4 BRIBERY OF FOREIGN PUBLIC
51. Clause 4 introduces a specific offence of bribing
foreign public officials. This is absent from the current law,
which subsumes this form of bribery within the general criminal
offences. There has been universal support for the inclusion
of a specific offence, particularly in view of the UK's obligations
under the OECD Convention.
The text of Article 1 of the Convention reads as follows:
The Offence of Bribery of Foreign Public Officials
1. Each Party shall take such measures as may
be necessary to establish that it is a criminal offence under
its law for any person intentionally to offer, promise or give
any undue pecuniary or other advantage, whether directly or through
intermediaries, to a foreign public official, for that official
or for a third party, in order that the official act or refrain
from acting in relation to the performance of official duties,
in order to obtain or retain business or other improper advantage
in the conduct of international business.
2. Each Party shall take any measures necessary
to establish that complicity in, including incitement, aiding
and abetting, or authorisation of an act of bribery of a foreign
public official shall be a criminal offence. Attempt and conspiracy
to bribe a foreign public official shall be criminal offences
to the same extent as attempt and conspiracy to bribe a public
official of that Party.
In broad terms, clause 4 would make it an offence
to provide any advantage to a foreign official with the intention
of influencing them in order to obtain or retain business, except
where the advantage was "legitimately due".
52. An advantage is legitimately due under clause
4(3): "if, and only if, the law applicable to F [i.e. the
official] permits or requires F to accept it". In other
words, it would be an offence unless the local law applying to
the foreign official permitted the advantage to be received by
him or her.
53. Several concerns were expressed about this test.
They included the practical difficulties arising from juries
being asked to reach decisions in accordance with a foreign law.
For instance, the Director of Public Prosecutions stated that
it would introduce a "heavy evidential burden". The
International Chamber of Commerce (UK) added:
There must be considerable doubt whether an English
jury - or indeed an English court - is a suitable instrument for
deciding in a criminal case what a foreign law [provides].
54. The unqualified reference to the "law"
was also viewed by many as unhelpfully vague. The Director of
Public Prosecutions called for the Bill to "spell out"
its meaning, while the OECD and a number of lawyers questioned
whether it risked leaving loopholes that were open to abuse, including:
- Bribes that are authorised
as part of an enforceable contract;
- Occasions when the law is silent about whether
a particular practice is prohibited or permitted, particularly
under the tradition of common law countries where legal permission
is generally assumed unless expressly withdrawn;
- Scope for defendants being able to rely on cultural
norms and practices, which the legitimately due test had been
intended to prevent.
55. A solution that was suggested by many witnesses
was to amend clause 4 by introducing a "written law"
test in line with the commentary on the OECD Convention. This
defines the written law as including statutes, regulations and
case law, while excluding local custom or tolerance.
It is plain that the Law Commission intended the "law"
to be given this meaning and the Attorney General believed that
the courts would interpret it in that way.
Jeremy Cole of Lovells stated:
A 'written law' test not only excludes such arguments
[as the risk of cultural norms being admissible] but provides
businesses with far greater certainty.
56. A small number of witnesses favoured removing
the legitimately due test altogether. For instance, the OECD's
Legal Director, Nicola Bonucci, stated that he knew of no law
that permitted public officials to accept an advantage above their
salary; that only five out of 38 states which are parties to the
OECD Convention had included a specific written law exemption;
and never to his knowledge had the exception been raised during
proceedings. His personal view was that the test was "useless"
and best removed.
Jeremy Carver of Transparency International UK agreed, particularly
given concerns that "special laws" can be passed and
hidden including directions in a centralised state, although we
note that the OECD's Working Group discourages recognition of
laws that have not been "publicly endorsed".
57. A larger number of witnesses opposed abandoning
the legitimately due test. For instance, Professor Horder stated
that it represented a narrow but important qualification, broadly
in line with the approach of most OECD states. On this point
he cited a leading commentator, Professor Zerbes, in support.
While accepting that the exception might have limited use in
practice, Professor Horder considered it necessary to respect
states' "legislative freedom of action" and to avoid
"gold-plating" the law.
58. Professor Horder also maintained that dropping
"legitimately due" would remove the fault element from
the offence and would therefore risk non-compliance with the presumption
of innocence under Article 6(2) of the European Convention on
In a similar vein, the Attorney General called for its retention
as a clear test that distinguishes bribes from legitimate advantages.
Louise Delahunty was concerned that dropping this test might
turn the offence in clause 4 into a "strict liability offence".
59. A small number of examples were provided of the
kind of situations in which a written law exception might apply.
For instance, the Secretary of State for Justice referred to
"offset" or "planning gain" scenarios under
which a company pays for infrastructure projects (such as building
schools or hospitals) as part of a wider commercial agreement.
Professor Horder noted that this is "the kind of practice
which, if permitted by law, we would think absolutely appropriate
and the right way to match up doing business and actually doing
60. The US Department of Justice drew our attention
to one case that it had been asked to advise upon in relation
to the equivalent "written law" test under the Foreign
Corrupt Practices Act. It concerned a company that had been required
to provide technical and management training to officials under
a Pakistani law as part of a joint venture with the Pakistan government.
The Department of Justice authorised training to be given to
officials up to the value of ?250,000 per year. Nicola Bonucci
stated that public officials may not benefit personally under
a legitimate "offset" and therefore no issue would arise.
The OECD Secretariat acknowledged, however, that any offset which
incidentally benefitted an official alongside other members of
the public was likely to meet the Working Group's approval if
permitted by a written law.
61. Professor Horder also drew attention to the possibility
of foreign laws permitting "standard fees or tariffs"
to be paid directly to public officials, rather than into a general
fund, including to officials such as notaries.
The Confederation of British Industry offered additional examples
of conduct that risked, in its view, being wrongfully criminalised
if the legitimately due test were removed.
Monty Raphael of Peters and Peters also favoured retaining the
test for the "very few cases" where it could be made
62. Another alternative was proposed by The Corner
House. It recommended that "legitimately due" should
be replaced with a more flexible approach that took into account
the legitimacy of the advantage that is conferred rather than
focusing on its strict legality under a local law. For this purpose
The Corner House recommended using the term "improper",
which would build on clauses 1 to 3 and fall in line with the
use of this term under the UN and OECD Conventions.
The aim was to ensure that giving an official a justifiable advantage
(such as modest and proportionate corporate hospitality, as addressed
in chapter 7 below) would not be criminalised. For similar reasons
the International Chamber of Commerce (UK) called for the terms
"undue" (as used in the OECD Convention) or "corruptly"
(as used in the US Foreign Corrupt Practices Act) to be included
in the draft Bill, but in addition to the "legitimately due"
63. These proposals were opposed by Professor Horder
and the Attorney General. In particular, these broad terms were
viewed as risking the effectiveness of clause 4 and as increasing
the scope for taking cultural norms into account.
Jeremy Cole of Lovells also opposed the use of broad terms to
exempt "all permutations of payments that are made in international
commerce" on the grounds that their use risked causing more
harm than good by broadening the narrow gateway established by
a written law test.
64. The proposed offence of bribing foreign public
officials (clause 4) represents an important step in putting the
United Kingdom's compliance with its international obligations
beyond doubt. To ensure that this goal is achieved, we recommend
that the reference in clause 4 to the "law" be replaced
with a reference to the "written law", meaning statutes,
regulations and case law. This amendment should remove the potential
for loopholes to emerge, while providing greater certainty to
prosecutors, jurors and businesses alike. It should also provide
an appropriately narrow gateway restricting the circumstances
in which advantages can legitimately be provided to foreign public
A "reasonable belief"
65. The Law Commission originally proposed a defence
for any person who mistakenly, but reasonably, believed that a
foreign public official was required or permitted to accept an
advantage under the official's local law.
The Government decided not to include this defence in the draft
66. Professor Horder stressed that he understood
the Government's decision, but noted rare examples under the legal
system of England and Wales in which mistake of the law can operate
as a defence. He also stated that mistake of a foreign law may
legitimately be treated in a different way to a mistake of domestic
law, before adding:
[I]n practice this defence would not be run very
often, but when it was run it [would be] perfectly reasonable
for a firm to say, 'Well, look, the biggest law firm in the world
has given us this advice that it is perfectly lawful to make this
payment, what can we do? We can only rely on that'. That is
important because we are talking about convicting someone of a
pretty serious offence. The taint of corruption is pretty significant.
67. Many business and legal representatives agreed.
For instance, the law firm Herbert Smith stated that a dearth
of legal authorities in some countries can lead to advice being
heavily qualified, leaving quick decisions to be made on a "best
We fail to see why public policy should require
that individual's actions be criminalised and for the individual
to then to rely on a prosecutor's discretion, on whether with
hindsight, the public interest requires a prosecution.
68. Although the Director of Public Prosecutions
accepted that prosecutorial discretion offered a "workable"
solution given that genuine mistakes and misunderstandings are
factors under the Code for Crown Prosecutors, he preferred the
option of adding a statutory defence in the interests of "transparency
Clifford Chance also stated that prosecutorial discretion offered
little comfort to firms which faced a legal duty to file reports
under money laundering legislation.
The International Chamber of Commerce (UK) suggested that the
defence might be a helpful addition to the "written law"
test, since juries are "much more suited to find whether
a reasonable attempt to ascertain foreign law had been made rather
than to decide upon the law itself".
69. The Government's decision to drop the defence
followed objections from the OECD. Its Working Group considered
that such a defence would be open to abuse and would contradict
the general stance of the UK legal system, under which mistake
of the law is no excuse.
The OECD's Legal Director, Nicola Bonucci, highlighted the danger
of abuse by stating "it is not difficult [
] to get
bad legal advice if you want it.".
70. The Secretary of State for Justice stated that
removing the defence represented the "correct balance"
between being fair to defendants and providing "so many rabbit
holes" that they could unduly escape conviction.
He emphasised that prosecutorial discretion and the good sense
of jurors could be trusted to ensure that genuine mistakes were
not punished by conviction. Several witnesses agreed, including
Transparency International UK, The Corner House and Monty Raphael,
[A] responsible corporation doing business overseas
will always if it is in any doubt, and there will be very few
occasions when it can be left in any doubt as to whether what
is being asked for is a bribe, will seek local legal advice. Where
they have sought local advice and the instructions have been good,
the advice has been unambiguous and they have followed the advice
to the letter, it is inconceivable that they will be prosecuted.
71. The Law Commission's proposal for a "reasonable
belief" defence raises a range of difficult and competing
interests. We are, in particular, sensitive to the challenges
faced by those who conduct business under unfamiliar laws abroad.
But we also appreciate the concerns of those who view the defence
as inconsistent with the United Kingdom's international obligations
and the policy aims of the draft Bill. On balance, we support
the Government's decision to reject the defence.
98 We note that clause 1 and clause 4 overlap in any
situation where a bribe is paid to a foreign public official.
We also note that encouraging, assisting or attempting to commit
an offence under the draft Bill would also be a secondary offence
under the Serious Crime Act 2007, among other provisions. Back
Qq484, 487; BB03; BB56 , para A6 and 2.15 Back
Qq 478, 487, 20; BB31, para 31 Back
BB39, para 4.4 Back
BB31; Q478 Back
Qq 30, 675 Back
BB39, para 4.4 Back
Q478; Q487 Back
Q530; BB31, para 32 Back
BB21: "Most of the signatory states have indeed implemented
the [OECD] Convention to the effect that payments or other benefits
which are made in conformity with a strict legal basis are not
criminalised" citing Professor Zerbes in The OECD Convention
on Bribery: A Commentary, 2007 Ed. M.Pieth, L.Low and P.Cullen,
Q677 (Baroness Scotland of Asthal) Back
BB40, para 5.1 Back
Qq 568, 569 (Jack Straw MP) Back
BB57, para 11 Back
Q493; see also Q490 Back
BB31, para 55 Back
BB46, para 17 Back
The OECD considered the use of the term "improper" or
"undue" to be acceptable but cautioned against any further
qualification using terms such as "good faith", "impartiality"
etc, due to concerns that this may render it narrower than its
Convention: BB31, para 46 Back
BB39, para 4.18 Back
Law Commission, Reforming Bribery, No. 313, November 2008,
paras 7.22-7.49 Back
BB49, para 13 Back
Q394; Q400; Q401 (Keir Starmer QC) Back
BB05, para 25 Back
BB03, para 13 Back
OECD Phase 2 bis report, above, para 62 Back