Bribery – A Victimless Crime? An in-depth look at the new Bribery Act
Under the terms of the new Bribery Act, which comes into force in April 2011, UK businesses are going to be subjected to much greater scrutiny regarding the way commercial deals are secured, both domestically and abroad. However, while the new laws aim to modernise and simplify existing bribery legislation, the absence of words such as ‘dishonesty' and ‘corruption' anywhere in the new Act, are likely to generate challenges to businesses attempting to understand and work within the new parameters. Following a seminar about the new Act, JABE considers the issues.
Root and branch review of Bribery laws
"The new Bribery Act is quite radical," says Monty Raphael, Special Counsel at Peters & Peters, and a leading authority on white collar crime. "It's the first root and branch review of Britain's bribery laws for over 100 years, and does away with all previous laws - statutes and common laws. Under the new Act, which applies to domestic, commercial and overseas bribery, four offences have been created. However, the words ‘dishonesty' and ‘corruption' are not mentioned anywhere."
This, combined with an absence of detailed guidance to accompany the new legislation, is already having an impact on businesses, claims Raphael. "The guidance will be generic - there won't be any prescriptive guidance or box ticking, which is making people nervous, for fear of punishment.
"Additionally, the offence of having inadequate procedures to prevent bribery, as detailed in Section 7 of the Act, is a very controversial offence, as a company can become vicariously liable if an employee is involved with bribery."
Impacting overseas commercial activities
A core aspect of the new legislation will be the conduct of British businesses abroad, something designed to "give force to Britain's international obligations", explains Court of Appeal Judge, Lord Justice Rix.
As such, it reflects a collective international effort to address the problem of bribery.
"There is a UN Convention against bribery, but there are many countries in the world where bribery remains endemic. This means the wholesale corrosion of morality. It is also wholesale theft from the people of those countries.
"There is now a growing realisation around the world that if some of the problems of poverty in the developing world are going to be seriously addressed, the issues of corruption need to be seriously addressed," adds Lord Justice Rix.
In response to whether there is a correlation between corruption in society and corruption in the judiciary, Lord Justice Rix said: "If a society knows that it won't get justice from its judicial system, then you have the end of honesty in that country."
A modern day slavery
Lord Justice Rix draws a parallel between the contemporary attempt to attack corruption, and the abolition of the slave trade in the 19th century, and between the misery of slavery and the impoverishment of millions of people by corruption.
"Despite the importance of slaves in the economy of British plantations in the West Indies (a source of great prosperity at that time), the issue of slavery was taken up by Britain, although it took many decades for the abolitionists to succeed, and further time for much of the rest of the world to follow. But they did. So, as for the new bribery laws, we now need to think of the problem in similar terms: Are we in favour of slavery or against it? Are we in favour of corruption or against it? And to do so against the background of vast numbers of people around the world who are impoverished in part by the corruption of their leaders. If we can find a solution to that corruption, you will see that the government and leadership in those countries will improve no end - and we will all be the better for it," he says.
Overcoming cultural nuances
In reaching this state of honesty and transparency in commercial dealings, local ‘customs', such as facilitation payments, also need to be taken into account in determining what is actually classified as a bribe.
"Facilitation payments are small standard payments you have to make in many countries, if you want anyone to do anything for you," explains Lord Justice Rix, "such as get a driving license, or being allowed into an airport. I'm not talking about a license fee, but a ‘personal' payment.
"This means that where the Act refers to ‘any' advantage being gained, the prosecutor may well have to exercise a discretion to prosecute only in cases where the payment made is unreasonable or disproportionate. The OECD Convention refers to ‘undue' advantage. However, we pride ourselves on the rule of law, but if you enact a law quite deliberately to refer to ‘any' advantage, but then give the prosecution the power of discretion, there are dangers for the rule of law."
According to JABE Rabbinical Consultant, Rabbi Dovid Roberts, Halacha (Jewish law) is more lenient in this area. "The Bribery Act's jurisdictional reach appears to go way beyond anything Jewish law would require. From a Jewish ethical perspective, as framed within Halacha, it would take a more relaxed attitude. What's the definition of a bribe? When is something marketing, and when is it a bribe? When does corporate hospitality become a bribe?
"It goes without saying that the payment of a bribe can't be condoned. The area of facilitation payments, in order to gain an equal footing rather than an undue advantage - if that was the prevailing commercial custom - might be acceptable from a Halachic perspective. Clearly, though, from the law of the land, it would be unacceptable."
But Monty Raphael says there is no room for distinction in this area. "Far be it from me, as a defence lawyer, to disagree with a Lord Justice and a Rabbi, but there's nothing extraordinary about this legislation at all! The payment of facilitation payments has become systemic. We don't want to encourage a culture of corruption. Small payments paid to public servants undermine the integrity as much as large payments. If you allow this, facilitation payments will become the order of the day. You have to draw a moral line, however uncomfortable it may be! You have to pray the prosecution get it right, and by and large, they do!"
He also emphasises the need for consistency of approach by legislatures and law enforcement agencies, if bribery is to be effectively dealt with on an international scale.
"The message has to be, naïve or otherwise, that business can't be conducted through corruption," says Raphael firmly. "If you have a corrupt society, the rule of law is completely undermined. You can't regulate money laundering, if you have corrupt banking officials. The same goes for our country and other countries...you can't have one rule for this country, and another for other countries."
