Additional Memorandum submitted by Ministry
of Justice (BB 52)
ANSWERS TO
WRITTEN QUESTIONS
FROM THE
JOINT COMMITTEE
TO THE
MINISTRY OF
JUSTICE
1. Please could you supply a list of cases
for which the current law was insufficient to bring a successful
prosecution and where it is envisaged that the draft bill would
have made a difference?
Although we understand the Committee's interest
in identifying instances where the deficiencies of the current
law have hindered investigations and prosecutions, it is not possible
to obtain any hard "negative" data of this kind. It
might also be inappropriate to refer to specific cases in this
way. However as the Law Commission Consultation Paper on Reforming
Bribery noted, it is almost universally believed that the
current law is in need of rationalisation and simplification.
Criticism of the current law has focussed on the confusion caused
by statutory offences which are often inconsistent and which overlap
with each other and the common law, rather than the existence
of significant "gaps" in the law that hinder effective
prosecutions.
We can, however, refer to several contexts where
liability will be clearer under the draft Bill or where the current
law can be seen as insufficient.
(a) An act of bribery committed abroad by
a foreign national resident in England and Wales
The Anti-terrorism, Crime and Security Act 2001 extended
the domestic courts' jurisdiction to acts of bribery committed
abroad by UK nationals or bodies incorporated under UK law. However,
as was emphasised in the Law Commission report, the extension
does not apply to foreign nationals who reside and conduct their
business in England and Wales. The draft Bill provides for liability
under clauses 1, 2 and 4 for all persons with a "close
connection" to the UK. This includes individuals ordinarily
resident in any part of the UK.
(b) A bribe through an intermediary
The OECD has expressed concern that under current
law it is not clear that it is an offence for a person to use
a non-UK national as an intermediary to bribe a foreign public
official if the act of bribery takes place outside the UK. The
concern here relates to the current law governing participation
in crime, which requires the commission of an offence before a
person can be convicted of aiding and abetting, counselling or
procuring. If a non-UK national bribes another person overseas
on behalf of someone in the UK there will, under current law,
be no offence because our extra-territorial provision in the 2001 Anti-terrorism,
Crime and Security Act does not extend to non-UK nationals. Thus
there can be no secondary participation and a natural or legal
person that counselled the crime cannot be prosecuted in the UK.
The Government is addressing this issue in a
number of ways. As regards the bribery of foreign public officials
for a business advantage, Clause 4 of the draft Bill expressly
covers bribery through a third party of any nationality. As regards
the proposed general bribery offences under clauses 1 and
2, the draft Bill extends our courts' extra-territorial jurisdiction
for bribery offences to cover foreign nationals ordinarily resident
in the UK. Secondary participation in the commission of an offence
abroad by such a person would therefore give rise to liability
in the UK. In addition a natural or legal person in the UK that
encouraged a bribe to be paid overseas on its behalf by a non-UK
national that is not ordinarily resident in the UK can now be
prosecuted under the assisting and encouraging crime provision
in the Serious Crime Act 2007.
(c) An act of bribery committed by or on behalf
of a company
Under current law a company will only be liable
for an act of bribery if a "directing mind", usually
a managing director or board member, is found to have acted "corruptly".
This "identification doctrine" has been criticised,
particularly by the OECD Bribery Working Group, as a severe hindrance
in adequately addressing bribery in the corporate context. Under
clause 5 of the draft Bill, where any person performing services
for a company has bribed another person in connection with the
company's business, the company will be liable if another person
connected with the company, who is responsible for preventing
bribery, negligently failed to prevent the bribe. (This discrete
"corporate failure" offence does not abrogate the direct
liability under the "identification doctrine but" is
supplementary to it. The wider issues relating to corporate liability
generally are the subject of a wider review by the Law Commission.)
(d) The "principal" consents to
the "agent's" actions
The bribery offence under the Prevention of
Corruption Act 1906 is based on an agent/principal concept.
The OECD WGB has expressed concerns that, although the UK has
stated firmly that the principal's consent to the agent's actions
does not constitute a defence under the 1906 Act, such consent
may have been a factor in decisions to discontinue investigations
into foreign bribery. As there is no agent/principal concept in
the draft Bill, there is no question of the principal's consent
constituting a defence.
(e) Bribery of an MP or Peer
Bribery of a member of either House is contempt
of Parliament and as such can be punished by the House. It is
generally accepted though that members cannot be liable for the
current statutory corruption offences as neither House is a "public
body" for the purposes of the Public Bodies Corrupt Practices
Act 1889 Act and members are not "agents" for the
purposes of the Prevention of Corruption Act 1906 Act. There
is a degree of uncertainty around whether a member can be liable
for the common law offence of bribery, which applies to persons
"in a public office". In line with the recommendation
of the 1999 Joint Committee on Parliamentary Privilege, the
draft Bill brings Members of both Houses within the statutory
law of bribery.
2. Please could you supply a list of foreign
countries which have laws that permit bribery, or which require
officials to accept "advantages"?
We are not aware of any countries that have
laws permitting or requiring officials to accept "advantages".
We are aware, however, that some countries, for example, the United
States of America (Foreign Corrupt Practices Act) provide for
a limited exception for small "facilitation payments"
made to facilitate or expedite "routine governmental action".
Our Bill provides no such exception. Most countries are signatories
to one or more of the international instruments which require
member states to criminalise bribery. The United Nations Convention
against Corruption (UNCAC), which entered into force on 14 December
2005, has been signed by 140 countries, of which so far 136 countries
have ratified the Convention. We do not maintain comprehensive
information about the law in other countries that would allow
us to confirm whether or not their laws address bribery in all
its forms.
3. Please could you supply pathways for the
offences in clauses 4 and 5 of the draft bill?
Clause 4—Bribery of a Foreign Public Official
Step 1—The pathway starts with the conduct
element. This is expressed as bribery of the foreign public official
("F") by a person ("P") (clause 4(1)).
Step 2—One needs then to assess whether
what P did amounted to "bribery" for the purpose of
the Clause (clause 4(3)).
Subsection (3) provides 2 possibilities.
1. P offers, promises or gives any financial
or other advantage (not defined) to F, which is not legitimately
due to F. The offer, promise or gift can be made directly or through
a third party; or
2. P offers, promises or gives any financial
or other advantage to a person other than F but at F's request,
or with Fs assent or acquiescence, which would not be legitimately
due to F if the offer, promise or gift was made directly to F.
Again the offer, promise or gift can be made directly or through
a third party.
Step 3—Then one needs to consider whether
the advantage can or cannot be regarded as not legitimately due
to F. Clause 4 (4) makes it clear that an advantage is only
legitimately due of the law applicable to F permits or requires
F to accept it.
Step 4—The next step is to look at P's
intentions in order to assess whether a fault element can be established
(clause 4 (1) and (2)). In order to establish the fault element
P needs to intend:
1. to influence F in F's capacity as a foreign
public official; and
2. to obtain or retain a business or a business
advantage.
Clause 5—Failure of commercial organisations
to prevent bribery
The pathway starts with the conduct element.
This has two parts, both of which must be satisfied for the commission
of the offence:
Step 1—Has a person ("A") performing
services for or on behalf of a commercial organisation bribed
another person in connection with the organisation's business
(clause 5(1) (a) and (b))? Performing services is defined in clause
6. A commercial organisation is defined at clause 5 (7).
Step 2—In order to fulfil Step 1 it
is necessary to establish if A has committed an offence under
clause 1 or 4 of the draft Bill (clause 5 (2))
(although there's no need for a conviction) and it does not matter
whether the offence is committed in E&W, NI or elsewhere (clause
7(5)).
Step 3—Is there a person responsible for
preventing bribery? If the organisation has not appointed any
such responsible person the responsibility will fall to a senior
officer of the organisation.
Step 4—Has a responsible person, or a
number of such persons taken together, been negligent in failing
to prevent the bribe (clause 5(1)(c))?
If the requirements in these four steps are
satisfied then the Clause 5 offence is made out.
Step 4—However, save for circumstances
in which the negligent failure to prevent bribery was on the part
of a senior officer (clause 5(5)), the organisation has a full
defence to a charge under this clause if it can show that it had
adequate procedures in place designed to prevent persons from
committing bribery offences (clause 5(4)).
4. Is Scotland considering similar legislation?
If not, how will the UK-wide obligations under the OCED convention
(among others) be addressed?
We have shared details of our proposed legislation
with the Scottish Executive. It is for Scottish Ministers to consider
whether any similar changes will be necessary to Scots law and
the process by which any changes might be achieved. The Scottish
Government is equally aware of the need to comply fully with our
international obligations against bribery.
5. Please could you elaborate on the partial
impact assessment that was published alongside the draft bill,
including a response to the following issues:
(a) In the section entitled "what is
the problem? why is Government intervention necessary?",
there is no mention of the need to comply with the UK's international
obligations. Please could you supply a list of all the relevant
treaties and conventions, compliance with which will be enabled
by the draft bill?
The various international Conventions and other
instruments on bribery that are currently binding on the UK are
set out in detail in Appendix A of the Law Commission's Consultation
Paper (CP No. 185) and listed below:
The 1999 OECD Convention on combating the
bribery of foreign public officials in international business
transactions;
The 2002 Council of Europe Criminal Law
Convention on Corruption and the 2005 additional protocol;
The 2003 UN Convention Against Corruption;
European Union instruments
The First Protocol of the 1995 Convention
on the protection of the European
Communities' financial interests;
The Second Protocol of the 1995 Convention
on the protection of the European Communities' financial interests;
The Convention of 1997 on the fight against
corruption involving officials of the European Communities or
officials of member states of the European Union;
The Council Framework Decision 568 of 2003 on
combating corruption in the private sector.
(b) To what extent would the Ministry of Justice
consider the improvement of public sector provision domestically
and also across the developing world to be a relevant objective
under the "policy objectives" section?
Bribery poses a risk to the provision of efficient
public services, both in this country and in the developing world.
Although the UK is recognised as one of the least corrupt countries
in the world we must, as all countries must, be concerned about
the threat it poses to the integrity of our public authorities,
achieving value for money in public procurement and fair access
to services. But the damaging impact is most evident in the developing
world where significant funds can be diverted away from social
and infrastructure projects and it has the effect of lowering
the standard of living for the poorest of societies. It is important
that that we have modern and comprehensive legislation in place
to tackle bribery effectively whether it occurs at home or abroad
and in the public or commercial sectors.
(c) Please could you provide a fuller list
of the risks posed by bribery, including the risks to ordinary
citizens who experience the effects of corruption on the facilities
that they use for day-to-day life?
There are multiple and wide-ranging risks associated
with societies exposed to bribery:
— It undermines good governance in public
and commercial sectors as well as democratic systems and values.
— It restricts access, particularly in
developing countries, to essential public services such as health,
education and public utilities.
— It distorts the supply of goods and services
and in so doing inhibits free and fair competition and undermines
the delivery of value for money in public procurement.
— It increases the risks and costs of doing
business, with a particular impact on small enterprises; it also
denies tax revenue to the wider benefit of society.
— It adversely affects investment and economic
growth, particularly in vulnerable developing countries with a
negative impact on foreign direct investment equivalent to an
extra 20 per cent in tax.
As part of your response, please could you supply
an explanation of why a fuller impact assessment was not produced
at this stage.
A draft implementation stage impact assessment
was published alongside the draft Bribery Bill. This provided
a preliminary assessment of the potential impact of the new offences
in the draft Bill. Impact assessments are usually developed as
a continuous process from the initial identification of policy
challenges and options through public consultation and on to implementation.
In the case of bribery, there has been a protracted and faltering
history to proposals for reform but the Government's draft Bill
was informed by the report of the Law Commission in November 2008.
This report represented a new approach to reform of the law on
bribery and included two new discrete offences. There was limited
opportunity ahead of the publication of the draft Bill for the
Government to prepare a detailed impact assessment. The approach
taken therefore was to publish the proposals as draft legislation
and to develop the impact assessment further once it was published.
June 2009
| 
