Memorandum submitted by DLA Piper UK LLP
(BB 20)
DLA Piper is an international law firm. These
submissions are made by its Corporate Crime and Investigations
Team based in London. This team advises many multinational corporate
clients on all bribery and corruption issues, including cross-jurisdictional
and compliance matters. We also have regular contact with the
Serious Fraud Office and the US Department of Justice in connection
with investigatory and prosecution matters.
OVERVIEW
Our clients generally understand the importance
of anti-bribery and corruption measures and want to be compliant
with the law, wherever they operate in the world. However, they
also need the law to be certain and are often confused about such
issues as facilitation payments and whether they are legal in
certain jurisdictions.
We support the intention to create a new consolidated
scheme of bribery offences to cover bribery in England, Wales,
Northern Ireland and overseas. We believe that the draft bill
is concise, yet comprehensive and represents a considerable step
forward in simplifying the bribery laws. However, we also believe
that certain areas need more clarity if we are going to be able
to advise and assist our clients in understanding and acting on
the new provisions.
Clauses 1-3: Bribing another person; Offences
related to being bribed; Function or activity to which bribe relates
We note that the draft bill has moved away from
the agent/principal model originally recommended by the Law Commission.
Although the bribery offences in clauses 1-3 are now based on
the intention to induce improper conduct model we do not envisage
any problems in being able to explain these offences to our clients.
It will be an offence to offer, promise or give a bribe, or to
request, agree to receive or request a bribe and the test for
jury will be to consider whether the conduct is improper. The
six cases cited are relatively helpful (although the drafting
is somewhat tortuous) in demonstrating the application, with the
activities described covering situations involving private business
and public office functions.
CLAUSE 4: BRIBERY
OF FOREIGN
PUBLIC OFFICIALS
This new and separate offence is a very important
step in demonstrating a clearer commitment to the UK's international
obligations and the OECD Convention. We think that the requirement
that payments must be legitimately due to the foreign public official
under local law or the rules of public international organisations
is acceptable in principle. However, we think that it will be
difficult for our clients to establish the point without taking
legal advice in every territory where they operate, which will
add significantly to the cost of doing business overseas.
There would also be an added burden for prosecutors
in trying to establish and interpret foreign legislation in order
to determine whether an offence has been committed and then to
produce evidence to the standard that will satisfy a judge.
CLAUSE 5: FAILURE
OF COMMERCIAL
ORGANISATION TO
PREVENT BRIBERY
This clause of most concern to our clients and
is the one which we believe needs further clarification.
We accept that companies must be compliant with relevant
law and take steps to prevent bribery and corruption happening
in their operations, whether in the UK or overseas. Our clients
wish to be compliant but from our experience we also recognise
that companies need some degree of guidance as to what is expected
of them. If the aim of the bill is to encourage good practice
then some form of guidance is required. Companies should not have
to face many years of uncertainty while case law establishes what
is and what is not acceptable.
In this respect we have two points of concern
about clause 5:
1. The use of the words "adequate procedures"
at subsection 4. How will a company be able to determine what
is reasonable? How will it establish that its procedures were
adequate once an act of bribery has taken place?
2. There needs to be some clarification
in respect of the defence and when it is available. Subsection
5 says that the defence is not available if the negligence is
that of a senior officer or a person purporting to be a senior
officer. Our clients will ask the question—"If we appoint
a senior officer we lose the defence. What happens if we appoint
someone to look after our anti-bribery and corruption plans who
is not a senior officer?"
As the draft currently stands, we seem to fall
into a circular argument. If you do appoint a senior officer you
lose the defence, if you don't appoint a senior officer the defence
will still be available but you might then be guilty of not having
"adequate procedures" if you do not have a senior officer
in charge.
This tortuous clause appears to be an attempt
to avoid imposing strict liability on a company where an employee
or agent has paid a bribe but in doing so the requirements for
the adequate procedures defence have become confusing to say the
least.
If our clients have to adopt an overly cautious
approach this will inevitably increase the burden for them in
terms of cost and resources. Our clients fear that this is, in
fact, compliance regulation through the back door and that they
will incur significant costs in reviewing and monitoring policies
and contracts at a global level (especially when considered in
conjunction with clause 6) to ensure that there are "adequate
procedures" in place in every office.
The uncertainty of the offence under clause
5 may result in prosecutions designed to test its ambit. Defending
such cases will be an additional cost and even if acquitted recovery
will at best be limited under the proposals to cap payments out
of Central Funds.
Perhaps the Government might also consider,
through the auspices of one of the relevant departments such as
the Department of Business, Enterprise and Regulatory Reform,
issuing a code of conduct or some other form of guidance for businesses.
It is accepted that one size does not fit all when it comes to
anti-corruption strategies but our clients would welcome some
guidance on the basic standards or elements of an effective compliance
programme, especially if they are to be judged by a standard of
negligence, rather than gross negligence or recklessness.
Finally, on a minor point, we believe that for
the avoidance of doubt the reference to "secretary"
in the definition of a "senior officer" at subsection
7 should be changed to "company secretary".
June 2009
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