Additional memorandum submitted by Professor
Jeremy Horder (BB 21)
BRIBERY BILL:
CLAUSE 4.
The foreign law exception: does the Convention
sanction it?
The inclusion of this exception follows the
Law Commission's recommendations (Report. Para 5.81 et seq),
and its draft Bill.
It should be stressed that the inclusion of this
exception follows the OECD's own analysis of what is permitted.
Official Commentary 8 says:
"[I]it is not an offence, however, if the
advantage was permitted or required by the written law or regulation
of the foreign public official's country, including case law."
In her analysis of Article 1(1), Professor Zerbes
says in her commentary on the issue:
The advantage will be regarded as undue, if it is
not foreseen by a binding legal provision (usually a statutory
norm)... The question whether the benefit was in fact due is a
matter for the law of the victim foreign state to determine. [her
emphasis]."[160]
In our view, thus, it could not be any clearer
that the "foreign law" exception is integral to limits
of the prohibition on making payments to public officials. Further,
according to Professor Zerbes:
"Most of the signatory states have indeed
implemented the Convention to the effect that payments or other
benefits which are made in conformity with a strict legal basis
are not criminalised".[161]
She goes on to mention a series of countries
that criminalise only payments `sans droit', such as France, Italy
and Greece, amongst many others.
It is also worth pointing out that, under the
FCPA in the USA (which you asked me about), 15 USC &&
78dd-1(c)(1) refers to the legitimacy of an advantage that is:
"lawful under the written laws and regulations
of the foreign official's country".
Picking up another point that was discussed
when I gave my evidence, Professor Zerbes says that in virtue
of Official Commentary 7:
Only a clearly binding legal norm of the foreign
state—embedded in legislation or case law—is an adequate
legal basis for permitting an advantage."[162]
This was also the view of the Law Commission,
and is the intended effect of the Bill.
It would be right to point out that, in Professor
Zerbes opinion, `the defence appears to have been of little practical
impact'.[163]
However, that seems to me not to constitute
a sufficient reason for the UK to be in the vanguard when it comes
to doing without the exception. Two important principles are at
stake: first, respecting state autonomy means respecting states'
legislative freedom of action, particularly if they are not signatories
to the OECD Convention,[164]
and secondly, this would be clear and unambiguous gold-plating
of a kind that is to be avoided.
The foreign law exception: in what circumstances
can it play a role?
The principal focus would appear to be standard
fees or tariffs paid directly to public officials, rather than
into a general fund.[165]
Professor Zerbes gives the following example:
Such [permissible] advantages may take the form
of a legal entitlement or claim, for example, payments to a notary,
who may in some countries, and in some circumstances, take fees
for a duty performed in the public interest. The criminal law
of the signatory states will either exclude such legal advantages,
or will make them part of a legitimate defence.[166]
In my view, we have to make allowance for the
fact that some countries will try to reduce transaction costs—ironically,
quite possibly in an attempt to prevent official corruption somewhere
else in the chain—by making it legally possible for the
provider to pay a state official a fee etc directly, rather than
into a central fund.
Hospitality/Commission payments and clause 4
I don't think that it is helpful to analyse
the "legitimately due" exception in terms of the effect
that it will have on hospitality or commission payments. These
are unlikely to be provided for by the written law, although they
may—as in this country—be dealt with in an individual's
contract of employment (but as this is not part of a country's
written law, it is not relevant).
More relevant is a comparison between the offences
in clauses 1 and 2, and the offence in clause 4. In clauses 1
and 2, it is always open to the provider to say that he or she
did not, in providing hospitality etc, intend to induce the recipient
to behave improperly. That line of argument is not open under
clause 4, because the offence is "influence" based not
"impropriety" based. Clearly, any hospitality may "influence"
a foreign public official, often perfectly legitimately. An example
would be when a hospitality showcasing event shows how much better
organised and committed the relevant organisation is to provide
goods and services etc, and the official is influenced by that.
However, I do not see this as an inherent weakness
in the scheme under clause 4. There could not possibly be any
public interest in prosecuting for bribery, when the influence
secured over the official was perfectly proper. However, a company
might have a hard time justifying taking officials on a foreign
skiing trip, if the idea is simply to set out their wares and
illustrate their reliability as a company. Even that example would
be different if the company was a skiing equipment manufacturer
seeking to secure a contract to supply an Alpine Army division,
or the like.
Might it not be said, then, that "improperly"
should be tacked on as an adverb after "influence",
so as to distinguish legitimate from illegitimate hospitality?
The Law Commission goes into this issue in the Report, and the
answer is "no", because that would inevitably re-introduce
questions about whether cultural norms and expectations can make
a payment "proper", and that is exactly the result that
this offence is designed to prevent.
Doing without the exception: too harsh?
For the reasons given, I believe that it would
be too harsh, as well as not required by Convention law, to do
without the exception. There is an additional worry.
A criminal offence of a serious kind, like bribery,
should be based on a clear prima facie wrong, whatever
defences there may be to that wrong. The House of Lords has said
that serious offences that criminalise tranches of innocent conduct
are unlikely to be compliant with human rights legislation (because
they breach the presumption of innocence), even if they provide
for defendants to exculpate themselves.[167]
There is a risk that clause 4 will fall foul
of the HL ruling, if the "legitimately due" element
is omitted. This is because it is not necessarily wrong to offer
something to influence a public official to secure a business
advantage. By stipulating that it is prima facie wrong
to influence a public official other than in accordance with that
person's country's written law, provides an intelligible prima
facie wrong.
June 2009
160 Ingeborg Xerbes, `Article 1: The Offence of
Bribery of Foreign Public Officials', in M Pieth, L Low, and
P Cullen (eds), The OECD Convention on Bribery: A Commentary
(2007), at p 104-05. Back
161
Ibid, at p 106. Back
162
Ibid, at p 105. Back
163
Ibid, at p 107. Back
164
The Law Commission considered and rejected a test applicable only
when a country was not a signatory. Some signatories to the Convention
fail according to the Convention's own standards, and so such
a test is an unhelpful one. There would also be ambiguities where
a country was a new signatory, but had not yet brought its law
into conformity. Back
165
Ibid, at p 105. Back
166
Ibid, at p 106 (my emphasis). Back
167
"Sheldrake" [2004] UKHL 43. Back
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