Memorandum submitted by Transparency International
(UK) (BB 54)
When giving evidence to the Joint Committee
on 11th June 2009, the Chairman asked Jeremy Carver and Mark Pyman
representing TI(UK) to provide written answers to the last four
of the written questions provided in advance by the Committee.
We do so below, providing the text of each question. Jeremy Carver
was subsequently asked on behalf of the Committee to answer two
specific supplementary questions, the answers to which are also
set out.
TI(UK) expresses its appreciation to the Committee
for inviting its evidence on this draft Bill. We trust that our
general remarks were sufficiently clear and understood. We remain
utterly convinced of the need for the Government urgently to introduce
a Bribery Bill, in no weaker terms than the draft, at the earliest
opportunity. Twelve years of consultation, consideration and procrastination
have generated a draft Bill which, while not perfect, is an enormous
improvement on the present ineffective law.
Q.23 To obtain a view on the proposed narrowing
of parliamentary privilege.
Recalling the reasoning of the Joint Committee
on the draft Corruption Bill (HL paper 157 & HC
paper 705, 31 July 2003, paragraph 134) TI(UK) supports
the proposal.
Q.24 To obtain a view on the extra-territorial
reach of the draft Bill.
TI(UK) agrees with the draft Bill in ensuring
that prosecutions can be brought if the act or omission is by
a person with a close association (as defined) with the United
Kingdom. This country plays an extraordinarily broad role as a
market forum for commercial transactions and international services;
and there is a national interest in ensuring that this huge volume
of business is encouraged, and is conducted to high standards,
without which the country's reputation is damaged and the economy
suffers. English civil law is chosen to govern transactions having
little or no connection with the United Kingdom. It is appropriate
that UK anti-bribery law should have a similar reach. TI(UK) supports
the proposed provision.
Q.25 To explore whether the power to authorise
bribery by the security services is appropriate and compatible
with the UK's international obligations.
TI(UK) opposes the entire Clause 13 of
the draft Bill. As the Committee heard from Mr Bonucci, the OECD
Working Group on Bribery is aware of no provision of law anywhere
whereby bribery is expressly sanctioned; and we share the WGB's
astonishment that the Government should have put forward such
a provision. While we welcome the Government's openness in acknowledging
that bribery may be used by the security services, we have the
gravest doubts as to whether any worthwhile long-term national
interest is served. If the security services can make a case for
such an "opt-out", they should present it for appropriate
parliamentary scrutiny; and it should form no part of any general
law of bribery.
Q.26 To explore the extent to which facilitation
payments and corporate hospitality will be unlawful; and to ascertain
whether prosecutorial discretion can be relied upon to ensure
that enforcement is well targeted.
It has been the long-standing policy of Transparency
International to oppose the use of facilitation payments. At its
Annual Membership Meeting in October 2007, TI resolved formally
to advocate for revisions of national and international laws to
eliminate tolerance of facilitation payments. In a 2002 survey,
TI found that the United Kingdom was one of nine OECD member States
to have criminalised the payment of facilitation payments, the
others being: Belgium, Finland, Italy, Luxembourg, Netherlands,
Norway, Slovenia and Spain. It would be inconceivable that a Bill
modernising and reforming the UK law on bribery should step backwards
on this point. Other countries have perhaps taken their lead from
the US FCPA, which was adopted in 1976, when there was perhaps
greater tolerance of facilitation payments than exists today.
TI(UK) would expect that prosecutors would develop
sensible criteria for assessing when prosecution was justified,
and these too would evolve in the light of experience. At a time
of greater scrutiny of inappropriate costs, companies are increasingly
adopting strict and enforceable internal codes on use of hospitality
and other inducements for business; just as government departments
and public bodies have done. Their attempts to maintain good business
practice would be undermined by legislation that provided any
"opt out". These codes of conduct will in turn help
to inform prosecutors where lines should be drawn.
Supplemenary question 1: You stated that the
"legitimately due" test should be removed from Clause
4. Would this lead to any conduct being criminalised which should
not be criminalised? In particular, should clause 4 be amended
to require the "advantage" to be "undue" or
"improper"?
TI(UK) confirms its view that the "legitimately
due" test is misconceived and inappropriate in this Bill.
Essentially, pressure to retain or even enlarge this additional
hurdle to prosecution is directed at supporting the "business-as-usual"
approach which we consider both wrong in practice and contrary
to our international commitments under various Conventions. Clause
4 is specifically designed to leave no doubt whatsoever of
our fulfilment of the OECD Anti-Bribery Convention, and this test
is not consistent with the Convention. In their evidence, the
OECD Working Group on Bribery expressed similar views, and explained
that of their 38 member States, only five had included a
much clearer test based on "written" general law[188]—the
rest have no exception in this regard whatsoever. If the United
Kingdom adopts the present language, it will be asked by other
OECD Convention States to change it—as happened to Australia
when they had similar language in their earlier bribery law.
The concern seems to be that, with no further
test, the offence can be established on the basis of proving a
payment to foreign public official, irrespective of the motive
behind the payment. This was and remains the aim of the Convention,
as Commentary 7 makes clear.[189]
Present UK law criminalises payments to public officials with
a rebuttable presumption that the payment is improper. The Law
Commission, in recommending a defence based on "reasonable
belief" that a payment is legitimately due (Reforming
Bribery, para 7.47), placed the burden of proving the defence
on the bribe-payer (paragraph 7.49). The draft Bill seems to have
reversed this so that the prosecution would have to prove the
negative, which places the prosecution back in the present unsatisfactory
situation of being unable to prosecute a bribe payer if there
are doubts as to whether the payment was authorised.[190]
In TI(UK)'s view, the test should be removed
from Clause 4, and not replaced by a requirement that the payment
be "undue" or "improper". The OECD Convention
requires that payments to foreign public officials be criminalised;
and that should be our standard. We doubt the risk that "innocent"
conduct will be criminalised, because prosecutors are unlikely
to prosecute if the circumstances are plainly innocent. The risk
is the far greater one that companies will make payments to foreign
public officials under cover of "fuzziness" of domestic
law, or a spurious legal opinion.
Supplementary Question 2: It has been suggested
that clause 5 should be turned into a civil regulatory regime
for imposing fines on companies rather than imposing a criminal
offence. This would leave corporate criminal liability for bribery
to be addressed (as with other criminal offences) by the Law Commission's
ongoing review. What are your views, including whether a civil
regime would meet the UK's international commitments?
TI(UK) does not believe this would provide a
better answer. The importance of criminal sanctions for corporate
wrongdoing is well established in many areas of business regulation
in the United Kingdom.[191]
It would weaken the impact of the law significantly if this were
not to be criminal, ie a mere regulatory breach.
The general review of corporate liability—which
can in any case be expected to take years to result in legislation—can
usefully be informed by the experience developed here in relation
to bribery. Should it prove necessary, it would be far easier
to amend the bribery offence at some point in the future to bring
it in line with a general enactment, than to re-institute criminal
liability into the bribery regime having failed to adopt it in
the first place.
Article 4 of the OECD Convention requires
States to criminalize corporate bribery to the extent that our
law allows, and there is no inability here to criminalize corporate
conduct. For the United Kingdom to back off meeting its treaty
obligations because of concern about the impact of the EU procurement
rules on those who pay bribes would be hypocritical and wrong.
June 2009
188 Australia, Canada, Korea, New Zealand and the United
States. This suggests that Professor Zerbes' comment that "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 criminalized."
is mistaken. It is clearly not correct that the foreign written
law exception is "integral" to the offence. Back
189
Commentary 8 recognises a narrower exception reflecting the
much earlier language of the FCPA; but there would be little doubt
in the light of more recent events that even the narrower language
could introduce unhealthy confusion, and undermine the Convention. Back
190
This was precisely the concern of the then Attorney General when
he gave an interview to the Financial Times on his reasons why
the criminal investigation of the Al-Yamama project had to be
discontinued. Back
191
Contrast Germany, where punitive administrative fines are used
in the absence of corporate liability in the penal code. Back
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