a law under the common law system that amounts to an equivalent to written law, which means you have to have firm prejudice and all the requirements, it is not just that you have a habit. It is more than that. It is an accepted habit. Then you would be able to have an exception but those are very rare cases. We are talking about corruption that is almost always not permitted worldwide, except that it is not usually prosecuted. That is the reason why countries in the north are trying to pick up those cases from here.
Q364 Mr Garnier: I can understand it is in our interests to wipe out corruption and bribery and improper conduct throughout the world economy but are we going to be accused of imposing upon countries where it may be said, "This is the way you do business. We all do it. You cannot do business unless you do this" our standards which may not be the ones which they wish to have imposed upon them?
Professor Pieth: I can see the position that you are referring to but in the ten years I have been working on this topic, in this role, I have increasingly come to the point -- and I am just back from an intergovernmental conference in Seoul yesterday -- where again it was reiterated from the perspective of the south that we do not have a culture of corruption and we do not want to condone corruption. It is your job to try to help stop it. We might have fringe issues, difficult, grey zones where we are talking about extortion but by saying "extortion" I am talking about duress, if at gunpoint you were asked to do something. If it is merely that you will not do business, the rules of the game are changing. There is no exception that we would accept for so-called solicitation because we do not give it to the French or the US so why should we give it to you?
Q365 Mr Stinchcombe: Under English criminal law, as I understand it, most crimes have three elements. They have the mens rea, the mental element in the mind, the actus reus, the physical act, and then the absence of a defence. If the actus reus in your analysis was the giving of an undue advantage, I wonder what the guilty mind element should be to conform with the OECD Treaty in particular where it might be something like the making of a payment with the intention wrongly to influence someone either to do or not to do something.
Professor Pieth: I would be shorter. It is enough to have the knowledge of what you are doing. You do not need the "wrongly" from our side because that is already contained in the objective side. If you know that it is undue, it is by definition wrong. You are aware of the wrongness of it; you do not need to say "wrongly". If you have "wrongly" in it, we would ask, "Are you adding a further qualifier here?" For the objective element you have to have a qualifier of "undue" in some way or you can do it by exception.
Q366 Mr Stinchcombe: Your definition would be something like "knowingly to confer an undue advantage"?
Professor Pieth: Yes. You can look at Canadian or Australian laws and you will find exactly that kind of concept. I am a bit hesitant because, if that were an excuse to wait another two years to legislate because you have to redraft everything, I would feel more comfortable if you ran your legislation the way it goes, even though we would have difficulties as continentals in understanding it; but that you be explicit on the transnational bribery element of a foreign, public official. If you want, I can give you a very brief idea of what are the other points that I am really at odds with.
Chairman: Perhaps the Baroness could put her question and then we will come on to that.
Q367 Baroness Whitaker: It is a question about this foreign, public official business and it concerns where there will be a need for mutual legal assistance. With your knowledge of other legal systems, can you tell us if it would be possible, on the text of this Bill, to demonstrate to a foreign investigating agency or a judge what our offences are and what the exceptions are? Could they be translated into Polish, for instance, or Moldovan?
Professor Pieth: They could in the same way as they could be translated to your jurors but it would take quite a bit of effort to do so and you would raise a lot of issues that would leave your opposite number puzzled. You would open the way for defence counsel to say, "Excuse me. We will go back on a certain term to the old situation in 1906." That is where the OECD comes in and says, "You will have a very difficult job to prove beyond a reasonable doubt to us that you have really covered the Convention." The situation is that the balance of proof is with the country in this process.
Q368 Baroness Whitaker: It might not work in the international, legal setting?
Professor Pieth: It might not.
Q369 Lord Campbell-Savours: Did I hear you correctly? Did you say, "You are protecting your business"?
Professor Pieth: This is a mere hypothesis. I am certainly not accusing you.
Q370 Lord Campbell-Savours: What did you mean by that?
Professor Pieth: It is an absolute hypothesis. I wanted to raise that point when coming to the question of consent by the high ranking law officer. That is a point which puzzles us a lot. So far, we have been giving you time to reconsider it but we have a clause saying there is, under no circumstances, the possibility to withdraw action on a case for economic, political or whatever reason. We are saying to ourselves, "The Crown Prosecution Service knows why they go ahead and they have their rules. Why would they need an additional political officer to tell them when to stop a case?" What creeps into the discourse is a very uneasy feeling that there is a possibility which is dangerous and we would have difficulties saying, "This meets the requirements of Article 5 of the Convention." We would suggest trying hard to abolish the consent. I am aware that you have a problem and that you might want to attach the consent to the prosecution of an MP. We would have no problems there. If you attach it to every case here, we would feel anxiety.
Q371 Chairman: Are you saying that this Bill should make it absolutely explicit that it covered all attempts to bribe foreign officials in the way that the OECD Convention appears to do? Is that one of the criticisms? Not only does it not mention public officials; it does not lead to the conclusion that it would cover any bribery of a foreign official. Ought that to be explicit?
Professor Pieth: Obviously this would be the easiest solution for us, if you had one, short clause picking up the Convention language. We read with interest what Australia and Canada have done.
Q372 Chairman: From your point of view, would it be sufficient if the government stated, "This is what we intend"? What its effect would be in a court of law may be different but would that be sufficient from your point of view?
Professor Pieth: For our purposes, it would be probably far preferable. I am aware that with this Bill you are trying to meet other goals as well, domestic goals, and you are trying to pick up other instruments. I understand that you might take such an approach. That is where I would like to be diplomatic. I want to see it working. That is why I would say you have two choices at the moment. If you want to be quick, you need to add a clause making it absolutely clear that even for the engineer the bribing of a foreign, public official is covered here, even though this might be repetitive. There are a lot of other things that are not, strictly speaking, necessary. Alternatively, you can choose the way that all your common law colleagues have been choosing, to write a very simple, straightforward clause, half a page, saying what is forbidden. I can leave the examples here. They are on the internet and we have pulled out a few of them for these purposes. Some of them are common law; some of them are civil law. They show you how you can do it if you want. I am convinced personally that the UK is making a very serious effort but you are exposing yourself. You are vulnerable if you come with this kind of legislation into the wider, international framework. You will be accused by the south of not living up to your standards.
Q373 Chairman: Suppose this Bill is passed in its present form. Are you saying that the United Kingdom would then be complying with its obligations under your Convention or would not be complying?
Professor Pieth: I would not, in my very simple language, say you flunked the exam directly but you have several two star deficiencies and several one star deficiencies. Three stars mean you have flunked. You have a problem with the foreign, public official because we request an autonomous definition of a foreign, public official. That is to say, you define what the public domain is from here -- for instance, unambiguously that MPs anywhere in the world, judges anywhere in the world, members of international organisations and so on are all covered -- and you do not refer back to Egyptian law. Since you are not pronouncing yourself on it, there will be a question mark here. Are you actually referring back to Egyptian law? This is at least a question we will have to ask. I have mentioned the foreign judges, MPs, representations of public enterprise and international organisations, issues that we have a question about under the laws pre-2001. We will have them again here. We have a question as to "corruptly". We are very doubtful that it is too much of a qualifier and cuts out cases that we want to see covered. We have a problem with the clauses which we do not understand at the moment. I understand that they are necessary because you are too broad in one and two, but the way they run I am asking myself: what is the public interest, for instance, if it says, "acting on behalf of the public"? Does that mean somebody who is generating jobs for British industry is acting on behalf of the public? That interpretation would certainly not be possible and I do not think it is right but the question for somebody who is not very nice with you remains open in 6(3)(b). Clause 15 is being explicit and just asking for trouble. There you will be in massive trouble with the intelligence agencies. That is going to trigger off huge debates internationally as well as the consent to the prosecution requirement. There we will have grave doubts. Summing up, our main problem is not those individual points I mention. Our main problem is it is very difficult to understand and therefore might be unclear not for the lawyer -- you have fantastic, trained lawyers -- but do your SMEs understand it? They do not have in-house counsel. I am Swiss but ----
Q374 Chairman: You are a great export on this from the OECD and what I want to know is what is your final assessment? If we do this, are we complying fully with our obligations? The fact that someone will not like what we have done or may pick up little bits here and there does not necessarily mean that we are not complying with the obligations under the Convention. Are we complying or not?
Professor Pieth: It is not as clear cut as that. I am anticipating what will happen. Since there is so much complexity, we will have serious doubts whether it will really be full compliance.
Q375 Chairman: On balance, you think we would not be complying. I know you are trying to be diplomatic.
Professor Pieth: I have to. I cannot risk my job.
Q376 Chairman: Let us move into the commercial sphere again. It seems clear on the Bill that this is not meant to cover overseas companies, companies operating wholly overseas, including the subsidiaries of British companies. Assuming that is right, is that acceptable to the OECD or not?
Professor Pieth: I had a different understanding of clauses 13 and 14. They do cover British companies acting abroad. The point you are raising is more delicate. You are asking: does it also cover foreign subsidiaries of British companies. There I must admit that the OECD has a weakness inbuilt in its own instrument. We would like to see you covering your foreign subsidiaries. The problem is we did not manage to get our act together in 1997 when we drafted the Convention to make that an international, binding standard. The jurisdiction covers our framework. We are in the process of discussing whether we should go further in the OECD to pick up also foreign subsidiaries. Under certain circumstances, foreign subsidiaries would be covered also in this framework because if it were proven that in the UK somebody was aware -- that is where the intent issue comes back again -- not corruptly and not with some malicious intent but if they had knowledge that the UK company or its agent was involved in bribing somewhere, then we would have a case to be run in the UK under the territorial jurisdiction. You are covering some cases of foreign subsidiary and agent behaviour but you are not tackling it head on, although you are in good company or bad company, if I may say so.
Q377 Chairman: Your working group has made the criticism that although it may be clear that it is bribery if the person paying the money, on giving the bribe, gets a benefit, it is not clear that he pays the money to confer benefit on a third party. Your OECD Treaty is explicit on this. Does not our Bill go far enough on that?
Professor Pieth: For me it is still an open question because in the report I read that certainly interested parties -- take, for instance, spouses and so on -- would be covered. The problem we had with other countries was that we wanted a disinterested third party also to be covered. If I ask for payment to the Red Cross or political parties, that needs to be covered and there is a question mark there. This would be one of my one star issues where we are simply uneasy because it is not explicitly said in a clear manner. There is a reference to third parties somewhere but it is not very clear. That would be a minor point for me, whether you are really reaching out far enough into the third party area, but that is not a fundamental point.
Q378 Baroness Whitaker: There is also a point about coverage of public officials. Are you content with the way our Bill captures the various groups of public officials? I know that the Convention means to include judges and international organisations. We are not so specific. Do you think our text covers the point?
Professor Pieth: You are taking an approach with agent and principal. You are referring to other sources of law that are pre-existent. What we are asking for is to be absolutely secure that the Egyptian MP, judge, the official of the European Union etc., are all covered. In the first round, phase one, we had serious doubts as to whether we really had full coverage. The new law seems very sweeping and very broad. It seems to have a very broad agent concept. We will come back and ask the questions and we want to be convinced that it is really the case. We want to see case law. There might be a difficulty because there may be no case law here so there will be a question mark hanging over the UK legislation and it would be so much easier if you simply had a definition to say that it is covered.
Q379 Baroness Whitaker: The government could give an assurance in Parliament when the Bill was passed.
Professor Pieth: That would not be acceptable. We want a legal text. This is very much from the Swiss perspective but ordinary citizens have to understand the law. That is the French Revolution.
Q380 Lord Carlisle of Bucklow: This Bill is based very much on an agent and principal basis. Do you see any advantage in that at all?
Professor Pieth: I like the idea generally as an abstract concept. That is where the dishonesty comes in. Somebody goes against his duties towards his principal but I would be interested in that, as far as my abstract need as a professor, in understanding the general notion of corruption. As a legal concept, to apply it in concrete cases, I have my doubts whether the analogy that you might have from the private sector really is applicable into the public sector. You will see that in some clauses you have to take back again what you are saying. You are giving an exception but saying this exception does not apply to the public sector. The reason is that this agent/principal idea cannot be fully applied throughout. This is up to you. If you like this notion, I will not quarrel with you. This is your domestic prerogative. I would find easier solutions preferable.
Q381 Chairman: I would like to go back to your secretariat's submission which says, "As a definition of the core mens rea element of the offence, clause 5(1) is obscure, circular and unsatisfactory. It would be preferable to devise an affirmative definition of 'corrupt' or 'corruptly' using language drawn from existing common law cases and statutes..." That is the first suggestion. "... or by using the word 'undue' as it is used in your Convention." I am not sure whether "unduly" in English has the same meaning in French. There is an element of legality, as I understand it. "Unduly" does not necessarily import the concept of illegality. What do you mean by "unduly"?
Professor Pieth: You could translate "unduly" by "not legally foreseen".
Q382 Chairman: It has a purely legal connotation but "unduly" in English does not necessarily have legal connotations.
Professor Pieth: It has a moral connotation, I accept. I think, in the way it is translated in the continental European context, "unduly" means there is no legal entitlement. That is why I am insisting that on an objective basis you have to be very clear and then it can be simpler in developing the mens rea.
Q383 Chairman: If you told a jury, "You can do this unless you do it unduly" they would not be very clear as to what was meant by that. We have somehow to spell out "unduly" if we follow your suggestion. What about the other idea that you could devise a positive and affirmative definition of "corrupt" or "corruptly"? They do not go on to spell that out in the document.
Professor Pieth: My secretariat is independent. I did not advise them what to write there.
Q384 Chairman: I am not asking you to defend it; I am just asking you to comment on it.
Professor Pieth: I would prefer to simply eliminate the concept of "corruptly" here because it is causing trouble. It is very difficult to define it in positive terms. My suggestion would be to use something like "not legally foreseen". I would work from the concept of "undue" and translate that into straightforward, ordinary language.
Q385 Chairman: Not legally foreseen or not legally permissible?
Professor Pieth: It is more than that. There is no entitlement. There should not be an entitlement. We have a problem if an official takes money to which he has no title.
Q386 Mr Stinchcombe: Knowingly to confer advantage to which he had no legal entitlement?
Professor Pieth: That is right.
Q387 Lord Waddington: I thought we had more or less agreed that there may be some difficulties in explaining to a jury precisely what "undue" means, but we are agreed, are we not, that this offence of corruption must involve some improper motive? There must be either dishonesty or lack of integrity or breach of duty. Something improper has to surround this transaction, has it not?
Professor Pieth: By definition it is improper to knowingly promise money to someone who has no title to it in order to influence him to conduct his business. There is no need to say "improper" additionally because it is improper by definition to intentionally confer an advantage that he has no title to.
Q388 Lord Waddington: There has to be something to prevent somebody being called a criminal for the mere payment of money without any improper motive at all. I have mentioned often in this Committee that, at the moment, the Bill is so broadly framed I would be a criminal if I were to pay money to a baggage handler at Heathrow to get him to hurry up and extract my baggage from the mass of other baggage. That must be wrong, must it not, if your legislation is so widely drawn it stigmatises as criminal acts which no reasonable person would consider criminal?
Professor Pieth: Let me give you two answers. The OECD's position is that we are asking you to deal with so-called genuine, straightforward grand corruption. We are not dealing with small facilitation payments that are sometimes necessary to move around or to get a telephone installed. We are under heavy criticism worldwide for this. The reason why we are doing that is because we have a kind of long arm jurisdiction situation here. You are in a way tidying up situations in Kazakhstan from here which is very difficult and is only going to work in very major cases. If we have to envisage a case run in Britain on ten pounds that have been given to a baggage collector at an airport somewhere in Kazakhstan, that would not be practicable. For that reason, we have said we are not dealing with that.
Q389 Chairman: How do you set the limit? If you are going to do it by law rather than practice and not prosecute, how do you set the limit for these facilitation payments?
Professor Pieth: Different countries have chosen different solutions. For instance, the German speaking world on the continent have been saying payments for an act that is impermissible, going against the law, are covered. That can be a small payment. If a policeman does not give you a fine because you have given him ten pounds, that is a clear case of corruption. That is one approach, that you say it was in furtherance of an illegal act. The other approach would be the one the Americans and the Canadians have chosen. You have an explicit, affirmative exception saying small payments for routine government transactions -- that is the wording they use -- are not acceptable but are not criminalised. We are not saying that is allowed. We are not saying it is good because we would get into serious trouble in Pakistan, India and other places. People are suffering from the multitude of that behaviour and that causes a problem but it is not something we can tidy up from here.
Q390 Chairman: Do you not give a guidance or definition as to what is meant by "small"?
Professor Pieth: No. There are guidances given in some countries. Around $500 has been one such approach. Other countries do not have a distinction. France, for instance, has no distinction as to the current UK law but what you certainly do in France and in the UK at the moment is that, in procedural terms, you would filter cases. You are not forced to take up every case. The prosecutorial discretion would take care of that situation. In France you have an informal threshold. I do not know what it is.
Q391 Vera Baird: I wanted to go back to the attempt to define the act. Looking at Article 1(19) in the OECD Convention, there is a problem for us in the notion of "undue" which does not mean illegal. It has two quite separate meanings apart from slightly improper. It means not timely. It means not due now but perhaps due later, like a bus coming. It also has an element that there may be an advantage which is due but this is too big an advantage. There is a quantitative element too and I do not think it therefore does encapsulate it. If one looked at Article 1(19) and just replaced the word "undue" with "to which he had no legal entitlement" it would say that it would be an offence for a person intentionally to offer, promise or give any advantage to which the recipient had no legal entitlement in order that the official refrain or act. That would sum it up, would it not? Would that be sufficient?
Professor Pieth: Yes.
Vera Baird: From our point of view, would not intentionally giving something to which there was no legal entitlement in order that someone refrain or perform something outside their official duties be sufficient to define "corruption"?
Chairman: Would you see that as covering tips given after the event or only tips given before the event?
Q392 Mr Garnier: Or anticipatory tips?
Professor Pieth: It is basically aiming at the situation where you are trying to influence someone. It covers payments before. I think your Bill is also covering gratuities, payments afterwards. That is not something we would require in the context of transnational bribery. You are doing that for different purposes to cover the Council of Europe's Convention or for domestic purposes. That is not something we would insist on.
Q393 Mr Garnier: My question deals with the undue pecuniary or other advantage in Article 1(19). I am not a criminal lawyer but I wonder whether we get any assistance from our own Theft Act of 1968 where we have a collection of offences broadly dealing with the obtaining of pecuniary advantage, either by deception or by some other form of dishonesty. I do not know whether that is something that in our jurisdiction we could usefully import into your criticisms to produce a better answer to the problem of "undue advantage" or payment.
Professor Pieth: Not being a specialist in your Theft Act, what seems to be the problem is that we are quite broad by saying that there is no legal entitlement. We are not saying it is forbidden to take that; it is simply not something that you have a right to take, which captures many more cases.
Mr Garnier: The easy circumstances are the obvious bribe of paying somebody $1 million to do something and giving a waiter a five euro tip for bringing your coffee rather more quickly than the next table's. The difficulty is going to come in that grey area, the margin, whether the tip moves from being a gratuity to becoming a corrupt payment. What we must try to do presumably in drafting our statute is to make that grey area rather less grey so that the lawyer, the businessman, the public official in Egypt ----
Chairman: If you give somebody £5 to carry your bag which he is not legally entitled to, it does not necessarily make it corrupt, whether you give it before or afterwards, does it?
Mr Garnier: Equally, if we make you late for your aeroplane this evening, if you tell the taxi man, "I will pay you twice what is on the metre if you get me there in time", you are encouraging him to break the speed limit.
Q394 Chairman: Take the £5 tip and the extra tip to make someone go faster than the law allows. Are they in a different category?
Professor Pieth: The answer goes back to the system we have in our own country where we introduced the provision that you are encouraging him to break the law. If my inducement to the taxi driver would result in him breaking the law by speeding, then I would be in effect and if you were a public official that is another additional requirement you would have.
Q395 Lord Campbell-Savours: That was the reference to "in furtherance of another illegal act"?
Professor Pieth: Yes.
Q396 Lord Campbell-Savours: Where is that applied? You have talked about different countries. What about France?
Professor Pieth: There would be the German solution. The Swiss solution uses that wording. The German speaking world generally. Other countries have a more extensive notion of "undue". They would try to capture these cases that we do not want to capture with the word "undue".
Q397 Mr Stinchcombe: I wonder whether there might be a difficulty with just focusing on the legal entitlement aspect. Would it not be possible for people to enter into all sorts of collateral contracts so that there is an entitlement to receive money under those contracts and they say that they are legitimately entered into when in fact they are used as a guise simply to exert undue influence? I wonder whether, in order to meet the points made by my colleagues about improper motive, it is not necessary for us to put something in about the intention wrongly to influence someone. That does seem to me to be the essence of the advice we are targeting.
Professor Pieth: My quarrel is not with your approach generally, if your general approach is to have that kind of qualifier. The difficulty is what does this actually mean. Can you make sure that it is not broader than what other countries are doing? We have so far not seen a very straightforward definition of what it really means. We have insecure ways where the clause tried to say what corrupt conduct is. The meaning of corrupt conduct has left a lot of questions open.
Q398 Mr Stinchcombe: What about the point on legal entitlement? Is there not a danger that people will simply enter into collateral contracts ostensibly offering perfectly legal services and that be used as a fiction in order to colour what would otherwise be a corrupt relationship?
Professor Pieth: A situation I have known from France is that frequently public officials are offering to write an expert opinion and the value of the expert opinion is 5,000 but they are receiving 100,000 for it. That is a typical way of bribing. That is the kind of thing you would do if you wanted to camouflage something.
Q399 Mr Garnier: That is a matter of evidence rather than legal definition.
Professor Pieth: Yes. Of course there are ways of trying to go round it. The difficulty there is that a public official in most systems would have to explain why they were giving expert opinions and things like that outside their job. If they enter into all sorts of agreements, there is a need to explain why they are doing this.
Q400 Mr Stinchcombe: It must be widespread in private commerce that people get huge introduction fees under perfectly lawful contracts and yet it is a disproportionate amount of money.
Professor Pieth: I have my vision slightly restrained to the international public bribery concept where I think a Pakistani General has a need to explain why he has entered all sorts of business contracts.
Chairman: There are a number of rather more specific areas, we can come back to the General if you want to. You have mentioned clauses 15 and 16. Mr Stinchcombe, do you want to come in on this?
Q401 Mr Stinchcombe: Yes. You have already mentioned clauses 15 and 16 whereby effectively the Secretary of State could authorise the intelligence agencies to commit corrupt offences. Are those provisions a flunk of the OECD Convention?
Professor Pieth: There is no such permission by the OECD Convention to do so. Of course, there could be an argument that in all international conventions there is a safeguard of interests of public security.
Q402 Mr Stinchcombe: National security.
Professor Pieth: National security. In a way, the advantage of what you are doing here is you are spelling out exactly what that means, whereas other countries, take France, take the US, are less explicit, at least not in this type of legislation. They might have secondary legislation somewhere else which is not easily accessible. The positive side is that you are actually saying what it means but you are also raising a big issue and this will certainly be a recipe for trouble because it will be discussed in the international arena whether this is allowed or not permitted. It is a taboo so far.
Q403 Mr Stinchcombe: Do you believe that it does conform or does not conform with the Convention? Secondly, as a supplementary question to that, if it is of benefit to raise it publicly, would it be preferable for us to raise it publicly but then narrow down the apparent exemption it confers?
Professor Pieth: I think if you have to do it it is probably preferable that you say what you are doing and where the limit is. My only problem is that in most circumstances, even if it goes beyond what you have in writing here, there is still usually national security privilege for more severe cases. The question is, are you really able to limit it or are we in the same situation as other countries?
Q404 Mr Garner: Would you suggest that clauses 15 and 16 should be completely redrafted or deleted in order to meet your concern?
Professor Pieth: I wonder whether they really fit into this context here or whether they fit into a different kind of legislation covering the national security interests as a whole.
Q405 Mr Garner: Is it your view that intelligence services should never be exempt from criminal law, either in the way that it is currently drafted, where they may be given advance permission, or, to come back to our interesting law officer point, because the law officer in this country is a different creature from the Minister of Justice that you might recognise in another country, that the Attorney General should have a discretion not to prosecute?
Professor Pieth: Let me put it this way: my uneasiness is not defence; my uneasiness is we are here talking in an economic context and we all know that secret services have been heavily involved in economic espionage. It would certainly be against the Convention to allow a secret service agency, for the purpose of furthering business, to use such an exemption. That is where we would really be very concerned.
Q406 Mr Garner: Just as a matter of interest, what are the sanctions for failure to comply with the OECD Convention?
Professor Pieth: It is a so-called "soft" law. That means first of all one is publicly exposed and there is a report, as you have already, Phase 1. It has the media sanctions first of all, the media pick this up and you will have your counterparts, your major trading partners, registering it. You will be in trouble in negotiations. There is a risk of being exposed and for a G7 country this would be very, very awkward. There is the potential of a more formalised sanctioning instrument, but that has not been spelled out in that context. You might be aware of our sister organisation, the Financial Action Task Force, on money laundering. They have gone quite a bit further in spelling out sanctions against countries by actually asking for changes in a certain time frame otherwise they would make business more expensive for that country. First of all, very unattractive things and I do not want to confront you with them because they are not a real possibility. I think what you have to take seriously is your good image worldwide. We have started off on the wrong footing altogether, basically the UK and OECD Working Group on Bribery, on this issue because originally your Government felt that the old laws were sufficient, the three laws around 1900 plus the common law offences, and we said, "Sorry, we are not convinced" on the basis that there was only one case that went half way in that direction and we felt there were a lot of reasons why there should have been cases in the last 20 years of large corporations in all countries. I am not singling out the UK here but I know of quite a few cases involving UK companies. The problem would have been that you were working under the territoriality principle at the time. It is possible that there would have been no case to answer but there would have been a lot of questions to discuss and raise. My point is we had to say in the first instance, in Phase 1, "We are not satisfied. We will evaluate you again in 1 bis" and you came up with a law that is not permanent, it is transitory. It is very broad sweeping and inherits some of the deficiencies of the old law because basically it leaves the old law in place and builds on it. It is more explicit in some ways. Now you have a third chance and we are hopeful that this is going to be the ultimate and secure law.
Q407 Mr Garner: There is a perception in this country, it may be a wholly wrong perception, that some countries sign up to treaties almost as a matter of pro forma obligation and then ignore them and just get on with their usual activities. I am just thinking when one comes to 15 and 16, the activities of the intelligence services, whether I am being unduly cynical in thinking that some countries may have signed up to an OECD compliant law in relation to their intelligence services but then turn a blind eye when they actually do what their states require them to do.
Professor Pieth: What I can promise you, to pick up this point, is we have this monitoring process which goes even further. We are not only looking at laws, we now have something called Phase 2 monitoring which sees whether the laws are actually applied. These are very, very heavy, four months of work in a country. We are sending teams of experts from other countries to go on site. We have just done that and you can look at the results that are on the Internet, looking at German legislation, US laws have been tested so far, French legislation is under review at the moment and Canada has just been done. It is a very, very serious peer process. We want to see the cases, case law application, and we are going into companies to see what they have done in-house. We are doing that also with countries that you are referring to that generally have got a reputation of signing up to things but not ----
Chairman: We get this in all sorts of areas. I think Lord Campbell-Savours would like to pursue one of the points you have raised.
Q408 Lord Campbell-Savours: You are surely not saying that this organisation you have referred to should have the right to approach governments of different countries and demand access to information from within their security services about acts that they may have uncovered which could be claimed to have been corrupt because they would not tell an outside body, would they?
Professor Pieth: It is worse than that. Excuse me for interrupting.
Q409 Lord Campbell-Savours: They would not tell you.
Professor Pieth: No, we do not need that. It is enough for us that there is a possibility and that would be enough to shame them.
Q410 Lord Campbell-Savours: The possibility of what?
Professor Pieth: Of undercutting our rules by economically oriented secret service action.
Q411 Lord Campbell-Savours: They would not tell you. There is no way that you could establish with any machinery what was going on behind the walls of secrecy of secret services of any country in the world that I know of.
Professor Pieth: No, but what I am saying is that if the law permits it then that is enough to start sanctioning a country.
Q412 Lord Campbell-Savours: All that was being suggested before was a country might simply sign up to the Convention and not comply and we would.
Professor Pieth: It is more complicated than that in the sense that if we come across cases, and we are increasingly coming across cases, take, for instance, the case of Accres in Lesotho or the case of Exxon Mobile in Kazakhstan, there are lots of cases around the world, and probably in all of our countries we have cases, we investigate and if it appeared there had been an excuse why a country would not pick up a case for some reason and we felt it was for a secret service privilege there would be very, very adverse comments on it in the world press.
Lord Campbell-Savours: I think what you are saying is we would be better off not having 15 and 16 in the Bill, just leave them out and do not comment.
Q413 Chairman: Is the only alternative to strike this out? Is the only real option to strike this out altogether and not have this exemption which Mr Kos describes in very strong terms as being not only not compliant but also really quite an unreasonable section to include? Is that the only real option or is it possible to define something more narrowly which would not provoke his rage in the way that it has done so far?
Professor Pieth: I must admit that I have not tried my hand on that. My point is can it be limited to defence and public security in a very narrow sense and to exclude economic considerations? That would be my question. Frankly, talking of exemptions, 6 and 7 are of more concern to me than 15 and 16.
Q414 Chairman: If we cannot draft something that would be acceptable generally we should leave it out, is that what you are saying?
Professor Pieth: Yes. I am accepting that is not a very elegant way because we are shoving something under the carpet. Other countries have a similar problem. Here I am just saying you are raising an issue which might cause a lot of trouble because then it will have that ----
Q415 Mr Garnier: That is what we call being naively candid.
Professor Pieth: You said it!
Q416 Chairman: Is there any difference on this aspect between the OECD Convention and the Council of Europe's Convention or do they take the same line, the same view?
Professor Pieth: As far as I am aware - I am not an absolute expert on the Council of Europe's newest development - here we are pretty much in the same situation.
Chairman: Unless there is anything else on that, shall we move on. The suggestion has been made a number of times that perhaps we can deal with this problem in other ways or perhaps deal with it by adding in other offences. Lady Whitaker, you want to pursue this.
Q417 Baroness Whitaker: One of the offences not in our Bill is trading in influence, which of course is provided for in the Council of Europe's Criminal Law Convention in Article 12. Are you concerned at this omission?
Professor Pieth: First of all, I have to say this is an issue that leaves the area that the OECD covers, we are not looking at trading in influence. As a Professor of Criminal Law I accept that there is an interesting north/south divide on this issue. The countries in the north so far do not have trading in influence concepts and the south do.
Q418 Baroness Whitaker: Several have entered reservations.
Professor Pieth: Yes, and the north will not pick it up whereas Italy, Spain, France and so on will pick it up because they know what it means. Obviously we have difficulties in understanding the concept or we think it is less reprehensible. It is a very open concept, I must say. I do not see a clear distinction between lobbying and trading in influence, it gets very uneasy. That was one of the reasons why the OECD said "Let us stick to very, very straightforward grand corruption". That is why we have this very, very basic concept when we talk about bribing other foreign heads of state, for instance, whereas trading in influence is a fringe issue, something in the grey zone.
Q419 Chairman: We have been told a number of times that it would be variable to have as an ancillary offence trading in influence and other people seem to think it is not a good idea. The fact that a number of member states of the Council of Europe have entered reservations about trading in influence as an offence, should that make us hesitate to recommend that it should be adopted or are those seven not representative of the majority opinion in the Council of Europe?
Professor Pieth: I think it is a cultural question. You have to ask yourself what are the situations you are thinking of and are those situations you have a way of dealing with in your own country, are they a threat to you. This is a domestic issue basically. In Switzerland we have found a solution that we are probably not going to include the trading in influence. It exists but people are not so alarmed about it. Maybe this is wrong because, and this is reflecting on it as a Professor of Criminal Law, the situation in Italy is that in the evening you calculate the situation you are in in money and then you hand over the money and the next day you are free for new alliances, whereas the situation in Switzerland would be you might be bound for 30 years into an alliance, an old boys network, if you want. With trading in influence we are basically aiming at old boys networks. The problem we have is that it is such an open notion that we are covering a lot of ground and things that we do not think are really criminal are also covered, so it is very difficult to make a clear distinction. Domestically we have chosen not to translate it. Again, from an OECD perspective we are very, very far away from this kind of grey area. We are really concerned by the $50 million or £50 million being paid somewhere allowing a head of state to distort democracy.
Q420 Baroness Whitaker: Under our notion of corruption do we not have an idea of somebody gaining a private advantage at the expect of a public benefit?
Professor Pieth: Yes.
Q421 Baroness Whitaker: That is not always there in trading in influence, as you say, it could be lobbying. It is a bit irritating.
Professor Pieth: I feel a bit uneasy saying something definite here because this is really overstepping my role here. This would be talking about domestic issues and I do not have enough knowledge of the situation in the UK to really help you there.
Chairman: Another topic which is a sensitive topic which has raised much interest is the question of changing the present position on parliamentary privilege, the Bill of Rights, Article 9 and all of that. Dr Turner, would you like to take that?
Q422 Dr Turner: Thank you, my Lord Chairman. You will have seen clause 12 of the draft Bill removes the protection of parliamentary privilege from bringing anything that is said in Parliament into court as evidence. The European Court of Human Rights holds that this privilege does not necessarily impede a sensible trial and that the protection is not necessarily incompatible with prosecuting a case. Do you think that the abolition of privilege in cases of corruption is an essential prerequisite for conforming with the OECD Convention?
Professor Pieth: From the OECD's point of view I think it would be enough if you had a system to simply lift parliamentary privilege. For instance, in a concrete case, a vote in Parliament to lift privilege in a specific case, that would be an alternative possibility. You are not required to have an automatic lifting of the parliamentary privilege. My point is it is more a question of good policy. If 12 is the reason why you have to have the consent of the legal officer, 17 ----
Q423 Chairman: We will come on to that in a moment.
Professor Pieth: I am trying to make the link between the two.
Q424 Chairman: How far is the concept of parliamentary privilege applicable and enforced in other OECD member states? How far does the question that we are facing here arise in other OECD countries?
Professor Pieth: I think you have to have a concept to lift it in case a serious crime has been committed and an investigation is under way. You are not forced to automatically lift it by law at the beginning of such an investigation if there are allegations, you can actually go through a vote in Parliament. That would be the standards you would find, for instance, in European countries in most places.
Q425 Dr Turner: So all other OECD members have got, if you like, a graded lifting of privilege?
Professor Pieth: Yes. You also have different types of crime. For instance, if it is a case of libel you have to have much more leeway as a Member of Parliament, so there would be a big hesitance there, whereas if it is a real serious crime, dishonest crime in British terms, it is much easier obviously. In our view corruption is something that we consider as serious so there has to be an established procedure to lift it, but not necessarily by law. Upon initiating those proceedings you could actually go through a vote by the body to lift it.
Q426 Dr Turner: Do you think that clause 12 as it is currently drafted is an unnecessarily blunt and open-ended provision?
Professor Pieth: I am rather hesitant here because it goes quite far beyond what the OECD is talking about. I am saying there are alternatives to it and please do not make this a reason for the consent because then we would comment negatively.
Q427 Chairman: It is probably not possible to make an absolute generalisation here as to whether everybody should abolish the sort of parliamentary privilege they have because there are so many grades of protection in different parliamentary systems. It has been suggested to us that some restriction might be justified. Following on from Dr Turner's questions, do you feel that the present proposal goes too far, that it is going to damage freedom of speech in Parliament?
Professor Pieth: I am a bit hesitant to voice an opinion on that specific point here because this is so much embedded in a discourse which I am not part of. There are obvious alternatives here, other people do it differently. You do not have to do this by international requirements but if you feel happy with it then that is your own ----
Q428 Chairman: If we left Article 9 of the Bill of Rights on parliamentary privilege alone and left it as it stands now, for that reason would we be in breach of any aspect of the OECD Convention?
Professor Pieth: I must ask you to repeat the question, I am sorry.
Q429 Chairman: If we did not change our law, if we maintained to full effect the current rule about parliamentary privilege in relation to corruption, would that mean we would not be implementing our obligations under your OECD Convention?
Professor Pieth: The problem is I would then have to know more about the way you run your parliamentary privilege and whether there are possibilities of overriding it. If there are not then I would feel uneasy.
Q430 Chairman: If the privilege in practice was virtually absolute?
Professor Pieth: Then I would have difficulties. However, if the chamber in which the person is participating could lift the privilege I would say you would have no difficulty with the OECD.
Q431 Mr Garnier: I was just going to ask Professor Pieth, although you do not want to become engaged in domestic political discourse about it, I wonder if you can give me one or two examples of the sort of evidence that you would find useful to present in a prosecution but which you could not do so without the lifting of British parliamentary privilege? Perhaps you had not thought about that, in which case I will not press the question.
Professor Pieth: I have not really thought about that.
Mr Garnier: I will not take that further.
Q432 Lord Campbell-Savours: If you leave it to a vote of Parliament to lift, parliamentarians are political and the way the whips work and the decisions that are taken are not necessarily in the public interest when there are political issues at stake because of reputations, so in many ways that would not work and I am sure it would not work in the United Kingdom. I just put that to you.
Professor Pieth: I think you are right there but you have different interests to balance and protecting the Members of Parliament from vexatious accusations is obviously an interest that also has to be taken seriously. Again, I am working my way through from 17 because the argument for 17 has been vexatious accusations. I can see the point particularly with MPs. Give them a chance but do not argue for 17 by ---- I am sorry if I have a one-track mind here.
Chairman: I rather diverted you from the Attorney General but perhaps we should have a look at him now.
Q433 Lord Waddington: I understand that concern has been expressed that under the draft Bill the consent of the Attorney General would be required for the bringing of a prosecution and it has been suggested that might be in breach of Article 5 of the Convention. Do you think that people would be happier if while the consent of the Attorney was not required, the consent of the Crown Prosecution Service, for instance, was required? While you are dealing with that issue perhaps we could wrap up in the same question that so far as other jurisdictions are concerned, are there some restrictions on the bringing of prosecutions and where there are such restrictions are they thought to be less likely to offend against Article 5 than what is proposed in this Bill?
Professor Pieth: Starting with your first point, the Crown Prosecution Service has a similar role, if not exactly the same, as the prosecution service, for instance, on the continent. In some places you have an investigating magistrate, like in France, or a prosecutor. They take the police evidence and take a decision on a professional basis as to whether there is enough evidence to run the case and whether it is worthwhile to run the case or it is such a petty case it would simply be a waste of energy. Those kinds of decisions are in compliance. That is what we are talking about when we talk about professional motives as opposed to political and economic motives. What we are trying to rule out is that somebody says, "This is a good friend of ours, Mr Suharto you cannot do that to us", that will expose him, or the other situation where they say, "We are gaining a lot of jobs out of this contract, we cannot expose this contract, so we will stay the investigation". I am not saying this is being done, I am just saying Article 5 wants to make sure it is not done and 17 invites you to do it, or raises questions at least. We have to see exactly what is the role of the Attorney General: does he have any kind of political discretion, why would he be necessary beyond the CPS? The answer to your question is I believe if the CPS took the decision it would be perfectly in line with the Convention. On your next point, there are other countries which ----
Q434 Chairman: Forgive me, but just before we go on, it is of course a very important part of our system, not the CPS itself but the head of the Crown Prosecution Service is directly answerable to the Attorney General and the Attorney General is answerable to Parliament for what the head of the Crown Prosecution Service does. Does that affect your answer which has been given in relation to the Crown Prosecution Service quite generally if it was confined to the head of the Crown Prosecution Service who has a direct line through to the Attorney and a direct line through to Parliament?
Professor Pieth: The method I am applying here is trying to see what has happened in other cases in other countries. For instance, on the continent if you have a hierarchical prosecution service taking the decisions then you have a head of the prosecution service who is allowed to take the ultimate decision on a professional basis, and if that is the case I would see no difficulty. The question is to what extent the head of the Crown Prosecution Service is a political appointee changing ----
Q435 Lord Carlisle of Bucklow: He does not change necessarily with the government, he is responsible to the Attorney General.
Professor Pieth: His responsibility, I would assume, is very much professional, he is not necessarily responsible for political decisions.
Q436 Lord Carlisle of Bucklow: The Attorney General is also the head of the legal system, you might say.
Professor Pieth: In a way I am trying to ping-pong this question back to you because we would have to know more about the exact situation.
Q437 Chairman: The suggestion here is at the moment the Attorney General has to give consent. The argument is that somebody should act as a filter here and the Attorney General as the head of the Bar, the head of the advisory government service and so on, is just as good a filter as anybody else. If you merely make the head of the Crown Prosecution Service fulfil that role you are not achieving anything because he is answerable to the Attorney General who is answerable to Parliament. This is the argument - I am not saying I think it is right - that if you want to have somebody totally independent of Parliament ----
Professor Pieth: That is one of the points you would find in a discussion, for instance, of the Italian system or the German system where you always have a filter, you have a separation of power inbuilt between the prosecution service and the government. That is the safety net we have got there. We would have to have a closer look at how independent ----
Chairman: We were told that in some American states there is no filter at all, a prosecution for corruption can be brought by anybody, it is only the judge who can throw it out.
Mr Garnier: And the prosecutor may well be elected.
Q438 Baroness Whitaker: Presumably the problem with the Attorney General in the rest of the world is partly a problem of perception because he is known to be a government minister and the Director of Public Prosecutions has no such association, no matter his chain of command. In your view, would it be the same as the DPP being the filter if it were the Director of the Serious Fraud Office perhaps who is more closely associated with the specialised investigations?
Professor Pieth: The question would be is there a possibility that either the Attorney General or the DPP or the minister ordering the closing of an investigation, for instance, of a specific person. Take France and the very delicate investigations we have just been seeing, there is the protection installed by the judge d'instruction being absolutely autonomous. The same situation applies in Milan, one of the securities inbuilt there is their autonomy. The same thing applies with the German prosecutor, there is no way of stopping him. You can tell him to do his work in general but you cannot stop him. I think that should be your criterion to find the right person.
Q439 Baroness Whitaker: It is the case here.
Professor Pieth: The Swiss situation is equally that, that there is no filter at all. The prosecutors are elected, be it by the people or by parliament - Monsieur Bertossa in Geneva was not controllable - and, therefore, they are changed quite a lot. It is essential that if you want to make this instrument really work you have to be very careful to block out political influence, even in the abstract. We are not talking about concrete matters.
Q440 Lord Carlisle of Bucklow: How do you do it if your prosecutors are elected? How do you avoid the political influence? I thought political influence was far greater in your case than the use of the Attorney General over here.
Professor Pieth: They have an esprit de corps and they are elected for a very specific function, they are not political appointees in that sense. Far from it, they have to live up to the professional standard.
Q441 Mr Garnier: Can I just reassure you about this esprit de corps. In the Margaret Thatcher Government the then Attorney General, Sir Patrick Mayhew, threatened to bring the police in to investigate his own ministerial colleagues over the leaking of a document to do with the Westland helicopter affair. Historically the independence of the law officers in this country from the political system, albeit that they may be Members of one House or the other, is very strict. I do not think we need to rewrite the constitution of the United Kingdom simply on the basis of the draft Corruption Bill or on the basis of a need to comply with an OECD Treaty. I wondered whether your opinion of need to have the Attorney General's consent is informed by an uncomfortable reaction to the extraordinary elision in our constitution where we have an elected or appointed politician who happens also to be a dispassionate head of the prosecution service, just as you might be uncomfortable with the constitutional position of the Lord Chancellor who is the senior judge, a member of the legislature and a member of the executive all at the same time but nonetheless, despite criticisms one may or may not have of individual occupants of the woolsack, the job seems to have trundled along reasonably well. I wonder if we are just having a problem of translating European Montesquieu-type constitutions on to the situation we have here. It may be a problem that we do not need to worry about too much.
Professor Pieth: It may well be that you are right and then, of course, it would be an artificial problem. The real question I am thinking of is are you sure that in situations like we have been seeing in Italy, France or Germany recently that a centralised person who is very close to the government, is part of the government, would really be able to be this dispassionate.
Q442 Mr Garnier: If the Attorney General misconducted his role as the chief law officer he would destroy the government, so he would not do that, and, anyhow, if he wanted to be dishonest he would issue what is called a nolle prosequi even if he did not have the original discretion.
Professor Pieth: My question back to you is simply why is he necessary? Why can the prosecutors in the CPS not take the decision? Why do you need somebody centralised far away from the actual case? The prosecutors I referred to a moment ago are local prosecutors in the terrain and they take their decisions on each specific case. Here you have got a system of central screening and that is what is going to cause questions to be asked.
Chairman: Perhaps the test is you need somebody who can be a filter but someone whose decisions are not going to be unduly influenced by political factors.
Mr Garnier: I think we have got a difference there that we can resolve in the Committee in due course.
Q443 Vera Baird: I want to ask you about the draft UN Convention on Corruption. I am conscious that we have taken you outside your specific remit a couple of times but we are trying to legislate for the long-term and to ensure that we meet all of our international obligations even if they are not yet firmly and clearly established. Have you got a view about if the Bill were enacted as it currently stands that it would fulfil our obligations under the draft Convention, the January version I suppose is what we have to talk about here?
Professor Pieth: There is a problem in that I have not formed a definite opinion on that question for the obvious reason that the text is under heavy negotiation still quite substantially. We have whole blocks, for instance all the preventive measures against part of the criminal measures and against monitoring, that are still under negotiation, so an awful lot could still happen. Looking at the UN Treaty, I think there are basically two areas that go beyond what we have in the regional treaties and the OECD Treaty. They are the aspects of repatriation of assets and mutual legal assistance. Those are areas where some genuine work is being done. The question for me which is very open, and I have not really investigated it or thought about it, is whether your Proceeds of Crime Act 2002 covers this question of international repatriation of assets. That would be a point where you would have to have a new look if you want to cover the UN as well. The problem is we do not know at what point they will stop their negotiations yet. If you will allow me to refer to this case that has been bothering us all, the case of Abacha, the money of Abacha, most financial centres have had some of it and have tried to deal with it. The PCA gives a very interesting and good instrument to seize the money, it is far better than it was, but the big question is does it give enough possibility to actually send it back. A lot of questions are open there: what do you do if there is an equally corrupt regime in the country now in place - not referring to Nigeria now - that is an abstract problem you have to deal with and you have the problem that in many countries the Treasury is saying "This is our money, we want to keep this rather than send it back". My short answer to your question is if the negotiations run on the way we are seeing at the moment you will probably have a question as to the repatriation of assets, whether they are adequately covered.
Q444 Vera Baird: In the PCA?
Professor Pieth: Yes.
Q445 Chairman: Perhaps if this Bill is adopted, or something like it, these will be questions for the next Joint Parliamentary Committee on the next Corruption Act to follow in a few years' time. Is there anything else Members would like to add? We are extremely grateful to you for coming, you have been very helpful. I think it is perfectly possible that when we come to reflect on all of this we may have questions we want to put to you in writing and if on reflection you think we have not asked you the $64,000 question we should be very glad to have your thoughts on any other matters.
Professor Pieth: It has been a great pleasure and an honour to be here.
Chairman: We are very grateful to you.