Overview
The coming into force of Bribery Act (“the Act”) on 1 July 2011 marked a watershed moment for UK corporate culture by providing a consolidated scheme of bribery offences.
The Act makes it an offence for a UK national, or a person in the UK, to pay or receive a bribe, with the key distinction in the legislation being between those who offer and receive bribes. The most controversial aspect of the Act is the onus on commercial organisations to prevent bribery.
The Act repealed three statutes – the Public Body Corrupt Practices Act 1989, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916. These will still apply, however, to offences committed prior to 1 July 2011.
General bribery offences
Sections 1 to 2 of the Act set out the theoretical scenarios upon which the general offences are based.
Section 1 of the Act deals specifically with the conduct of the person offering the bribe to a recipient.
(1) The offence of bribing another person
Case 1 – A person promises or gives financial or other advantage to another person and intends that advantage either to induce or to reward the improper performance of a relevant function or activity.
Case 2 – A person offers, promises or gives a financial or other advantage to a person and he knows or believes that the mere acceptance of the advantage would itself constitute the improper performance of a relevant function or activity.
Case 1 is illustrative of a scenario where a person rewards improper conduct, e.g., offers a bribe to avoid the imposition of a fine. Case 2, by contrast, is designed to capture those cases where the person offering a reward to a recipient is not doing so to obtain an advantage but nevertheless knows that it would be wrong, due to the recipient’s position, for them to receive it. An example would be a person sending an unsolicited payment to a government official, acceptance of which would constitute improper performance of that official’s function.
Section 2 of the Act deals with the conduct of the person receiving the bribe
(2) Offences relating to being bribed
Case 3 – A person directly or indirectly requests, agrees to receive or accepts a financial or other advantage intending that, in consequence, a relevant function or activity should be performed improperly (whether by him or another person).
Case 4 – A person directly or indirectly requests, agrees to receive or accepts a financial or other advantage where that request, agreement or acceptance itself constitutes the improper performance by him of a relevant function or activity.
Case 5 – A person directly or indirectly requests, agrees to receive or accepts a financial or other advantage as a reward for the improper performance (whether by himself or another person) of a relevant function or activity.
Case 6 – In anticipation or in consequence of a person directly or indirectly requesting, agreeing to receive or accepting a financial or other advantage, a relevant function or activity is performed improperly by him or another person at his request or with his assent or acquiescence.
Cases 3 and 4 mirror Cases 1 and 2 in that they are the same scenario but deal with the recipient of the bribe.
In Cases 4 to 6 it does not matter whether the person (or another person) knows or believes that the performance of the relevant function or activity is improper.
“Relevant function” is defined at section 3(2) of the Act as being (a) any function of a public nature, (b) any activity connected with a business (including a trade or profession), (c) any activity performed in the course of a person’s employment, or (d) any activity performed by or on behalf of a body of persons, provided that the person performing the function or activity is –
Condition A – expected to perform it in good faith,
Condition B – expected to perform it impartially, and / or
Condition C – in a position of trust by virtue of performing it.
A relevant function or activity can be performed in another country, not just the United Kingdom (s.3(6)), and it is performed improperly if it is in breach of a “relevant expectation” (s.4(1)(a)). A failure to perform the relevant function or activity amounts to improper performance if that failure is a breach of a relevant expectation (s.4(1)(b)).
The “expectation” test is set out at section 5(1) of the Act: what a reasonable person in the United Kingdom would expect of the performance of the relevant function or activity.
Bribery of foreign public officials
A person is guilty of an offence under section 6 of the Act if they bribe a foreign public official (“F”) intending to influence them in their capacity as an official while intending to obtain or retain business, or an advantage related to the conduct of that business.
A foreign public official is defined at section 6(5) of the Act as someone who:
Holds a legislative, administrative or judicial position of any kind (of a country outside the United Kingdom).
Exercises a “public function” for or on behalf of a country outside the United Kingdom, or for a public agency or enterprise of that country.
Is an official or agent of a public international organisation.
It is implicit that influencing a foreign public official, and thereby gaining an advantage, is improper per se.
There is no requirement for proof that the foreign public official was bribed to carry out their function improperly: an “intention to influence” suffices for the purposes of s.6 of the Act. It therefore has a wider ambit that s.1.
Under s.6(3), however, prosecutors must prove that a person offered, promised or gave any financial assistance or other advantage to a foreign public official, but also that F was neither permitted nor required by the written law applicable to him to be influenced in his capacity as an official by the offer, promise or gift. This “written law” exception is set out at s.6(3)(b) and allows for legitimate business customs.
Failure of commercial organisations to prevent bribery
Section 7 applies to commercial organisations that are corporate bodies or partnerships formed under UK law.
The ambit of this section is wide, as it does not matter where in the world the organisation carries out its business and includes those that carries out a part of its business in the UK.
Commercial organisations will be guilty of an offence where a person associated with them bribes another person intending to obtain or retain business, or an advantage in conducting business.
An associated person is defined at s.8 of the Act as performing services for or on behalf of a commercial organisation. The territorial application condition of “close connection” in s.12(2)(c) does not apply and therefore s.7 has a wider ambit than the offences at s.1 and s.6. Although there is no need for separate prosecutions under s.1 and s.6, there needs to be sufficient evidence of either offence for the purposes of a prosecution under s.7.
S.7(2) provides a defence: it is for the organisation to show on the balance of probabilities that it has put in place adequate procedures designed to prevent bribery. s.9 of the Act requires the government to publish guidance about procedures that commercial organisations can implement to qualify for the defence under s.7(2).
The six principles published by the British government are as follows:
Proportionate procedures – procedures to prevent bribery should be proportionate to the risks faced and to the nature, scale and complexity of the commercial organisation’s activities.
Top-level commitment – management of a commercial organisation must involve itself in determining bribery prevention procedures, foster a culture in which bribery is never acceptable, and not isolate itself from taking key decisions relating to bribery risks where that is appropriate within the organisation’s management structure.
Risk assessment – commercial organisations should periodically assess and document the nature and extent of their exposure to potential risks of bribery, both internal and external. That assessment should then be used to inform their anti-bribery procedures.
Due diligence – due diligence procedures should be applied in respect of persons who perform, or will perform, services for or on behalf of the commercial organisation.
Communication – anti-bribery policies and procedures should be embedded and understood throughout an organisation through internal and external communication, including appropriate and proportionate training.
Monitoring and review – procedures designed to prevent bribery should be monitored, reviewed and amended where necessary. This is particularly relevant where the nature and scale of an organisation’s activities has changed over time.
Territorial application under section 12 of the Act
Section 12 of the Act provides that an offence is committed under ss.1, 2 or 6 in the England, Scotland, Wales or Northern Ireland if any act or omission forming part of the offence takes place in the United Kingdom.
Even if such an act or omission does not take place in the United Kingdom, under s.12(2)(c) a person can be prosecuted if they have a “close connection” to the United Kingdom. The meaning of “close connection” was expanded at s.12(4) and includes persons holding British citizenship, persons residence in the United Kingdom, or a body incorporated in the United Kingdom.
Statutory defence
Section 13 of the Act provides a defence for a person charged with a bribery offence if they prove that their conduct was necessary for the proper exercise of any function of an intelligence service or of the armed forces.
Allocation
The offence of failure by a commercial organisation to prevent bribery under s.7 of the Act is indictable only. Offences contrary to ss.1, 2 and 6 are triable in the Magistrates’ Court or the Crown Court.
Sentence
For an individual on conviction on indictment for offences under ss.1, 2, and 6, the maximum sentence is 10 years’ imprisonment or a fine, or both (s.11(1)).
The maximum sentence for any other person on conviction on indictment is a fine (s.11(2)).
A person convicted on indictment of an offence under s.7 is liable to a fine (s.11(3)).
The Sentencing Council definitive guideline on bribery offences applies to all offenders over the age of 18 and to organisations, and covers offences contrary to ss.1, 2, and 6, and the failure of commercial organisations to prevent bribery at s.7.
Guest written by Eleanor Fox from 2 Hare Court chambers.
Legal disclaimer: Articles are intended as an introduction to the topic and do not constitute legal advice. The information contained herein is accurate at the date of publication but please note that the law is ever changing and evolving. If you require advice in relation to any matter raised in this article please contact a member of the team.