Transcript UK Bribery Act 2010

UK Bribery Act 2010
Ben Tonner Andrew De La Rosa
October 2012
Outline
•
•
•
•
•
•
•
Background to the Act
General offences
Public service and private individuals
Corporate offence
(Extra) Territorial application
Guidance
Penalties – 10 years/unlimited fine
2
Why has the Act been implemented?
Guidance:
‘Bribery blights lives. Its immediate victims include firms
that lose out unfairly. The wider victims are government
and society, undermined by a weakened rule of law and
damaged social and economic development. At stake is the
principle of free and fair competition, which stands
diminished by each bribe offered or accepted.’
Kenneth Clarke, Secretary of State for Justice
March 2011
3
Why has the Act been implemented?
Victims?
“Krysha”
“Shaken Down”
4
Why has the Act been implemented?
Victims.
5
Pre - Bribery Act 2010 -UK
– Common law,
– The Public Bodies Corrupt Practice Act 1889,
– The Prevention of Corruption Act 1906, and
– The Prevention of Corruption Act 1916.
6
Pre - Bribery Act 2010 International
• US Foreign Corrupt Practices Act 1977 (as amended 1988 and
1998)
• OECD Convention on Combating Bribery of Foreign Public
Officials in International Business 1997
• UN Convention Against Corruption 2005
• Cayman Islands Anti-Corruption Law 2008 (brought into force
1.1.2010)
7
The Essential Focus
• Was (up to the Cayman and UK Acts) on the paying side of the proscribed
transaction
• and related to payments to foreign government officials
• despite the fact that bribery is certainly not the exclusive preserve of
officialdom.
• Anti-bribery measures now much wider and emphasis is on risk
assessment and compliance regimes
8
The US FCPA 1977 - 1
• Post-Watergate era legislation - Congress found over 400 US corporations
bribed foreign officials and\or political parties to obtain contracts or other
advantages
• Overall scheme of legislation to (a) prohibit corrupt payments to foreign
government officials\politicians, (b) impose accounting\reporting
requirements to ensure disclosure, but
• (c) permit a little “grease” in the form of facilitation payments to secure
performance of non-discretionary foreign government services (1988
amendments).
9
The US FCPA 1977 - 2
• Prohibitions extend to an improper payment to “any person, while
knowing that all or a portion of such money or thing of value will be
offered, given or promised, directly or indirectly, to any foreign official [or
political party, party official or candidate]”
• The actions of foreign subsidiaries and other third parties (perhaps
especially sales agents, lobbyists and joint venturers, but also consultants
and distributors) can result in FPCA liability
• 90% of FCPA cases involve such third parties. The US government does not
lose these cases.
10
Cayman Islands Anti-Corruption Law 2008 - 1
• Sought to give effect to UN and OECD conventions; drew on legislative
precedents from Australia to Zambia, but especially Canadian Criminal
Code
• Part 3 offences: Series of specific prohibitions on domestic corruption of
“public officials”\MLAs, including trafficking in public appointments and
frauds on the government (“influence peddling”)
• It does not stop there: Law also criminalises (a) fraud or breach of trust by
public official and (b) non-disclosure of conflicts of interest
11
Cayman Islands Anti-Corruption Law 2008 - 2
• Bribery of a foreign public official punishable by a sentence of up to 14
years imprisonment, but savings provisions and facilitation payments
exception exist in terms close to those of the FCPA
• “Secret commissions” payable to an agent also prohibited (section 1, UK
1906 Act)
• Administration of Law - Anti-Corruption Commission
• Compare UK Act: 17 pages v. 54, but also different territorial restrictions
12
UK Act - 4 offences
 The general offence of giving a bribe (s.1);
 The general offence of receiving a bribe (s.2):
 The specific offence of bribing a foreign official
(s.6); and
 A corporate offence targeting companies who fail
to prevent their employees participating in
corruption (s.7).
13
Penalties
• 10 years
and/or
• Unlimited fine
• Either way (s.1, 2 and 6)
• Indictable only (s.7)
14
Section 1:
Bribing another
Elements
• Offering, promising or giving
• Financial or other advantage
• Intending to induce
• Improper performance
• Relevant function
15
Section 2: Being bribed
Elements
• Requesting or receiving
• Financial or other advantage
• Intending
• Improper performance
• Relevant function
16
Definitions
•
•
•
•
•
•
Bribery is not Conspiracy
Advantage (undefined)
Relevant function or activity (s.3)
Place of commission (irrelevant) (s.3(6))
Improper performance (s.4)
Reasonable person (s.5)
17
Jurisdiction (s.12)
• Part of offence takes place in UK
OR
• Anyone with close connection to the UK
18
Jurisdiction
• 12(4) ‘a person has a close connection with the United Kingdom if,
and only if, the person was one of the following at the time the acts
or omissions concerned were done or made—
• (a) a British citizen,
• (b) a British overseas territories citizen,
• (c) a British National (Overseas),
• (d) a British Overseas citizen,
• (e) a person who under the British Nationality Act 1981 was a
British subject,
• (f) a British protected person within the meaning of that Act,
• (g) an individual ordinarily resident in the United Kingdom,
• (h) a body incorporated under the law of any part of the United
Kingdom,
19
Corporate liability under s.1 and 2
• S. 14
• ‘Consent or connivance’
• Senior officer
20
Bribery of foreign public officials (s.6)
• 10 years/unlimited fine
• Either way offence
• Offence of bribing, not being bribed
• Jurisdiction
• Corporate liability
21
Foreign public officials: Elements
• Intention to influence foreign official in his
capacity as foreign official
• To obtain, retain business or gain advantage in
business
• By offering a financial or other advantage
• Which is not permitted by the laws of that
country
22
Facilitation payments
•
•
•
•
Usually small
To secure or expedite
Performance of a routine action
To which the payer is entitled in any event
=Illegal
23
Failure of Companies to Prevent Bribery
(s.7)
• Supplements ‘Identification Principle’
• Address culture of bribe making/taking
• Indictable only
• Unlimited fine
24
Failure to Prevent: Elements
• Person associated (s.8)
• With a ‘relevant organisation’ (s. 7(5))
• Committing offence under s. 1 or 6
25
Failure to prevent: Defence
• Adequate procedures
• Guidance (s.9)
– 6 key principles:
(i) Proportionate procedures;
(ii)Top-level commitment;
(iii)Risk assessment;
(iv)Due Diligence;
(v)Communication and training;
(vi)Monitoring and review.
•
Case studies
26
Bribery Act - Territorial Reach
•
Section 7 of the Act relates to liability for third party acts. A relevant “CO” includes
any company, regardless of place of incorporation, or partnership that “carries on
business” in the UK
•
UK MOJ published guidance suggests that a “demonstrable business presence” in
the UK will be required; neither listing on the LSE nor having a UK subsidiary will
necessarily be enough
•
A “person associated” with a CO can include contractors, suppliers and joint
venturers who are neither UK nationals or residents; it “does not matter” where
the acts constituting the offence take place, whether wholly or partly outside the
UK
27
Bribery Act - Whose Morals Matter?
• The definition of “relevant function or activity” is not confined to the
exercise of government authority but includes “any activity connected
with a business” and “any activity performed in the course of a person’s
employment” - s. 3
• Moreover, such a function or activity is performed improperly if
performed in breach of a “relevant expectation” - s. 4
• What is a relevant expectation is to be judged by what “a reasonable
person in the United Kingdom would expect” - s. 5
28
Corporate hospitality
• Entertaining, meals, receptions,
tickets
• The distinction between
hospitality and gifts can blur
• Where the giver does not attend
29
Decision to prosecute
• S.10 Consent to prosecute
• Ministry Guidance notes
• Joint Prosecution Guidance
• Prosecutorial discretion
– Evidential test
– Public interest
30
Decision to prosecute
• Self reporting
• Co-operation agreements
• Settlement agreements
• Deferred prosecution
31
Penalties
• S.11
• Case law
• Ancillary orders
– Compensation/reparation
– Directors disqualification orders
– Prosecution costs
– Confiscation (POCA 2002)
– Tendering for public contracts
32
UK Bribery Act 2010
Ben Tonner
[email protected]
1 345 949 2740
Andrew De La Rosa
[email protected]
1 345 769 4508
October 2012