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The Law Commission
(LAW COM No 313)
REFORMING BRIBERY
Laid before Parliament by the Lord Chancellor and Secretary of State for Justice pursuant to section 3(2) of the Law Commissions Act 1965
Ordered by The House of Commons to be printed 19 November 2008
HC 928
London: The Stationery Office
Łxx.xx
ii
THE LAW COMMISSION
The Law Commission was set up by the Law Commissions Act 1965 for the purpose of promoting the reform of the law.
The Law Commissioners are:
The Right Honourable Lord Justice Etherton, Chairman Professor Elizabeth Cooke Mr David Hertzell Professor Jeremy Horder Mr Kenneth Parker QC
The Chief Executive of the Law Commission is Mr William Arnold.
The Law Commission is located at Steel House, 11 Tothill Street, London SW1H 9LJ.
The terms of this report were agreed on 2 October 2008.
The text of this report is available on the Internet at:
iii
THE LAW COMMISSION
REFORMING BRIBERY
CONTENTS
SUMMARY
PART 1: INTRODUCTION
Introduction
Outline of the scheme recommended
Structure of this report
Paragraph
Page
xiii
1
1
2
3
PART 2: THE CURRENT LAW, ITS DEFECTS AND PREVIOUS ATTEMPTS AT REFORM
The current law
Bribery at common law
The bribe: “any undue reward”
A public officer
The mental element The 1889 Act
The bribe: “gift, loan, fee, reward or advantage”
A “public body” The 1906 Act
The bribe: “any gift or consideration”
An “agent”
The 1916 Act
Extra-territorial jurisdiction
Problems with the current law
Fragmentation
Imperfect distinction between public and private sector bribery
Inconsistencies and uncertainties in terminology and scope
The bribe
Those capable of being bribed
Connections between the bribe and the conduct influenced
The meaning of corruptly
Lacuna where bribery is committed outside England and Wales
The background to the project
Our previous report on corruption
5
5
5
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6
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The Government’s response to the previous report
The Joint Committee on the draft Corruption Bill
The Government’s response to the Joint Committee
The most recent Government consultation and our second referral
Paragraph    Page
2.36                13
2.37                13
2.38                13
2.39                14
PART 3: THE ELEMENTS OF THE GENERAL OFFENCES
Our recommendations in brief
The threshold condition
P’s offence
The basic element
The wrongfulness element: seeking a favour from R
The wrongfulness element: compromising R
R’s offence
The basic element
The wrongfulness element: when R provides a favour
The wrongfulness element: when R compromises him or herself
The “expectation” of propriety
The threshold condition: bribery’s limits as a form of criminal wrongdoing
Avoiding the enforcement of morality in inappropriate contexts
The functions and activities to which the general offences of bribery will apply
The definition of “functions of a public nature”
The definition of trade, profession, employment or business
Companies and unincorporated associations
Past or present functions, trade, employment or business etc activities
Recommendation
Two general offences of bribery
Recommendation
The offence committed by the payer
The basic element of P’s offence
The definition of “advantage”
The offer or promise of an advantage
Should the advantage conferred have to be “undue”?
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3.10 3.12
17
17 17
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23
24
v
Rewarding improper conduct
Recommendation
The wrongfulness element in P’s offence: seeking a favour from R
The proposals in the CP
The element of wrongfulness in P’s conduct when P seeks a favour from R: consultees’ responses
Our revised approach to the wrongfulness element in P’s conduct when P seeks a favour from R
Must the person P approaches be the one to receive the advantage?
Recommendation
The wrongfulness element in P’s conduct: compromising R
Recommendation
The offence committed by the recipient
The basic element of R’s offence
Recommendation
The wrongfulness element of R’s offence
The proposals in the CP
Should we retain the “legal or equitable duty” restriction?
Consultees’ alternative definitions of a “corrupt breach of duty”
Should the “improper act” (breach of duty) in bribery be left undefined?
Should the improper nature of an act be linked to whether it was done “dishonestly”?
Conclusion on the basic definition of the breach of duty
Escaping the confines of “legal or equitable duty”: bribery and fraud
The analogy between bribery and fraud
The overlap between bribery and fraud
The wrongfulness element in R’s conduct: general considerations
Expectations relating to good faith, to impartiality and to a position of trust
Acting in good faith
Remaining impartial
A position of trust
Paragraph
Page
24
24
25
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29
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46
vi
Leaving the matter to the jury
Analogous approaches in other areas of the criminal law
How the jury is to approach the issue
Illustrative difficult cases
Conclusion on the nature of “improper” conduct
R’s awareness of the wrongful nature of his or her conduct
The link between the giving of the advantage and the impropriety
Paths to the commission of bribery by R
Are “public servants” in a special position, justifying a discrete offence
Recommendations
A “short form” summary of P’s and R’s obligations
Paragraph
Page
49
49
50
51
52
53
53
53
57
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60
PART 4: BRIBERY OF A FOREIGN POLICY OFFICIAL – THE BACKGROUND TO AND DEFICIENCIES OF THE CURRENT LAW
The United Kingdom’s obligations under the OECD convention
The current law
The parliamentary background
The part 12 provisions Deficiencies of the current law
The agent/principal relationship
Uncertainty within and inconsistency between definitions
Application to intermediaries and third party beneficiaries
Possible inadequacies of corporate criminal liability
Consent to prosecution
61
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63
65
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67
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PART 5: A DISCRETE OFFENCE OF BRIBING A FOREIGN PUBLIC OFFICIAL
Introduction: A new offence of bribing a foreign public official
Overview of our conclusions
The provisional proposals in the CP
The responses of consultees to the CP
Those in favour of a discrete offence
Those against the provision of a discrete offence
69
69
69
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72
vii
The United Kingdom’s international obligations
The OECD’s Anti-Bribery Convention
The core obligation imposed by the OECD Convention
The limitations of the OECD Convention, and our recommendations
FPO exchanges influence for an advantage for a third party
Third party advantaged, with a view to P influencing the FPO
Providing advantages to a third party to influence the FPO
Advantage exchanged for influence with prospective FPO
FPOs and foreign political parties
The case for a discrete offence of bribing a foreign public official
Demonstrating a commitment to our international obligations
Making it easier to interpret the law in the light of international obligations
Facilitating a comparative approach
Recommendation
The elements of the discrete offence
The offence itself
Changes in the offence from the version in the CP
Illustrating the elements of the offence
The basic case of bribery
Requests by the FPO to benefit a third party
Advantages “not legitimately due”, and facilitation payments
The OECD Convention and the CP
The OECD’s and the CP’s position on facilitation payments
The views of consultees
The phrase “not legitimately due”
Facilitation payments
Our recommended approach to facilitation payment
Conclusion
The fault element of the offence
Intention alone, not recklessness
Paragraph    Page
5.26                74
5.26                74
5.28                74
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viii
Recommendation
Defining foreign public official
An autonomous definition
The problem of political parties and their officials
Officials of public international organisations
Recommendation
Should the discrete offence also inculpate the foreign public official who accepts or solicits a bribe?
The views of consultees
Conclusion
Should the offence extend to bribery of foreign private persons?
Conclusion
Paragraph    Page
5.119               91
5.120       91 5.120               91 5.127               92
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PART 6: THE LIABILITY OF COMPANIES AND LIMITED LIABILITY PARTNERSHIPS FOR BRIBERY
A new offence applicable to companies and limited liability partnerships
Recommendation
Individual liability for consenting to or conniving at the commission of bribery
Recommendation
Criminal liability in context
Should consideration of the extent of direct liability of companies be deferred pending a general review of their criminal liability?
The “identification” doctrine
Consultees’ responses
Recommendation
Should the whole question of organisational liability for bribery be deferred to a general review?
Consultees’ responses
The Woolf Committee report
Our revised view
International obligations binding the UK
The “failure to supervise/failure to prevent” offence: a broader European perspective
The requirements of the OECD Convention respecting the liability of legal persons for bribery of a foreign public official (FPO)
6.1
6.12 6.13 6.25
97
97
98 99
99 99 102
6.25 6.29 6.39 6.40
6.41 6.43 6.52 6.62 6.62
102 103 104 105
105 105 108 111 111
113
ix
Building on the basic obligations under the OECD Convention
Organisational liability for culpably failing to prevent someone acting on the organisation’s behalf committing bribery
What kind of offence is needed and what kind of defences should there be?
Should English law follow this model for bribery?
A fault requirement
An “adequate systems” defence
The scope of the supervision rule
Should a company be liable for failing to prevent bribery committed by one of its subsidiaries?
Should there be a need for bribery to have been proved in separate proceedings?
Conclusion
Individual liability for failure to prevent bribery
Should it be possible, as it is under the Fraud Act 2006, to convict high-ranking individuals who consented to or connived at the commission of the new offence?
Paragraph Page 6.83               115
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PART 7: DEFENCES
Introduction
Conferring an advantage in order to avert what the payer reasonably believed to be an imminent danger of physical harm to him or herself or another
The views of consultees
Conferring an advantage in the reasonable belief that to do so is legally required or permitted
The views of consultees in favour of the defence
The views of consultees against the defence
Conferring an advantage in the reasonable belief that to do so was legally permissible
Views of consultees
Conclusion Burden of proof Recommendation
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PART 8: BRIBERY COMMITTED OUTSIDE THE JURISDICTION
Introduction
137
137
x
The jurisdiction of English courts
Section 109, Anti-terrorism, Crime and Security Act 2001
The United Kingdom’s obligations under international conventions
Defects in the law
Preliminary issue
Foreign nationals who reside in the United Kingdom, Crown Dependencies or Overseas Territories
Proposal
Views of consultees
“Ordinarily resident”
Foreign nationals ordinarily resident in Crown Dependencies or Overseas Territories
Corporate bodies
Companies not incorporated under the law of any part of the United Kingdom nor under the law of a Crown Dependency or Overseas Territory
Bodies incorporated under the law of the Crown Dependencies and the Overseas Territories
Views of consultees
Unincorporated bodies
At what point in time must a person fall within the relevant category?
Recommendation
The proposals relating to secondary parties
Views of consultees
Conclusions The proposals relating to inchoate liability
Assisting and encouraging
Conspiracy and attempt The new offence of failing to prevent bribery
Paragraph Page
8.4                  138
8.6                  138
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PART 9: CONSENT TO PROSECUTION; OTHER MATTERS
Consent to prosecution
Recommendation Mode of trial
Recommendation Penalties Disqualifications in electoral law
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152
153
153
153
153
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PART 10: LIST OF RECOMMENDATIONS
The general offences
Two general offences of bribery
The offence committed by the payer
The offence committed by the recipient A discrete offence of bribing a foreign public official Defences
Liability of companies and limited liability partnerships Extra-territoriality Consent to prosecution; other matters
Consent to prosecution
Mode of trial
Penalties
APPENDIX A: BRIBERY BILL AND EXPLANATORY NOTES
APPENDIX B: LIST OF THOSE WHO COMMENTED ON CONSULTATION PAPER NO 185
APPENDIX C: THE WIDER CONTEXT OF CORRUPT PRACTICES
Paragraph
Page
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169
177
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APPENDIX D: SPECIAL CASES
190
xii
REFORMING BRIBERY: A SUMMARY OF OUR MAIN RECOMMENDATIONS
1     Bribery has been contrary to the law at least since Magna Carta declared, “We will sell to no man…either justice or right”. Most people have an intuitive sense of what “bribery” is. However, it has proved hard to define in law. The current law is both out-dated and in some instances unfit for purpose.
2     We propose repeal of the common law offence of bribery, the whole of the 1889, 1906 and 1916 Acts, and all or part of a number of other statutory provisions.
3     These offences will be replaced by two general offences of bribery, and with one specific offence of bribing a foreign public official. In addition, there will be a new corporate offence of negligently failing to prevent bribery by an employee or agent.
4     In the text below, the precise statutory terms and definitions have not always been used. The draft Bill must be consulted for these. Not all of our recommendations and draft clauses are discussed below.
THE GENERAL OFFENCES
5     The first of the general offences will be concerned with the conduct of the payer (P):
P will be guilty if, directly or indirectly, he offers, promises or gives an advantage to another, intending it to induce another person to do something improper (defined below), or to reward someone for behaving improperly (defined below).
EXAMPLE: P provides a friend (who works in the same company as X) Ł10,000 to give to X, to persuade X to send P confidential information about the company that P wants in connection with her own business.
6     The second of these offences will be concerned with the conduct of the recipient (R):
R will be guilty:
(a) if he requests or accepts an advantage, intending that he, or another, should in consequence behave improperly, defined below,
(b) if he requests or accepts an advantage and the request or acceptance itself constitutes improper behaviour, defined below,
(c)  if he asks for a reward for improper behaviour, defined below, or
(d)  if he behaves improperly, defined below, in anticipation or in consequence of requesting or accepting an advantage.
xiii
EXAMPLES:
(a) R asks P for Ł10,000 if he – R – or a colleague destroy supporting documents submitted by rival bidders for a contract P is seeking to secure with R’s employer.
(b) R, a civil servant, asks for Ł1,000 for himself to process a routine application.
(c)  R, a civil servant, asks for Ł1,000 from P as a reward, having processed P’s application for a licence especially quickly.
(d)  R, an agent, accepts P’s bid for a contract on behalf of a company, because R expects P secretly to reward him personally; or, R accepts an undocumented personal reward from P for accepting P’s bid for the contract.
7     These offences will be confined to activity of a business, professional or public nature. Distinctions between such activities will no longer be reflected in different offences, as such. Instead, the distinctions will be reflected in the different ways that P and R come respectively to commit their offences. In that regard, performance of a function or activity will be “improper” if it is carried out in breach of one or more of the following expectations (the “expectations” in question are those that a person of moral integrity would have):
(1)      An expectation that someone will perform a function or activity in good faith;
(2)      An expectation that someone will perform a function or activity impartially;
(3)      An expectation created by the fact that someone is in a position of trust. EXAMPLES:
(1) R, an employee, invites bids for a contract, but makes it clear to the wealthiest bidder privately that he or she will look favourably upon their bid if he (R) is rewarded personally.
(2)  R is a trustee who makes grants to a company’s needy former employees. R agrees to consider making grants to a needy former employee – X – who is also a member of his own family, when X says he has made R a beneficiary under X’s Will.
(3) In exchange for payment, R, a security guard, agrees to allow P on to company premises at night so that P - a director of a rival company - can go through confidential papers.
8     The general offences will apply to acts done outside the jurisdiction, if they would have amounted to an offence within the jurisdiction and the person accused is, amongst other possibilities, (a) a British citizen, (b) an individual ordinarily resident in the UK, (c) a body incorporated in the UK.
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9 In that regard, we suggest that the Government enters into negotiations with Overseas Territories and Crown Dependencies over the extension of the law to bodies incorporated and persons ordinarily resident in those Territories or Dependencies.
10     An individual director, manager, or equivalent person who consents to or connives at the commission of one of these offences him or herself commits the offence.
11     The Director of the relevant prosecution authority must consent to a prosecution for these offences.
12     The penalties upon conviction are the same as for fraud. For example, in the most serious cases involving individuals, there may be a sentence of up to ten years’ imprisonment following conviction on indictment.
BRIBERY OF A FOREIGN PUBLIC OFFICIAL
13     There will be a separate offence of bribing a foreign official (“FPO”). A definition of “Foreign Public Official” is provided. Paragraphs 8 to12 above will also apply to this offence.
14     The offence will be committed if P offers or gives any advantage not legitimately due to a FPO, or to another person with the FPO’s assent. P must offer or give the advantage, (a) intending to influence the FPO in his or her capacity as a FPO, and (b) intending to obtain or retain business:
EXAMPLE: P asks R, a civil servant in Blueland, to process quickly P’s application for a licence to engage in construction work in Blueland. R says that will only be possible if P provides X, a relative of R, with help in the conversion of flats on X’s land. P agrees to provide the help.
15     If the law applicable to F permits or requires F to accept an advantage, that advantage is “legitimately due”:
EXAMPLE: P asks R, a civil servant in Blueland, to process quickly P’s application for a licence to engage in construction work in Blueland. R says that will only be possible if P helps to build a new school in Blueland. P agrees to provide the help. The law applicable to R says that favourable treatment may be given to foreign businesses if they agree to fund genuinely charitable work in Blueland.
xv
16     It is a defence for P to show that he or she reasonably believed that the law permitted or required R to accept the advantage, bearing in mind steps P has taken to find out the true position:
EXAMPLE: The facts are as in the example above. The law applicable to R says that favourable treatment may be given to foreign businesses if they agree to fund genuinely charitable work in Blueland. P checks the register of charities in Blueland, and it includes the company in charge of building schools to which P is to pay the money. Unknown to P or R, the company’s charitable status expired a month before. The register had not been updated.
THE NEW CORPORATE OFFENCE
17     A company (“C”) registered in England and Wales is guilty of an offence, punishable by a fine, if:
(1)      someone (“A”) acting on C’s behalf commits bribery;
(2)      the bribe was in connection with C’s business; and
(3)      someone connected with C, whose functions included preventing bribery being committed by persons like A, negligently failed to prevent the bribery:
EXAMPLE: C decides to do business in Blueland. No one at C concerns themselves with whether bribes to secure business opportunities may be paid on C’s behalf. C employs an agent (A) living in Blueland to establish business contacts on C’s behalf with Government officials in Blueland. A bribes those officials to place contracts with C. The directors of C had given no guidance to A on their attitude towards bribery, even though it is well-known that officials in Blueland are open to bribery.
18     It is a defence for C to show that there were adequate procedures in place designed to prevent persons such as A committing bribery:
EXAMPLE: C wishes to do business in Blueland. C employs an agent (A) living in Blueland to establish business contacts on C’s behalf with Government officials in Blueland. A bribes those officials to place contracts with C. C can show that they gave their regional manager the task of ensuring that all foreign agents complied with the company’s anti-bribery policy. The regional manager had failed in her task, as she was busy looking for a job with a rival company.
19     However, this defence will not apply if the person or persons whose responsibility it was to prevent the bribery was a director, manager, or equivalent person within C.
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20     In spite of the inevitable complexity of some of recommended provisions, we believe that it will be perfectly possible to capture the essence of our three main recommended offences of bribery in plain language and in a short form. In this way, adequate guidance can be given to those who do not, unlike lawyers dealing with legal cases, need to know the full legal details.
21     In that regard, it will generally be sufficient guidance to those in a position to make payments to say:
Do not make payments to someone (or favour them in any other way) if you know that this will involve someone in misuse of their position.
22     In that regard, it will generally be sufficient guidance to those in a position in which they may receive payments to say:
Do not misuse your position in connection with payments (or other favours) for yourself or others.
23     It should in general be sufficient guidance to those dealing with foreign public officials to say:
Do not deliberately use advantages to try to influence foreign public officials for business reasons, without a legal justification.
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1    The World Bank has estimated that more that US$ 1 Trillion is paid in bribes annually. See World Bank, “The Costs of Corruption” (8 April 2004). An Ernst & Young survey of executives indicated that almost half of those involved in the mining industry said that bribery was prevalent, with 30% saying that it was prevalent in the banking and energy industries, especially in countries outside Europe. See
http://news.bbc.co.uk/1/hi/business/7399678.stm. In our consultation paper (see n 7 below), we referred to the World Bank’s discussion of the inefficiencies involved for management in having to negotiate and pay bribes, however small: Appx F to the consultation paper, para F.18. See para 6.52 below. On the broader social side, a culture of corruption may, amongst other things, create an environment in which officials see themselves as beholden to the highest payer, who may be a terrorist or criminal organisation: Trace International, quoted in http://www.ethicalcorp.com/content.asp?ContentID=4471.
2    See Parts 2 and 4 below.
3    See Part 2 below for a summary of the background to this project, paras 2.35 to 2.39.
4    Legislating the Criminal Code: Corruption (1997) Law Commission Consultation Paper No 145; Legislating the Criminal Code: Corruption (1998) Law Com No 248.
5    Joint Committee on the Draft Corruption Bill, Session 2002-2003, HL Paper 157, HC 705 (2003).
6    Our terms of reference are set out at para 2.39 below.
7    Reforming Bribery (2007) Law Commission Consultation Paper No 185.
1
OUTLINE OF THE SCHEME RECOMMENDED
(1)      Offering or giving a bribe to induce someone to, or to reward someone for, behaving improperly.8
(2)      Requesting or accepting a bribe either in exchange for acting improperly, or where the request or acceptance is itself improper.9
(3)      Bribing a foreign public official, where the intention is to influence that official in his or her capacity as a foreign public official, in the obtaining or retaining of business advantages.10
(4)      A negligent failure by a company or limited liability partnership to prevent bribes being given or offered on behalf of that organisation.11
We refer to (1) and (2) as the general offences. In addition, we recommend that:
(5)      Directors or equivalent officers of a body corporate who consent or connive at the commission of bribery (i.e. the offences in (1), (2) and (3)) by that body may be charged with the principal offence.12
(1) It will be a defence for someone charged with bribing a foreign public official to show that they reasonably believed that the advantage conferred was required or permitted by the law applicable to the official in
question14
and to the fourth of these offences as follows:
8    Part 3, and clause 2 of the draft Bill.
9    Part 3, and clause 1 of the draft Bill.
10   Part 5, and clause 4 of the draft Bill.
11   Part 6, and clause 7 of the draft Bill.
12   Part 6, and clause 8 of the Bill.
13   Part 9, and clause 9 of the draft Bill.
14   Part 7, and clause 5 of the draft Bill.
2
(2) It will be a defence for a company or limited liability partnership charged with negligently failing to prevent bribery being committed on its behalf to show that it had in place adequate procedures to prevent such offences
being committed.15
(1)      An offence is regarded as committed in England and Wales if any part of the conduct element takes place in England and Wales.16
(2)      If no part of the conduct element takes place in England and Wales, then there can still be liability, and proceedings can still be taken in England and Wales, if:
(a)       the acts done outside England and Wales would constitute an offence if done in England and Wales and
(b)       the person doing the acts was, amongst other categories of person:
(i) someone ‘ordinarily resident’ in England and Wales;
(ii) a British overseas territories citizen; or
(iii) a British citizen or body incorporated under the law of any part of the UK.17
STRUCTURE OF THIS REPORT
15   Part 6, and clause 7(6) of the draft Bill.
16   Clause 1(7) of the draft Bill.
17   See Part 8 and clause 6 of the draft Bill.
3
4
PART 2
THE CURRENT LAW, ITS DEFECTS AND
PREVIOUS ATTEMPTS AT REFORM
THE CURRENT LAW
Bribery at common law
Bribery is the receiving or offering [of] any undue reward by or to any person whatsoever, in a public office, in order to influence his behaviour in office, and incline him to act contrary to the known rules of honesty and integrity.3
The bribe: “any undue reward”
1    Reforming Bribery (2007) Law Commission Consultation Paper No 185.
2    For example, bribery of a privy councillor (Vaughan (1769) 4 Burr 2494; 98 ER 308) and bribery of a coroner (Harrison (1800) 1 East PC 382). See Archbold: Criminal Pleading, Evidence and Practice (2008) para 31–129.
3    Russell on Crime (12th ed 1964) p 381.
4    In the Bodmin Case (1869) 1 O’M & H 121 Willes J mentioned how he had been required to swear that he would not take any gift from a man who had a plea pending unless it was “meat or drink, and that of small value”.
5    D Lanham, Criminal Fraud (1987) p 204.
5
The difference between legitimate entertainment and bribery lies in the intention with which the entertainment is provided, and that is something to be inferred from all the circumstances, including the relationship between giver and recipient, their respective financial and social positions and the nature and value of the entertainment.6
A “public officer”
2.6     The Court of Appeal in Whitaker7 rejected the argument that the common law offence applied only to judicial and ministerial officers and that the defendant army officer belonged to neither category. A public officer was defined as
an officer who discharges any duty in the discharge of which the public are interested, more clearly so if he is paid out of a fund provided by the public.8
The mental element
The 1889 Act
2.9     Section 1 of the 1889 Act provides:
(1) Every person who shall by himself or by or in conjunction with any other person, corruptly solicit or receive, or agree to receive, for himself, or for any other person, any gift, loan, fee, reward, or advantage whatever as an inducement to, or reward for, or otherwise on account of any member, officer, or servant of a public body as in this Act defined, doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which the said public body is concerned, shall be guilty of an offence.
6    1978 (3) SA 302, 311, by Nicholas J.
8    Above, 1296, by Lawrence J.
9    Pitt and Mead (1762) 3 Burr 1335, 97 ER 861.
10   Worrall (1890) 16 Cox CC 737.
11   Owen [1976] 1 WLR 840. See Appendix C, paras C.12 to C.13.
12   (1867) 10 Cox CC 550.
6
(2) Every person who shall by himself or by or in conjunction with any other person corruptly give, promise, or offer any gift, loan, fee, reward, or advantage whatsoever to any person, whether for the benefit of that person or of another person, as an inducement to or reward for or otherwise on account of any member, officer, or servant of any public body as in this Act defined, doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which such public body as aforesaid is concerned, shall be guilty of an offence.
The bribe: “gift, loan, fee, reward, or advantage”
2.10     The terms “gift”, “loan”, “fee” and “reward” are not defined. “Advantage” includes
any office or dignity, and any forbearance to demand any money or money’s worth or valuable thing, and includes any aid, vote, consent, or influence, or pretended aid, vote, consent, or influence, and also includes any promise or procurement of or agreement or endeavour to procure, or the holding out of any expectation of any gift, loan, fee, reward, or advantage, as before defined.13
A “public body”
any council of a county or county of a city or town, any council of a municipal borough, also any board, commissioners, select vestry, or other body which has power to act under and for the purposes of any Act relating to local government, or the public health, or to poor law or otherwise to administer money raised by rates in pursuance of any public general Act, and [this] includes any body which exists in a country or territory outside the United Kingdom and is equivalent to any body described above.
The 1906 Act
13   The 1889 Act, s 7.
15   Local Government and Housing Act 1989, Sch 11, para 3.
7
If any agent corruptly accepts or obtains, or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gift or consideration as an inducement or reward for doing or forbearing to do, or for having after the passing of this Act done or forborne to do, any act in relation to his principal’s affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal’s affairs or business; or
If any person corruptly gives or agrees to give or offers any gift or consideration to any agent as an inducement or reward for doing or forbearing to do, or for having after the passing of this Act done or forborne to do, any act in relation to his principal’s affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal’s affairs or business
… he shall be guilty [of an offence].
The bribe: “any gift or consideration”
An “agent”
2.17     It is unclear whether police officers, judicial officers and local councillors can be classified as “agents” for the purposes of the 1906 Act,20 though in such cases there may be recourse to the common law or the 1889 Act. It is also doubtful whether a person merely purporting to be an agent will suffice for the 1906 Act.21
16   Prevention of Crime Act 1906 Act, s 1(2).
17   Above.
18   Above, s 1(3), as amended by the 1916 Act, ss 4(2) and 4(3).
19   In Barrett [1976] 1 WLR 946, a superintendent registrar of births, deaths and marriages was serving under the Crown despite not being appointed, paid or liable to dismissal by it.
20   In the English civil case of Fisher v Oldham Corporation [1930] 2 KB 364, a police officer was held to be a servant of the State; but in the Scottish case of Graham v Hart [1908] SC (J) 26, a police officer was held to be an agent of the Chief Constable.
21   ATH Smith, Property Offences (1994) pp 792 to 793, para 25–04.
8
The 1916 Act
Where in any proceedings against a person for an offence under the Prevention of Corruption Act 1906, or the Public Bodies Corrupt Practices Act 1889, it is proved that any money, gift, or other consideration has been paid or given to or received by a person in the employment of [Her] Majesty or any Government Department or a public body by or from a person, or agent of a person, holding or seeking to obtain a contract from [Her] Majesty or any Government Department or public body, the money, gift, or consideration shall be deemed to have been paid or given and received corruptly as such inducement or reward as is mentioned in such Act unless the contrary is proved.
Extra-territorial jurisdiction
in another country.29
22   See paras 2.12 and 2.13 above.
23   From 2 years’ hard labour to 7 years in cases to which the 1916 Act applied. The disparity in sentencing between the 1889 and 1906 Acts was removed by s 47 of the Criminal Justice Act 1988.
24   Carr-Briant [1943] KB 607.
25   It does not apply therefore to agents who are not so classified, such as employees of private companies engaged in contracted-out work or private sector secondees to Government departments.
26   Asseling, The Times 10 September 1916. Low J considered it impossible to prosecute a civil servant found in possession of banknotes traced to a contractor with whom he had had official dealings, because the prosecution was unable to prove why the money was paid. This case helps to explain the restricted application of the presumption of corruption.
27   Anti-terrorism, Crime and Security Act 2001, s 109.
28   1889 Act, s 7.
29   Anti-terrorism, Crime and Security Act 2001, s 108.
9
The presumption of corruption does not apply to anything that would not have been an offence prior to Part 12 coming into force.30
PROBLEMS WITH THE CURRENT LAW
2.23     The central difficulties with the current law are highlighted below.
Fragmentation
[there is] a lack of clarity among the different legislative and regulatory instruments in place …
…The current substantive law governing bribery in the UK is characterised by complexity and uncertainty.31
Imperfect distinction between public and private sector bribery
Act.33
Inconsistencies and uncertainties in terminology and scope
30   Above, s 110.
31   OECD, United Kingdom: Phase 2, report on the application of the convention on combating bribery of foreign public officials in international business transactions (March 2005), paras 15 and 194.
32   For example, Natji [2002] EWCA Crim 271, [2002] 1 WLR 2337, in which the conviction of the defendant employee of the Immigration and Nationality Department of the Home Office under the 1889 Act was quashed because, although the defendant was working in the public sector, that Act did not encompass bribery of those employed by the Crown.
33   A risk borne out by the similar difficulties of interpreting “public authority” in section 6 of the Human Rights Act 1998.
34   See para 2.33 below.
35   See para 2.19 above.
10
The bribe
Those capable of being bribed
Connections between the bribe and the conduct influenced
The meaning of “corruptly”
36   See para 2.9 above.
37   (1858) 6 HL Cas 746; 10 ER 1488.
38   [1957] Criminal Law Review 321.
39   [1967] Criminal Law Review 236.
40   [1960] 2 QB 423.
41   Wellburn (1979) 69 Cr App R 254; Harvey [1999] Criminal Law Review 70; Godden-Wood [2001] EWCA Crim 1586, [2001] Criminal Law Review 810.
11
Lacuna where bribery is committed outside England and Wales
THE BACKGROUND TO THE PROJECT
Our previous report on corruption
(1)      corruption should be codified within a single Bill;
(2)      the single Bill should remove the public/private distinction and abolish the presumption of corruption;
(3)      it should be an offence to act corruptly in the “hope” or “expectation” of a bribe, even when no such bribe had been agreed;
(4)      bribery should be split into five offences: two for persons corruptly conferring or offering to confer an advantage; two for persons corruptly obtaining or soliciting/agreeing to obtain an advantage; and one for those who performed their functions as agents corruptly;
(5)      the Bill should list relevant agent/principal relationships;
(6)      acting corruptly should be defined as acting “primarily in return for the conferring of an advantage”. This would be subject to a number of defences including acting in return for remuneration from the principal, or with the principal’s consent;
(7)      there should be no extension of police powers (due regard being given to human rights issues and the need for consistency with other offences);
(8)      the offence should be added to the list of Group A offences in Part 1 of the Criminal Justice Act 1993, which would extend the domestic courts’ jurisdiction to certain acts of bribery committed outside the UK; and
43   Legislating the Criminal Code: Corruption (1997) Consultation Paper No 145.
44   Legislating the Criminal Code: Corruption (1998) Law Com No 248.
12
(9) procurement of a breach of duty through threats or deception should not be included in the law of corruption.
The Government’s response to the previous report45
The Joint Committee on the draft Corruption Bill47
(1)      that some corrupt conduct was not caught (such as when heads of firms bribe each other or when an agent unreasonably believes that his or her principal has consented to the bribe);
(2)      that the general law of corruption was not defined with sufficiently clarity;
(3)      that the definition of corruption was too vague for business and could be interpreted in a manner that was inconsistent with the UK’s international obligations;
(4)      that the agent/principal focus was too restrictive; and
(5)      that the waiver of Parliamentary privilege in corruption cases should be narrowed.
The Committee concluded that the agent/principal focus, which formed the heart of the draft Bill, should be reassessed.
The Government’s response to the Joint Committee48
45   Raising Standards and Upholding Integrity: the Prevention of Corruption (2000) Cm 4759.
46   For example, the Government felt that the consent of a Law Officer should be required for every corruption prosecution; that trading in influence should be included; that jurisdiction should be extended to catch corruption committed abroad by UK nationals; and that the reform should extend corruption to cover MPs.
47   Joint Committee on the Draft Corruption Bill, Session 2002-2003, HL Paper 157, HC 705 (2003).
48   The Government Reply to the Report from the Joint Committee on the Draft Corruption Bill, Session 2002-2003, HL Paper 157, HC 705 (2003) Cm 6086.
49   For example, the cartel offence in the Enterprise Act 2002.
50   The “primary motivator “ test is whether the advantage is the primary reason for R doing an improper act.
13
The most recent Government consultation and our second referral
2.39 Despite the Government’s intention to take forward the draft Corruption Bill, its momentum was effectively undermined by the criticisms of the Joint Committee. In an effort to find a way forward, the Home Office published a consultation paper in December 2005. The response to that consultation was published in March 2007. At the same time, the Government announced that it had asked the Law Commission to re-examine the law of bribery – a shift of focus reflected in our terms of reference:
(1)      To review the various elements of the law on bribery with a view to modernisation, consolidation and reform; and to produce a draft Bill. The review will consider the full range of structural options including a single general offence covering both public and private sectors, separate offences for the public and private sectors, and an offence dealing separately with bribery of foreign public officials. The review will make recommendations that:
(a)       provide coherent and clear offences which protect individuals and society and provide clarity for investigators and prosecutors;
(b)       enable those convicted to be appropriately punished;
(c)       are fair and non-discriminatory in accordance with the European Convention on Human Rights and the Human Rights Act 1998; and
(d)       continue to ensure consistency with the UK’s international obligations.
(2)      The process used will be open, inclusive and evidence-based and will involve:
(a)       a review structure that will look to include key stakeholders;
(b)       consultation with the public, criminal justice practitioners, academics, parliamentarians, and non-governmental organisations;
(c)       consideration of the previous attempts at reform (including the recent Home Office consultation) and the experiences of law enforcement and prosecutors in using the current law; and
(d)       comparing, in so far as is possible, the experience in England and Wales with that in other countries: this will include making international comparisons, in particular looking at relevant international Conventions and the body of experience around their implementation.
(3)      The review will also look at the wider context of corrupt practices to see how the various provisions complement the law of bribery. This will provide the wider context in which the specific reform of bribery law can be considered. This part of the review will comprise a summary of provisions, not recommendations for reform.
14
PART 3
THE ELEMENTS OF THE GENERAL OFFENCES
OUR RECOMMENDATIONS IN BRIEF
The threshold condition
kinds.4
P’s offence
The basic element
1  Clause 2.
2  Clause 1.
3  Clause 3(1).
4  Clause 3(8).
5  Clause 2(2)(a); Clause 2(3)(a).
15
The wrongfulness element: seeking a favour from R
The wrongfulness element: compromising R
R’s offence
The basic element
The wrongfulness element: when R provides a favour
(a)       a reward for improper conduct,11 or
(b)       requested, agreed to or accepted with the intention that improper conduct be engaged in,12 or
(c)       the improper conduct must be engaged in, in anticipation or in consequence of, a request or agreement to receive or an acceptance of that advantage.13
As we have already indicated,14 “improper” conduct means conduct either contrary to an expectation that R would act in good faith or impartially, or conduct involving a betrayal of a position of trust.15
6    Clause 2(2)(b).
7    Clause 3(3) to 3(7).
8    Clause 2(3)(b).
9    Clause 1(2); clause 1(3)(a); clause 1(4). Alternatively, R’s improper conduct must be done in anticipation of or in consequence of such a request, agreement or acceptance: clause1(5).
10   Clause 1(6).
11   Clause 1(4).
12   Clause 1(2).
13   Clause 1(5). There will be some overlapping between these ways in which the wrongfulness element comes to be committed. We do not regard that as a weakness in the scheme.
16
The wrongfulness element: when R compromises him or herself
3.9 Alternatively, in relation to R’s offence, the request or agreement to receive or acceptance of the advantage must in itself breach an expectation of the relevant kind, or involve a betrayal of a position of trust.16 In such cases (usually where R occupies a position of trust) there is no need for a breach or betrayal of the relevant kind separate from the request for, agreement to receive, or acceptance of the advantage.
The “expectation” of propriety
circumstances.17
THE THRESHOLD CONDITION: BRIBERY’S LIMITS AS A FORM OF CRIMINAL WRONGDOING
Avoiding the enforcement of morality in inappropriate contexts
Example 3A
H and W, who have a young daughter, have separated acrimoniously. W offers to pay H not to seek access to, or contact with, their daughter. H accepts W’s offer, and agrees not to seek access or contact.
14   Para 3.5 above.
15   Clause 3(3) to 3(7).
16   Clause 1(3)(b).
17   This point will not be set out explicitly in the new law. Its precise formulation will be for judges directing juries, or for magistrates.
17
The functions and activities to which the general offences of bribery will apply
The definition of “functions of a public nature”
18   Para 3.100 below.
19   See para 3.3 above.
20   Clause 3(1).
21   Russell on Crime (12th ed, 1964), at p 381.
18
The definition of trade, profession, employment or business
The expression “business” includes a trade, profession or employment and includes any activity carried on by a body of persons, whether corporate or unincorporate.
22   Some discussion of the issue can be found in Administrative Redress: Public Bodies and the Citizen (2008), Law Commission Consultation Paper No 187, at p 79 to 80.
23   Clause 3(1)(a).
24   Clauses 3(1)(b) and 3(1)(c).
25   Town Investments Ltd v Department of the Environment [1978] AC 359, at p 383.
26   Hill (Patents) Ltd v University College Hospital Board of Governors [1956] 1 QB 90.
27   Theft Act 1968, s 12.
19
Companies and unincorporated associations
Past or present functions, trade, employment or business etc activities
Example 3B
R has recently retired from an influential position in the civil service. He or she is approached by P who is seeking a lucrative contract with a Government department. P pays R a large sum of money to provide confidential information to P about the bidding processes.
the offence.30
Recommendation
TWO GENERAL OFFENCES OF BRIBERY
28   Clause 3(1)(d).
29   Theft Act 1968, s 19.
30   Clause 3(8).
31   CP, paras 1.8 to 1.17.
20
Recommendation
THE OFFENCE COMMITTED BY THE PAYER
The basic element of P’s offence
The definition of “advantage”
32   Discounting the anomalous case of “procuring” where D acts through P when P is an innocent agent.
33   Clause 2(2)(a); clause 2(3)(a).
21
The expression “advantage” includes any office or dignity, and any forbearance to demand any money or money’s worth or valuable thing, and includes any aid, vote, consent, or influence, or pretended aid, vote, consent, or influence, and also includes any promise or procurement of or agreement or endeavour to procure, or the holding out of any expectation of any gift, loan, fee, reward, or advantage, as before defined.
(1)  A person should be regarded as conferring an advantage if:
(a)       he or she does something (or omits to do something which he or she has the right to do), and
(b)       the act or omission is done or made in consequence of another’s request (express or implied) or with the result (direct or indirect) that another benefits; and
(2)  A person should be regarded as obtaining an advantage if:
(a)       another does something (or omits to do something which he or she has the right to do), and
(b)       the act or omission is done or made in consequence of the first person’s request (express or implied) or with the result (direct or indirect) that the first person benefits.
34 CP para 5.60.
22
The offer or promise of an advantage
35   Clause 2(2)(b).
36   CP paras 5.103 to 5.107.
23
Should the advantage conferred have to be “undue”?
Rewarding improper conduct
Example 3C
P is well known as a provider of large “bonuses” to officials who give P’s work priority. Hoping to secure such a bonus, R moves P’s planning application to the top of the list for consideration. When he subsequently discovers this, P sends R a Ł1000 “bonus”.
Recommendation
37   CP para 5.64.
38   For discussion of such a model, see the CP, paras 4.48 to 4.64.
39   Clause 2(2)(b).
40   Clause 1(5).
41   Clause 2(2)(b).
24
The wrongfulness element in P’s offence: seeking a favour from R
The proposals in the CP
act.42
Example 3D
Company P, the clear front-runner on all counts to win a contract with company Y, offers R (an employee of company Y) an advantage if R will place the contract their way. R accepts the advantage to place the contract with company P, but is mainly motivated by the fact that company P is clearly the right choice in any event.
proposal.43
The difficulty is that most commercial enterprises are constantly trying to bring in business in a variety of ways all of which involve “influencing” those agents or other firms whose job it is to decide where their firms’ business should go.45
42   CP para 12.26.
43   In this example, R would not have been guilty of bribery under our provisional proposals. This is because the advantage was not R’s primary reason for placing the contract with P.
44   As indicated in the CP, para 6.18.
45   Legislating the Criminal Code: Corruption (1998) Law Com No 248, para 5.74.
25
The element of wrongfulness in P’s conduct when P seeks a favour from R: consultees’ responses
It is clear that the use of the word “primary” is among the most important elements in the Law Commission’s innovative proposals, and we consider that this is key to the effectiveness of the legislation that the Law Commission envisages. The use of other criteria, such as “substantial” or “material”, which the Law Commission also considers but in our view rightly rejects, would seriously weaken the legislation.
We oppose this proposal. Cases involving “mixed motives” raise particular factual difficulties: in particular, how is the jury to decide which of a number of motives was pre-eminent? If the jury were in doubt as to whether an established and “real” reason was the “primary” one, the defendant would be entitled to an unmeritorious acquittal… Whilst we accept that it is necessary to ensure that the offence net is not cast excessively wide, we nonetheless consider that sensible decisions on charging and an appropriate approach to sentencing will remedy any possible unfairness to the accused.
3.62     Transparency International commented as follows:
26
To require that the advantage should be “the primary reason” for an improper act is too restrictive, complicating and burdensome on the prosecution. It requires little imagination on the part of a well advised defendant and his counsel to define a number of reasons why the defendant did whatever constituted the “improper act”. The greater the number of reasons, the more difficult it will be to be confident of finding that the advantage was the primary reason. The requirement gives rise to illogical and even discriminatory results. If R is wealthy it will be more difficult to show that a sum of money or other advantage could be the primary reason.
46 Legislating the Criminal Code: Corruption (1998) Law Com No 248, para 5.74.
27
Our revised approach to the wrongfulness element in P’s conduct when P seeks a favour from R
3.69     Here is an illustration of how the recommendation is to work:
Example 3E
P invites officials from the Ministry of Commerce in Blueland to an evening of hospitality at P’s company’s expense. P’s intention is that the officials should be impressed by the business opportunities that the company has to offer, and accordingly offer P the chance to do business in Blueland. P realises that some of the officials may be so impressed by the hospitality that they would recommend that P be offered the chance to do business in Blueland irrespective of the real merits of the company. However, it is not P’s intention that this should be the reason that the officials give him or her that chance (although, obviously, P may not especially mind why the officials do give it to him or her).
47   Clause 2(2)(b); clause 2(3)(b).
48   It might be a different matter if P was aware that the officials were not allowed to accept hospitality in any form: see paras 3.73 to 3.76.
49   See para 3.66.
28
MUST THE PERSON P APPROACHES BE THE ONE TO RECEIVE THE ADVANTAGE?
Recommendation (Case E in the draft Bill)50
The wrongfulness element in P’s conduct: compromising R
Example 3F
R, a Government official, has issued a visa to P. Very grateful to have received the visa, P sends R Ł1000.
50 Clause 2(2).
29
Recommendation (Case F in the draft Bill)51
THE OFFENCE COMMITTED BY THE RECIPIENT
The basic element of R’s offence
51   Clause 2(3).
52   Clauses 1(2); 1(3)(a); 1(4).
53   Clause 1(4).
54   Paras 3.34 to 3.51. It follows, for example, that the request for or agreement to receive the advantage can be implied as well as express.
55   See Example 3C in para 3.48 above.
30
Example 3G
R is a civil servant in the Ministry of Defence. R improperly releases documents to the media that reveal a damaging inconsistency between the viewpoints of two ministers on defence policy. Individuals hostile to the Government send R money as a mark of their approval for his or her actions.
Recommendation
The wrongfulness element of R’s offence
The proposals in the CP
(1)      There had to be the breach of a legal or equitable duty, including a duty of impartiality.
(2)      It had to involve betrayal of a position or relation of trust, or breach of a duty of impartiality or of acting in the best interests of another.
56   Naturally, we recognise that on such facts, if he or she faces a criminal charge at all, the civil servant is much more likely to be charged with misconduct in a public office rather than with bribery. That does not mean it is wrong that, at its outer limits, the offence of bribery covers such conduct.
57   CP para 5.50.
31
Should we retain the “legal or equitable duty” restriction?
To the extent that the Commission’s proposals rely upon these duties [to act impartially etc] being in individual contracts, they would provide a criminal law with an opt-out. That would not be satisfactory. It would be a defence of consent, which the Commission eschews … It seems that here the Commission’s commendable desire for greater certainty in the law creates greater possibilities for avoidance. Unless a solution can be found to this problem the Commission’s proposed formulation in this regard should be rejected.60
58   Something that, in the closely related field of fraud and deception, the law has been keen to minimise.
59   Paras 3.92 to 3.98.
60   See now, Peter Alldridge, ‘Reforming Bribery: Law Commission Consultation Paper 185 (1) Bribery Reform and the Law Commission – Again’ [2008] Criminal Law Review 671, 683.
32
3.93     The higher court judges said:
We take issue with the suggestion at 5.53 that “the presence of one of these duties will normally be a question of law for the judge, even though the question of whether such a duty existed may involve the judge in the determination of some questions of fact.” The judge’s role should extend no further than determining whether the facts are capable of establishing the duty; thereafter, it will be for the jury to determine, as one of the issues in the case, whether or not the relevant duty in fact existed on the facts. (emphasis in original)
3.94     The Council of HM Circuit Judges said:
Once what should be a simple concept becomes, as a result of definition, partly a question of law for the Judge and partly a question of fact for the jury the situation is complicated still further – if the Judge decides the elephant is capable of being grey the jury then decides whether it is.
below).63
61   CP para 5.101.
62   CP para 4.43.
63   Para 3.100 onwards.
33
Example 3H
A retired school teacher is asked by a prospective employer of two of his or her former pupils to assess their relative merits. The teacher has in fact been paid a large sum by one of the pupils to rate him more highly than the other former pupil.
Consultees’ alternative definitions of a “corrupt breach of duty”
SHOULD THE “IMPROPER ACT” (BREACH OF DUTY) IN BRIBERY BE LEFT UNDEFINED?
64   See the discussion of the “good faith” expectation at para 3.141 below.
65   Para 3.170 onwards.
34
There have been too many instances of over complication in recent legislation and the addition of a definition which might be compared to seeking to describe an elephant when everyone knows what an elephant looks like is a classic example of over complication. Further once what should be a simple concept becomes, as a result of definition, partly a question of law for the Judge and partly a question of fact for the jury the situation is complicated still further…
66   CP paras 5.29 to 5.46.
67   CPS Nottinghamshire v Rose [2008] EWCA Crim 239, [2008] 3 All ER 315; R (Wilkinson) v DPP [2006] EWHC 3012 (Admin).
35
Example 3J
A referee is paid to write a reference that is unduly partial towards the person on whose behalf it is given.
Example 3K
An agent accepts a bid from a contractor, ahead of other worthy bids, because he or she has been given a secret payment by the contractor.
68 See the discussion below, in para 3.141 and following.
36
SHOULD THE IMPROPER NATURE OF AN ACT BE LINKED TO WHETHER IT WAS DONE “DISHONESTLY”?
In the context of facilitation payments jurors could be provided with the assistance of expert evidence as to the typical nature of payments made or “courtesies” offered in different business cultures overseas.
69   Below, para 3.136 and following.
70   See the discussion in the CP para 2.22.
37
Conclusion on the basic definition of the breach of duty
71 See Part 5 below.
38
Escaping the confines of “legal or equitable duty”: bribery and fraud
THE ANALOGY BETWEEN BRIBERY AND FRAUD
3.123     Parliament has taken the view that section 4 satisfies the need to strike the right balance between the requirements of justice and of certainty when defining the conduct element of a fraud offence. In the closely allied field of bribery, we believe that our understanding of improper conduct in the context of the giving and receipt of advantages must strike a similar kind of balance. In seeking to do this, we believe that it would be best to avoid reliance on civil law concepts, and (as under section 4 of the Fraud Act 2006) leave more to the common sense of the jury.
3.124     Such a revision of approach is important, not least because there will inevitably be some overlap between fraud offences and the revised general offence of bribery. The offence created by section 4 provides an example of this. It provides that D is guilty of fraud if he or she:
(a) occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person,
72   Paras 3.88 to 3.98 above.
73   CP paras 4.14 to 4.43.
39
(b) dishonestly abuses that position, and
(c) intends, by means of abuse of that position –
(i) to make a gain for himself or another, or
(ii) to cause loss to another or to expose another to the risk of loss.
(2) A person may be regarded as having abused his position even though his or her conduct consisted of an omission rather than an act.
There is no further definition in the Act of any of the terms used above.
THE OVERLAP BETWEEN BRIBERY AND FRAUD
3.127     These long-standing overlaps have not caused significant problems, nor been the subject of judicial or other criticism. This is despite the fact that there is currently a significant “perverse incentive” to charge fraud instead of bribery in the most serious cases, because the maximum penalty (10 years’ imprisonment) is higher than it is for bribery (7 years’ imprisonment). In that regard, it is important to note that this perverse incentive will be removed if our recommendations are enacted, because we are recommending the same maximum sentence (10 years’ imprisonment) for both fraud and bribery.77
75   See the CP, Appendix E.
76   See the CP, paras E.14 and following.
77   See Recommendation in Part 9 below.
40
The wrongfulness element in R’s conduct: general considerations
78   Or the dishonest imposition of loss, or exposure to the risk of loss.
79   Of course, it would be possible to charge both bribery and fraud on the same indictment.
80   CP para 4.113.
41
3.135     We will now show how we see each of these concepts operating in context.
Expectations relating to good faith, to impartiality and to a position of trust
81   This point is discussed in paras 3.170 to 3.179 below.
82   Beyond knowing that it must be in connection with trade or business activity or the performance of a public function: see para 3.3 above.
83   See the Fraud Act 2006, ss 1 to 4.
84   See the discussion in the CP, paras 4.136 and 5.36.
85   See para 3.108 above.
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ACTING IN GOOD FAITH
Example 3L
R is P’s former tutor, but has now retired from his post. P was not a good student, but needs a glowing reference from R if she is to have any chance of securing a lucrative job. P promises R a large sum of money if R will write such a reference for P. R agrees.
86   Para 3.96 above.
87   Clause 3(3).
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Example 3M
The CEO of a major company is asked to assess the merits of taking over a smaller company. Her counterpart at the smaller company is keen that the takeover should go ahead. So, the latter offers the CEO of the larger company a substantial payment if she will recommend to her shareholders that the takeover goes ahead. The CEO accepts the offer.
Example 3N
An agent invites bids from contractors on behalf of a principal. The principal has told the agent that, if a large enough sum of money is offered “under the table” by one of the contractors to secure the contract, it may be awarded to that contractor. The agent agrees to split the sum in question with the principal.
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Example 3O
P knows that R is likely to favour P’s bid for a contract, over the bids of competitors. P sends R Ł10,000 to “make sure” that R favours P’s bid, even though P knows that R is meant to evaluate the bids in good faith. R knows he is sure to accept P’s bid in any event. R banks the Ł10,000 without authority from his employer.
circumstances.91
88   See para 3.145 above.
89   CP paras 4.77 to 4.83.
90   Clause 1(3).
91   Of course, P may confer the advantage after the licence has been granted, as a “reward”. This situation was dealt with at paras 3.48 to 3.50 above.
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REMAINING IMPARTIAL
A POSITION OF TRUST
were examples:96
92   So, clause 3(4) speaks in general terms of an expectation that someone will behave impartially when performing a function or activity.
93   Clause 3(5).
94   See para 3.88 onwards, above.
95   See CP paras 5.29 to 5.49.
96   CP para 5.32 to 5.45.
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Example 3P
P offers to pay R, a security guard, a higher salary if R will leave his or her existing job at the end of the shift to come to work for P.
3.160     Contrast this example with the following example, also discussed in the CP:97
Example 3Q
A security guard is paid to look the other way while someone from a rival company sifts through confidential information about the guard’s employer.
97   CP para 5.41.
98   Para 3.158.
99   Para 3.193 below and following.
100  See para 3.194.
101  Which of these clauses is in issue depends on whether R has performed, or merely intends to perform, his or her function improperly.
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102  Clause 3(7)(b).
103  Joseph Raz, Practical Reason and Norms (1990), 11 to 12.
104  It is important to note that in both of these examples, if the payment played no part at all in motivating R’s conduct, R may still be guilty of bribery. R will be guilty in accepting the payment, if accepting it would in itself constitute breach of a position of trust: clause1(3). This is a conceptually separate basis on which R may be guilty of bribery, even if in practice it is likely to overlap with the situation described in the text.
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Leaving the matter to the jury
Analogous approaches in other areas of the criminal law
105  Para 3.212 onwards.
106  CP, para 5.26.
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How the jury is to approach the issue
108  Wacker [2002] EWCA Crim 1944, [2003] QB 1207. Very broadly speaking, the doctrine of “ex turpi causa” prevents liability arising where the claim arises out of illegal activity in which someone was engaged.
109  Para 3.10.
110  See paras 3.114 to 3.117 above.
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ILLUSTRATIVE DIFFICULT CASES
3.180     Here is an explanation of how the jury might approach two difficult cases:
Example 3R
R is employed by a normally reputable newspaper as a financial commentator. The newspaper’s proprietor makes it clear to R that she does not mind if R supplements his low salary by taking payments from companies to promote their financial products. R receives a large payment from company P to promote their life insurance product. R writes an article comparing other life insurance products unfavourably with P’s, but adding in conclusion that, “of course anyone reading this would be crazy to trust my judgment!”
3.183     Here is another example:
Example 3S
Company C tells an employee, R, to do “whatever it takes” to secure a reliable supply of widgets for C from Blueland. To that end, R attends a trade fair in Blueland. At the trade fair, P is representing company D. D’s widgets are advertised by P in the normal way, but P also says to each person expressing an interest – including R – that D is “very flexible indeed” in terms of what they will do to secure business. R is told by P that D prefers to “make it personally worth their while” for contractors to agree to purchase widgets from D. R agrees on behalf of C to purchase widgets from D.
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Conclusion on the nature of “improper” conduct
111 If it can be proved that R improperly agreed to accept a payment from P, it will not be necessary to go on to show that such a payment was in fact made: clause1.
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R’s awareness of the wrongful nature of his or her conduct
The link between the giving of the advantage and the impropriety
Paths to the commission of bribery by R
(a)       Either the advantage (or the prospect thereof) must be a reward for improper conduct,112 or
(b)       the advantage (or the prospect thereof) must be requested, agreed to or accepted with the intention that improper conduct
will be performed,113 or
(c)       the improper conduct must be engaged in, in consequence of or in anticipation of, a request, agreement to or acceptance of the
advantage.114
112  Clause 1(4).
113  Clause 1(2).
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improperly performed.119
activity.121
114  Clause 1(5).
115  Clause 1(3).
116  Clauses 3(3) to 3(7). We have thought it right to indicate by express provision that the improper “performance” of a function or activity can come about through a failure to perform the function or activity, as well as through a positive act of impropriety (clause 3(6)(b)). The use of the unusual term “performance”, rather than “act”, to describe the relevant aspect of R’s conduct element is what led us to believe that this would be appropriate.
117  Clause 3(7).
118  Clause 1(2) to clause 1(5).
119  Clause 1(2).
120  Clause 1(3).
121  Clause 1(4).
122  Clause 1(5).
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Example 3T
R is a senior civil servant who has been working to secure a trade agreement between Britain and a foreign government. Her efforts ensure that agreement is reached. Some time later, the foreign Government sends R Ł10,000 as a “thank you” for all her efforts. R banks the cheque.
Example 3U
R is the manager of a charitable trust with a number of organisations who are beneficiaries. R has been a very successful manager but believes that he or she is underpaid for the work he has done for the trust. As R’s income for acting as a manager cannot easily be increased using the proper procedures, R asks the head of each of the beneficiary organisations for a contribution from their funds to increase his income.
threshold condition.125
123  This point was forcefully made to us by Professor Alldridge. See now Peter Alldridge, “Reforming Bribery: Law Commission Consultation Paper 185 (1) Bribery Reform and the Law Commission – Again” [2008] Criminal Law Review 671, 677 to 679.
124  Para 3.202 above.
125  See para 3.3 above.
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First, clause 1(5) of the draft Bill is satisfied if R accepts an advantage and in consequence engages in the improper performance of a relevant function or activity.
Next, clause 3(3) or 3(4) will be satisfied if the activity in question is one R was expected to perform respectively in good faith or impartially, and
Clause 3(6)(a) also needs to be satisfied. It will be satisfied if R did not live up to expectations (or promised or agreed not to), so far as one of the expectations in 3(3) or 3(4) is concerned (clause 3(7)(a)). These are the expectations that the function or activity is performed in good faith or impartially referred to above.
First, clause 1(3) is satisfied if R requests, agrees to receive or accepts an advantage, and the request, agreement to receive, or acceptance itself constitutes the improper performance of a function or activity mentioned in clause 3.
Clause 3(5) is satisfied if R, in performing a relevant function or activity, is in a position of trust by virtue of performing it.
Clause 3(6)(a), must also be satisfied. It is satisfied if what was done breached an expectation arising from R’s position of trust. Such an expectation may concern (clause 3(7)(b)) the manner in which, or the reasons for which, the relevant function or activity will be performed (3(7)(b)).
126  Clause 1(5).
127  Clause 1(3).
128  Para 3.202 above.
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ARE “PUBLIC SERVANTS” IN A SPECIAL POSITION, JUSTIFYING A DISCRETE OFFENCE?
129  Para 3.202 above.
130  Para 3.202.
131  Case D, para 3.205 above.
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132 See the analysis at paras 3.193 to 3.211.
133  Paras 3.18 to 3.20.
134  See para 3.19 above.
135  For discussion of this offence, see Archbold (2008 ed), para 25-381.
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Recommendations
3.223     The impropriety in the performance of the function or activity must be
shown to have turned on an expectation that R will act in good faith, or impartially.141
3.225     It must be shown that there was a breach of an expectation that R will act in
good faith or impartially, or in accordance with his or her position of trust.143
136  Assuming that it was not a reason with full justificatory or excusatory effect.
137  Clause 1(2).
138  Clause 1(3).
139  Clause 1(4).
140  Clause 1(5).
141  Clause 3(3) and 3(4).
142  Clause 3(5).
143  Clause 3(6); clause 3(7).
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PART 4
BRIBERY OF A FOREIGN PUBLIC OFFICIAL – THE BACKGROUND TO AND DEFICIENCIES OF THE CURRENT LAW
THE UK’S OBLIGATIONS UNDER THE OECD CONVENTION
1.   Each Party shall take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business.
2.   Each Party shall take any measures necessary to establish that complicity in, including incitement, aiding and abetting, or authorisation of an act of bribery of a foreign public official shall be a criminal offence. Attempt and conspiracy to bribe a foreign public official shall be criminal offences to the same extent as attempt and conspiracy to bribe a public official of that Party.
3.   […]
4.   […]
1    The issue of bribery of a foreign public official was addressed in Part 7 of the CP: Reforming Bribery (2007) Law Commission Consultation Paper No 185.
3    As described in Part 5 below.
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Each Party shall take such measures as may be necessary, in accordance with its legal principles, to establish the liability of legal persons for the bribery of a foreign public official.
THE CURRENT LAW
The Parliamentary background
Part 12 brings in provisions to strengthen the law on international corruption. The sections put beyond doubt that the law of bribery applies to acts involving officials of foreign public bodies, Ministers, MPs and judges; and to “agents” (within the meaning of the 1906 Act) of foreign “principals”. They give courts jurisdiction over crimes of bribery committed by UK nationals and UK incorporated bodies overseas. There is also a technical provision, to ensure that the existing presumption of corruption in the Prevention of Corruption Act 1916, which it is intended to abolish, does not apply any more widely as a result of these new provisions.
4    The Commentaries can be found at the link in n 2 above, after the text of the Convention.
5    Part 6 contains our recommendations on corporate liability for bribery of a foreign public official.
6    Article 3: Sanctions; Article 4: Jurisdiction; Article 5: Enforcement; Article 6: Statute of Limitations; Article 7: Money Laundering; Article 8: Accounting; Article 9: Mutual Legal Assistance; Article 10: Extradition; Article 11: Responsible Authorities; Article 12: Monitoring and Follow-up; Article 13: Signature and Accession; Article 14: Ratification and Depositary; Article 15: Entry into Force; Article 16: Amendment; Article 17: Withdrawal.
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linked to terrorism”.9
4.8     Part 12 was intended as a temporary measure, pending the introduction of comprehensive corruption legislation. The Privy Counsellor Review Committee stated in a report in 2003, which monitored the ongoing application of the 2001 Act, that:
It is welcome that these measures, which have little direct bearing on terrorism, but are in themselves largely uncontroversial, are going to be repealed and replaced in their proper context, the Corruption Bill, which is currently subject to consultation [sic].10
The Part 12 provisions
(1)      For the purposes of any common law offence of bribery it is immaterial if the functions of the person who receives or is offered a reward have no connection with the United Kingdom and are carried out in a country or territory outside the United Kingdom.
(2)      In section 1 of the Prevention of Corruption Act 1906 (c 34) (corrupt transactions with agents) insert this subsection after subsection (3):
(4) For the purposes of this Act it is immaterial if:
7    The long title states that it is “an Act to amend the Terrorism Act 2000; to make further provision about terrorism and security; to provide for the freezing of assets; to make provision about immigration and asylum; to amend or extend the criminal law and powers for preventing crime and enforcing that law; to make provision about the control of pathogens and toxins; to provide for the retention of communications data; to provide for implementation of Title VI of the Treaty on European Union; and for connected purposes”.
8    Hansard (HL), 27 November 2001, vol 629, col 152, by Lord Rooker.
9    Orders of the Day, Hansard (HC), 19 November 2001, vol 375, col 57, by Simon Hughes MP.
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(a)  the principal's affairs or business have no connection with the United Kingdom and are conducted in a country or territory outside the United Kingdom;
(b) the agent's functions have no connection with the United Kingdom and are carried out in a country or territory outside the United Kingdom.
(3)      In section 7 of the Public Bodies Corrupt Practices Act 1889 (c 69) (interpretation relating to corruption in office) in the definition of “public body” for “but does not include any public body as above defined existing elsewhere than in the United Kingdom” substitute “and includes any body which exists in a country or territory outside the United Kingdom and is equivalent to any body described above”.
(4)      In section 4(2) of the Prevention of Corruption Act 1916 (c 64) (in the 1889 and 1916 Acts public body includes local and public authorities of all descriptions) after “descriptions” insert “(including authorities existing in a country or territory outside the United Kingdom)”.
(1)      This section applies if:
(a)       a national of the United Kingdom or a body incorporated under the law of any part of the United Kingdom does anything in a country or territory outside the United Kingdom, and
(b)       the act would, if done in the United Kingdom, constitute a corruption offence (as defined below).
(2)      In such a case:
(a)       the act constitutes the offence concerned, and
(b)       proceedings for the offence may be taken in the United Kingdom.
(3)      These are corruption offences:
(a)       any common law offence of bribery;
(b)       the offences under section 1 of the Public Bodies Corrupt Practices Act 1889 (c 69) (corruption in office);
(c)       the first two offences under section 1 of the Prevention of Corruption Act 1906 (c 34) (bribes obtained by or given to agents).
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(4) A national of the United Kingdom is an individual who is:
(a)       a British citizen, a [British overseas territories citizen], a British National (Overseas) or a British Overseas citizen,
(b)       a person who under the British Nationality Act 1981 (c 61) is a British subject, or
(c)       a British protected person within the meaning of that Act.
DEFICIENCIES OF THE CURRENT LAW
4.16     The WGB assessed the changes made by Part 12 of the 2001 Act in its Phase 1 bis review of 3 March 2003.12 Whilst acknowledging the “very significant steps” taken by the UK, there remained some “areas of uncertainty”.13 Consequently, the Phase 1 bis report recommended that the UK “enact a comprehensive anti-corruption statute” to clarify the law.14
since Phase 1 bis the United Kingdom has not enacted any new foreign bribery offence. The Working Group therefore recommends that the United Kingdom enact at the earliest possible date comprehensive legislation whose scope clearly includes the bribery of a foreign public official.16
11   Reforming Bribery (2007) Law Commission Consultation Paper No 185.
13   Above, at E(a) para 3.
14   Above, at E(b) para 1.
16   Above, at para 248.
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4.18 The following subheadings summarise the “areas of uncertainty” left by the 2001 Act which it is hoped our recommendations would remedy.
The agent/principal relationship
17   CP, paras 4.14 to 4.43.
18   Phase 2 report, para 182. This was despite the assurances of the UK authorities, noted at para 182 of the Phase 2 report, that a defence of consent would have “no basis in current UK law”.
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Uncertainty within and inconsistency between definitions
Application to intermediaries and third party beneficiaries
Possible inadequacies of corporate criminal liability
19   Phase 1 bis report, pp 13 to 14; Phase 2 report, para 183. Again, this was despite the assurance of the then Attorney General when s 108 of the 2001 Act was being debated in the House of Lords that the extension to the current law would “cover all the categories of public officials that the OECD Convention require[s]”: Hansard (HL), 4 December 2001, vol 629, col 818.
20   For example, it might be argued that MPs are excluded from the ambit of the Prevention of Corruption Acts on the basis that they are not “agents” under the 1906 Act and the Houses of Parliament are not “public bodies” under the 1889 Act. On the other hand, the UK authorities cited to the WGB the case of Greenway and others (Central Criminal Court, June 1992), which did not proceed to full trial but which was presided over by Buckley J, as supporting the view that MPs would be caught at common law as “public officers”. See the Phase 2 report, fn 126.
21   “Any undue reward” at common law; “any gift, loan, fee reward, or advantage” under the 1889 Act; and “any gift or consideration” under the 1906 Act.
22   “Offering” at common law; “give, promise, or offer” under the 1889 Act; and “gives or agrees to give or offers” under the 1906 Act.
23   Phase 1 bis report, p 14; Phase 2 report, para 181.
24   Phase 2 report, paras 187 to 188; responses of Corner House and Transparency International (UK) in particular.
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25   Consultation response of the Serious Fraud Office.
26   Phase 2 report, paras 195 to 206.
27   Phase 2 report, paras 168 to 177.
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PART 5
A DISCRETE OFFENCE OF BRIBING A
FOREIGN PUBLIC OFFICIAL
INTRODUCTION: A NEW OFFENCE OF BRIBING A FOREIGN PUBLIC OFFICIAL
OVERVIEW OF OUR CONCLUSIONS
(1) A person (“P”) who bribes a foreign public official (“F”) is guilty of an offence if P’s intention is to influence F in F’s capacity as a foreign public official.
(2) P must also intend to obtain or retain –
(a)  business, or
(b)  an advantage in the course of business.
(3) P bribes F if –
(a) directly or through a third party, P offers, promises or gives any financial or other advantage, either to F or to another person at F’s request or with F’s assent or acquiescence, and
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(b) the advantage is not legitimately due to F, or (if offered, promised or given to another person as mentioned in paragraph (a)) it would not be legitimately due if offered, promised or given to F.
(4) If the law applicable to F permits or requires F to accept a particular financial or other advantage, it is legitimately due.
5.6     There will also be a defence in clause 5:
(1) It is a defence to a charge under section 4 to prove that P reasonably believed that what P did was required or permitted under the law applicable to F (as defined in section 4).2
This defence is discussed in Part 7 below.3
5.8     “Foreign public official” is defined in clause 4(6) of the Bill. It obviously includes anyone holding legislative, administrative or judicial positions, but it extends to cover someone exercising a public function for a foreign country or territory, or for one of that foreign country or territory’s public agencies. It also includes officials of public international organisations, which are themselves defined in clause
4(7).5
THE PROVISIONAL PROPOSALS IN THE CP
5.10 With regard to the elements of the discrete offence, we provisionally proposed that it should be an offence if:
(1) in order to
(a) obtain business;
1    See the discussion in the CP, paras 4.14 to 4.43.
2    Discussed at para 5.133 below.
3    See paras 7.22 to 7.44 below.
4    For the full list of qualifying criteria, see clause 6 of the draft Bill and Part 8 below.
5    For the definition of foreign public official, see the discussion starting at para 5.120 below. For officials of public international organisations, see para 5.130 and following.
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(b) retain business;
(c) obtain or retain a business advantage;
(2)      P gives, offers or agrees to give an advantage to or for any person, being an advantage to which the recipient or intended recipient is not legitimately due, and
(3)      P does so
(a)       intending to influence that person or another person in respect of any act or omission by that person or another person in his or her capacity as a foreign public official; or
(b)       realising that there is a serious risk that the advantage will influence that person or another person in respect of any act or omission by that person or another person in his or her capacity as a foreign public official; or
(c)       intending to influence a third party to use their influence over another person in respect of any act or omission by that person or another person in his or her capacity as a foreign public official.
THE RESPONSES OF CONSULTEES TO THE CP
Those in favour of a discrete offence
6 Or foresaw a serious risk that the advantage would influence the FPO.
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the advantage that convention obligations … can be reflected explicitly by the use of language which mirrors the language of the conventions.
Those against the provision of a discrete offence
7 See para 5.2 above.
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5.25     We turn to specific arguments in favour of a discrete offence below.9
8    See paras 5.61 to 5.71.
9    Paras 5.61 to 5.71.
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THE UNITED KINGDOM’S INTERNATIONAL OBLIGATIONS
The OECD Anti-Bribery Convention10
This Convention seeks to assure a functional equivalence among the measures taken by the Parties to sanction bribery of foreign public officials, without requiring uniformity or changes in fundamental principles of a Party’s legal system.
The core obligation imposed by the OECD Convention
5.28     Article 1.1 of the OECD Convention requires:
Each Party [to] take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business.
10 The Organisation for Economic Co-operation and Development, Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (November 1997).
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5.35     Both of these requirements are addressed in clause 4 of the draft Bill.
Any person holding a legislative, administrative or judicial office of a foreign country, whether appointed or elected; any person exercising a public function for a foreign country, including for a public agency or public enterprise; and any official or agent of a public international organisation.
The limitations of the OECD Convention, and our recommendations
11   “Each Party which has jurisdiction to prosecute its nationals for offences committed abroad shall take such measures as may be necessary to establish its jurisdiction to do so in respect of the bribery of a foreign public official, according to the same principles.”
12   Or “offers” or “promises”.
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FPO EXCHANGES INFLUENCE FOR AN ADVANTAGE FOR A THIRD PARTY
THIRD PARTY ADVANTAGED, WITH A VIEW TO P INFLUENCING THE FPO
PROVIDING ADVANTAGES TO A THIRD PARTY TO INFLUENCE THE FPO
The Government sets up an agency in Urbania to promote British companies. It is meant to be self-financing, through fees paid by firms who wish to use the agency. The agency arranges periodic meetings with FPOs in Urbania. At these meetings, the agency provides information about, and supports the services and products provided by, firms who have paid the fee.
13 CP, paras 7.25 to 7.27.
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The promising, giving or offering, directly or indirectly, of any undue advantage to anyone who asserts or confirms that he or she is able to exert an improper influence over the decision-making of any person referred to [in relation to the principal offence].
14   Woolf Committee, Business Ethics, Global Companies and the Defence Industry (2008, www.woolfcommittee.com), at paras 3.34 to 3.42.
15   CP, para 5.81 to 5.82.
16   See the CP, para 5.86.
17   CP, para 12.30 3(C).
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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… for the purposes of influencing any act or decision of such foreign official… in his official capacity [or] inducing such foreign official… to do or omit to do any act in violation of the lawful duty of such foreign official…18
5.50     Corner House suggested that:
The most appropriate way in which to cover payments through intermediaries, particularly in the context where most foreign bribery is shielded through commission payments made to agents, would be to create an additional offence similar to that under the US FCPA …
ADVANTAGE EXCHANGED FOR INFLUENCE WITH PROSPECTIVE FPO
Perhaps a little surprisingly, persons who apply for office within the civil or public service … are not regarded as, de facto, carrying out public functions. This is the case notwithstanding the obvious public profile of such offices and their proximity to the state.20
18   FCPA, 78dd-2(a)(3).
19   Assuming, of course, that the conferral of the advantage on the FPO in such circumstances is not required or permitted by the law of the land governing the FPO.
20   Ingeborg Zerbes, “Article 1: The Offence of Bribery of Foreign Public Officials”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) p 67.
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An important point about this kind of case is that it will not be easy to identify a clear sense in which a payment was “undue”. Consider the following example:
F is shortly to become King in place of his brother in Urbania. Before the brother abdicates in F’s favour, P pays F a large sum of money to ensure that, when F becomes King, F will reward P with lucrative contracts.
FPOS AND FOREIGN POLITICAL PARTIES
(1) P uses a foreign political party or a foreign political party official as an intermediary to bribe the FPO, and
21 See Part 3.
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(2) P gives an advantage to the FPO for the FPO to transmit to a foreign political party or a foreign political party official.
THE CASE FOR A DISCRETE OFFENCE OF BRIBING A FOREIGN PUBLIC OFFICIAL
Demonstrating a commitment to our international obligations
Making it easier to interpret the law in the light of international obligations
A treaty should be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in that context and in the light of its object and purpose.
22   See, respectively, ss 134 and 135 of the Criminal Justice Act 1988, and ss 50 and 51 of the International Criminal Court Act 2001.
23   [2008] EWHC 714 (Admin), [2008] All ER (D) 151.
24   Above, at para 129.
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made).26
25   Brownlie, Principles of International Law (5th ed 1999) p 47. See also the statement of Lord Diplock in Garland v British Rail [1983] 2 AC 751, 771: “It is a principle of construction of United Kingdom statutes now too well established to call for citation of authority, that the words of a statute passed after the treaty has been signed and dealing with the subject matter of the international obligation of the United Kingdom, are to be construed, if they are reasonably capable of bearing such a meaning, as intended to carry out the obligation and not to be inconsistent with it.” See also P Sales and J Clement, “International law in domestic courts: the developing framework” (2008) Law Quarterly Review 388, 402.
26   See OECD, Bribery in Public Procurement: Methods, Actors and Counter-Measures (2007) p 23, citing evidence provided by the World Bank.
27   The Woolf Committee defines offset as “the requirement placed on the contractor to provide industrial, commercial or other economic benefits to the recipient country as compensation for the main contract to supply…equipment or services”: “Business Ethics, Global Companies and the Defence Industry” (2008) p 27: www.woolfcommittee.com. “Offset” may be beneficial to the recipient country. On occasion, however,what should benefit a community is wrongly diverted for the benefit of an individual.
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Facilitating a comparative approach
Recommendation
THE ELEMENTS OF THE DISCRETE OFFENCE
The offence itself
5.72     The essential elements of the offence were set out above.29
Changes in the offence from the version in the CP
28   SD Tex, Case No H-01-914, April 16, 2002.
29   Para 5.5.
30   Set out at para 5.10 above.
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Do not intentionally give advantages to foreign public officials, to gain or retain business, without a legal justification.
Illustrating the elements of the offence
The basic case of bribery
(1)      P offers to reward a FPO if he or she will award P a contract, which the FPO can do in his or her capacity as a FPO.33
(2)      P entrusts a payment to Z, requesting that Z give it to such FPO as has the power to award the contract to P.
Requests by the FPO to benefit a third party
5.79     Here is an example:
P is asked by a FPO to pay T a sum of money, in exchange for the FPO’s award of a contract to P.
31   Paras 5.112 to 5.118 below. See also the discussion of the same issue in relation to the general offences in Part 3.
32   Paras 5.43 to 5.52 above.
33   In the case where P thinks the FPO has the official power to award the contract but the FPO does not, it ought to be possible to find P guilty of an (impossible) attempt to commit the discrete offence.
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Advantages “not legitimately due”, and facilitation payments
The OECD Convention and the CP
It is also an offence irrespective of, inter alia, the value of the advantage, its results, perceptions of local custom, the tolerance of such payments by local authorities, or the alleged necessity of the payment in order to obtain or retain business or other improper advantage.
It is not an offence, however, if the advantage was permitted or required by the written law or regulation of the foreign public official’s country, including case law.
(1)      the fact that the advantage may be customary, or perceived to be customary, in the circumstances; nor
(2)      any official tolerance of the advantage.34
34 CP, para 7.37. See, further, Ingeborg Zerbes, “Article 1: The Offence of Bribery of Foreign Public Officials”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) at p 104.
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The OECD’s and the CP’s position on facilitation payments
It is generally accepted that a facilitation (or “speed” or “grease”) payment is a payment made with the purpose of expediting or facilitating the provision of services or routine government action which an official is normally obliged to perform.37
Small “facilitation” payments do not constitute payments made “to obtain or retain business or other improper advantage” within the meaning of paragraph 1 and, accordingly, are also not an offence. Such payments, which, in some countries, are made to induce public officials to perform their functions, such as issuing licences or permits, are generally illegal in the foreign country concerned. Other countries can and should address this corrosive phenomenon by such means as support for programmes of good governance. However, criminalisation by other countries does not seem a practical or effective complementary action.
35   Paras 5.80, 5.82 and 5.83 above; clause 4(4) of draft Bill.
36   See Appendix D.
37   CP Appendix F, para F.5.
38   CP Appendix F, para F.9.
39   CP Appendix F, paras F.21 to F.24.
40   See para 5.81 above.
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(1)      a certain level of confusion on the part of the private sector and sometimes the public sector concerning the differentiation between facilitation payments and bribes; and
(2)      an absence of judicial interpretations of the scope of the defence.
The views of consultees
THE PHRASE “NOT LEGITIMATELY DUE”
5.94     We understand this view, but gave our reasons for not adopting it earlier.45
41   For example, the USA, Canada, Australia and New Zealand.
42   Australia.
43   New Zealand.
44   Australia.
45   See para 3.47 above.
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… if “not legitimately due” is removed where does the impropriety lie? It lies in the undue influence intention and not in any act. However the FCPA46 does not demand that the value offered is “undue”. It also rolls up just about everything in the intention lying behind the influence: with intent to corruptly influence … or induce a violation of duty … or secure an improper advantage. However it also includes intent “to induce an act” (in essence) for a business reason. [This] is much more wide ranging and unlikely to pass muster here.
FACILITATION PAYMENTS
46   The Foreign Corrupt Practices Act 1977 is one of a number of US public bribery statutes: CP Appendix C.
47   This is true, but the proposed general offence of bribery did require that the advantage be conferred for the primary reason of inducing a breach of duty.
48   Ingeborg Zerbes, “Article 1: The Offence of Bribery of Foreign Public Officials”, in M. Pieth (ed), The OECD Convention on Bribery (2007), 105.
49   Commentary 8.
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We would be concerned if the law in England and Wales results in the prosecution of a defendant in England and Wales for an offence arising from activities in a foreign jurisdiction where those activities were not criminal acts in that jurisdiction but were acts that were accepted as a normal feature of life or business in that jurisdiction.
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Our recommended approach to facilitation payments
Conclusion
The fault element of the offence
Intention alone, not recklessness
50   See CP Appendix F, paras F.31 to F.37.
51   CP, para 12.30.
52   Part 3, paras 3.67 to 3.70.
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53   See para 5.28 above.
54   Clause 4. A fault requirement of intention will capture most cases in which P foresees it as virtually certain that the advantage will influence an FPO in his or her official capacity, under the rule in Woollin [1999] 1 AC 82. There is every reason to think that this standard common law understanding of intention is wide enough to satisfy the Convention: see Ingeborg Zerbes, “Article 1: The Offence of Bribery of Foreign Public Officials”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) pp 157 to 158.
55   See Conspiracy and Attempts (2007) Law Commission Consultation Paper No 183.
56   See Part 3, para 3.68.
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Recommendation
Defining foreign public official
An autonomous definition
a person who performs public duties or functions for a foreign state, including a person employed by a board, commission, corporation or other body or authority that is established to perform a duty or function on behalf of the foreign state, or is performing such a duty or function; and
an official or agent of a public international organisation that is formed by two or more states or governments, or by two or more such public international organisations.
“Foreign public official” means an individual who –
57 Para 5.36 above.
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(a)       holds a legislative, administrative or judicial position of any kind, whether appointed or elected, of a country or territory outside the United Kingdom (or any subdivision of such a country or territory), or
(b)       exercises a public function for or on behalf of a country or territory outside the United Kingdom (or any subdivision of such a country or territory), or for any public agency or enterprise of that country or territory (or subdivision), or
(c)       is an official or agent of a public international organisation.
The problem of political parties and their officials
In special circumstances, public authority may in fact be held by persons (eg political party officials in single party states) not formally designated as public officials. Such persons, through their de facto performance of a public function, may, under the legal principles of some countries, be considered to be foreign public officials.
58 Paras 5.58 to 5.60 above.
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Officials of public international organisations
(a)       of which 2 or more countries or 2 or more governments are members, or represented on the organisation;
(b)       which is constituted by an organisation to which paragraph (a) applies or by persons representing 2 or more such organisations;
(c)       which is constituted by persons representing 2 or more countries or 2 or more governments.
An international organisation can therefore be defined as an association of entities possessing either full or partial sovereignty under international law, which pursues certain common goals by means of common institutions and by means of an international
treaty.60
5.132     Professor Bindschedler has defined a public international organisation as one:
established and based upon a treaty, which pursues common aims and which has its own special organs to fulfil particular functions
within the organisation.61
59   For further discussion, see Ingeborg Zerbes, “Article 1: The Offence of Bribery of Foreign Public Officials”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007), at pp 70 to 75.
60   Ingeborg Zerbes, “Article 1: The Offence of Bribery of Foreign Public Officials”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) p 75.
61   RL Bindschedler, “International Organisations, General Aspects”, in R Bernhardt (ed), Encyclopedia of Public International Law, vol 2 (1996) p 1289.
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an organisation whose members are any of the following –
(a)       countries or territories,
(b)       governments of countries or territories,
(c)       other public international organisations,
(d)       a mixture of the above.
Recommendation
5.136     A “foreign public official” should be understood as someone who holds a legislative, administrative or judicial position of any kind of a country or territory outside the United Kingdom, or exercises a public function for or on behalf of a country or territory outside the United Kingdom, or for any public agency or enterprise of that country or territory, or is an official or agent of a public international organisation.
Should the discrete offence also inculpate the foreign public official who accepts or solicits a bribe?
The views of consultees
(1)      The Defence Minister of a foreign state is protected by his wider family who hold other positions within the government of that state. He regularly holidays in the south of France. It would be possible to have him arrested under a European arrest warrant and tried in England and Wales.
(2)      The Prime Minister of a foreign state is forced to stand down in the face of mounting domestic pressure. He flees to the UK and is living in exile. Subsequently, allegations are made that he has been involved in bribery. The briber is identified as a UK-based company.
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Conclusion
62   See the General section at the beginning of the Commentaries on the OECD Convention.
63   Oppenheim, International Law (9th ed), vol 1, at p 466.
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Should the offence extend to bribery of foreign private persons?
Conclusion
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PART 6
THE LIABILITY OF COMPANIES AND LIMITED
LIABILITY PARTNERSHIPS FOR BRIBERY
A NEW OFFENCE APPLICABLE TO COMPANIES AND LIMITED LIABILITY PARTNERSHIPS
1    Clause 7.
2    Clause 7(1). It will be for other criminal jurisdictions within the UK to decide whether or not to introduce this offence and apply it to companies and partnerships with registered offices in their jurisdiction. The use of the term “registered office…situated in England and Wales” reflects the fact that companies are “incorporated” in the UK, and not in England and Wales or in some other part of the UK as the case may be. So the use of the term “incorporated in the UK” will remain inappropriate until such time as all the criminal jurisdictions within the UK introduce this offence. Clause 7 of the draft Bill extends liability to limited liability partnerships. For the sake of convenience, in this Part when referring to companies, we are including limited liability partnerships.
3    Under the Corporate Manslaughter and Corporate Homicide Act 2007, it is possible for a wide range of organisations to be liable for the relevant offence. So far as the bribery of foreign public officials is concerned, the Chairman of the OECD Working Group on Bribery has said, in this regard, that “Certainly, where the state has endowed entities with powers to engage in contracts on its behalf, these bodies should not be allowed to escape regulation”: M Pieth, “The Responsibility of Legal Persons”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) p 186.
4    Clause 7(1)(a).
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offences of so-called “active” bribery that can be committed by P, the provider of the advantage.
RECOMMENDATION8
someone (A) performing services on that organisation’s behalf bribes another person,
the bribe was in connection with the business of that organisation, and
someone (other than A) connected with or employed by the organisation, who has responsibility for preventing bribery, negligently fails to prevent A bribing the other person.9
6    Clause 7(6).
7    Clause 7(7) of the draft Bill addresses this point.
8    See clause 7(1).
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6.9 The bribery offences to which the offence of negligently failing to prevent bribery applies should be the offences that can be committed by P (the payer), whether the general offence of bribery10 or the bribery of a foreign public official.11
INDIVIDUAL LIABILITY FOR CONSENTING TO OR CONNIVING AT THE COMMISSION OF BRIBERY
RECOMMENDATION
CRIMINAL LIABILITY IN CONTEXT
9    Clause 7(1)(c).
10   Committed under clause 2.
11   Committed under clause 4.
12   Clause 7(6) and (7).
13   See clause 8(3) and (4).
14   Clause 8.
15   See paras 6.43 to 6.51 below.
16   See para 6.27 below.
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unlikely to face any significant sanction if they tolerate bribery.17 As actionable damage may not be suffered when bribery is committed, this difficulty must be addressed through the strengthening of the criminal law rather than through modification of the civil law.18 Further, our argument will be that it is in the spirit (even if not required by the letter) of our international obligations to do more to prevent bribery, by providing enhanced means of deterring and punishing companies indifferent to the commission of bribery on their behalf.19
6.15     Any legislature that considers imposing criminal liability on companies can choose between a number of different forms that such liability can take. For example, a company could automatically be made liable for the criminal conduct of any of its employees or agents. In England and Wales, that route has traditionally been pursued only when less serious wrongdoing is concerned. To follow that route when a serious offence such as bribery is in issue would be a major step that it may not be advisable to take in relation to one offence in isolation. It is a matter for consideration as part of a broader review of the nature and scope of corporate criminal liability.20 Alternatively, the company can itself be regarded as having committed the offence – even a serious offence – if a selected range of its senior officers (beyond directors or equivalent persons) was culpable. This approach has recently been adopted in relation to manslaughter committed by companies.21 We explain below that special features of manslaughter as a crime make this approach to corporate liability for committing it an approach that cannot straightforwardly be employed to address corporate liability for bribery.22
17   See the discussion at paras 6.52 and 6.53 below.
18   See paras 6.68 to 6.70 below.
19   Paras 6.83 to 6.93 below.
20   See paras 6.25 to 6.28 below.
21   Corporate Manslaughter and Corporate Homicide Act 2007.
22   Paras 6.33 to 6.37 below.
23   See paras 6.40 to 6.61 below.
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as aiming “to institutionalise clear standards of success and failure where the internal standards are in doubt or come to be widely disregarded”.24
6.21     Having said that, the Commission is currently in the early stages of a general review of the liability of organisations, and hopes to start consulting on it in 2009. That review may encompass wider consideration of the extent to which truly regulatory supervision and enforcement should be preferred to, or set alongside, the imposition of more traditional forms of criminal liability.
24   John Gardner, “On the General Part of the Criminal Law”, in Antony Duff (ed), Philosophy and the Criminal Law: Principle and Critique (1998) p 231.
25   See the discussion at paras 6.57 and 6.58 below.
26   See paras 6.43 to 6.51.
27   “Regulatory Justice: Making Sanctions Effective” (Final Report, November 2006).
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a.   What is the conduct that you are seeking to target? A particular event such as late filing of compulsory information? Or behaviour such as dishonesty, negligence, or repeated non-compliance?
b.   What is the range of conduct that you are targeting? Can different kinds of conduct be identified and some of them addressed with more targeted sanctions? For example, can dishonest evasion of a regulatory obligation be separated from the wider non-compliance of failure to provide information to the regulator, where there may be little or no dishonest
intent?29
The “identification” doctrine
30   JF Alford Transport Ltd [1997] 2 Cr App R 326, 331.
31   Tesco Supermarkets Ltd v Nattrass [1972] AC 153, 170.
32   Codification of the Criminal Law (1985) Law Com No 143, para 11.6, and cl 34.
33   Tesco Supermarkets Ltd v Nattrass [1972] AC 153, discussed in AP Simester and GR Sullivan, Criminal Law: Theory and Doctrine (3rd ed 2007) pp 258 to 260. It has been suggested that there is in fact no “identification doctrine” as such, and that the basis of attribution of liability to companies is a matter of statutory interpretation in each case: see the observations of Lord Hoffmann in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, 511. Naturally, it is always open to a court to find that a particular statute cannot be interpreted in the light of the identification doctrine, without defeating the purpose of the statute, as was found in the Meridian case; but we believe that the identification doctrine is now too well established to be regarded as nothing more than an aid to interpretation. It is a rule of law, whose application may be displaced by the context in which a particular statute must be interpreted.
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Consultees’ responses
We agree that this should be seen as part of a much larger review of corporate liability for criminal offences. The topic is potentially difficult and the consequences far reaching … Thus we agree that consideration of the law relating to direct liability of legal persons (incorporated and unincorporated bodies) should be deferred until the Law Commission’s wider review of this area.
6.31     It is important to note, in this respect, that countries that have broadened their regime of liability for legal persons have tended to do so as part of a general review of corporate liability. They have tended not to devise an entirely new structure of corporate liability solely for the purpose of applying it to the offence of
bribery.37
35   M Pieth, “Article 2: The Responsibility of Legal Persons”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) pp 179 to 80; GR Sullivan, “Reforming the Law of Bribery: Bribery Outside England and Wales; Corporate Liability; Defences; Consent to Prosecution” [2008] Criminal Law Review 687.
36   CP, para 9.20. In this context, when speaking of “direct liability”, we include the possibility that an organisation can automatically be made liable for offences committed by its employees.
37   Section 12.3(1) of the Australian Model Penal Code, drafted by the Model Criminal Code Officers’ Committee, General Principles of Criminal Responsibility, Report (1992) ch 2, p 109.
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The provisions of the Corporate Manslaughter and Corporate Homicide Act 2007 do not provide a great deal of help, because health and safety factors which form the basis of that legislation are very different from the conduct associated with bribery.
consultation.38
Recommendation
38 Our future work on general principles of corporate liability will enable us, for example, to consider Article 3(1) of the Second Protocol of the Convention on the Protection of the European Communities’ Financial Interests, which considers the categories of person who should be considered persons representing the company for the purposes of the imposition of liability: see the discussion in the CP, paras 9.14 to 9.17.
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SHOULD THE WHOLE QUESTION OF ORGANISATIONAL LIABILITY FOR BRIBERY BE DEFERRED TO A GENERAL REVIEW?
Consultees’ responses
6.41     Fourteen of 22 consultees who addressed the issue agreed with the view that consideration of indirect liability should be deferred to a general review of organisational liability. They did so on the same kinds of grounds that were given for deferring the issue of direct liability.40 Those who thought we should not leave this issue to a wider review of organisational liability generally thought that such liability should be introduced alongside, and not in place of, a greater degree of direct liability. More generally, Mr Richard Kelly, of Shearman and Sterling, said of our provisional proposals in the CP:
If the purpose of the proposed new law is simply to cover the individual that actually pays or receives the bribe, then the proposed law would serve that purpose. However, if the aim of that law is also to encourage and develop a culture of corporate compliance through deterrence, that goal will be seriously undermined by postponement of the question of corporate liability.
The Woolf Committee report42
39   CP, para 12.46.
40   See paras 6.29 to 6.37 above.
42   Woolf Committee, Business ethics, global companies and the defence industry (May 2008), www.woolfcommittee.com.
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(2), which is a matter for BAE Systems. However, the Woolf Committee’s findings and conclusions in relation to both (1) and (3) are of relevance to our recommendations.
The Company should develop formal processes to ensure business decisions are only taken following an explicit consideration of ethical and reputational risks. Where such risks are identified, the process should ensure any decision to proceed is taken at an appropriate level and should include ratification by the Board.44
The Board should develop its increasingly proactive role in ensuring high standards of ethical business conduct in all the Company’s activities. It should be a standing item on the agenda. There should be an explicit assessment of ethical and reputational risks in all business decisions taken by the Board. Board members should themselves be exemplars of the standards [to be set out in a global code of conduct] and receive regular briefings on emerging issues in
business ethics.45
43   It is also relevant to note the Committee’s 5th observation: “In the light of the results of the consultation on the Law Commission’s proposals for reform of bribery, the Government should quickly bring forward the necessary legislative proposals” (pp 33 and 63).
44   Woolf Committee, Business ethics, global companies and the defence industry (May 2008), www.woolfcommittee.com, p 45.
45   Woolf Committee, Business ethics, global companies and the defence industry (May 2008), www.woolfcommittee.com p 41.
46   J Freedman, “Limited Liability: Large Company Theory and Small Firms” (2000) 63 Modern Law Review 317, 320 to 21.
47   Department for Trade and Industry, Company Law Reform (2005), p 13.
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company’s Board is capable of adaptation so that it applies in a cost-effective way even to very small companies.
The company should continue to forbid facilitation payments as a matter of global policy. While it may not be possible to eliminate such payments immediately in some countries, management and employees in those countries need to be supported to ensure all such payments are reported to senior executives and to the Board, and the means developed to eliminate them completely over time.
48   George Grammas, of Squire, Sanders & Dempsey LLP, in his “Globalisation of the Battle Against Corruption”, http://eurfpn.advisen.com/articles/article77315610-106210071.html, p 2.
49   Facilitation payments are discussed in Appendix D, and were considered in detail in the CP at Appendix F.
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Advisers are often incentivised by commission payments on the successful award of sales contracts, and at a percentage of the contract price. These contracts can be of very large monetary value and commission payments correspondingly large. This can mean an Adviser will have the capability, and some will be tempted, to obtain contracts with the aid of corrupt payments either with or without the knowledge or connivance of the company…A reputable company should take all practicable action to prevent this happening…A defence company must therefore only appoint Advisers where…stringent control measures, based upon ethical and reputational risk, are followed to ensure due diligence in their selection, appointment, management and payment. The company’s Board should be kept fully informed of action taken which should be
closely audited.50
Our revised view
Companies with multinational operations or sales should…endorse anti-corruption policies, because in the end they increase market efficiency and decrease costs. Concerted action by the business community will help expand the market sector driven by value-based competition rather than bribery.51
51   George Grammas, of Squire, Sanders & Dempsey LLP, in “Globalisation of the Battle Against Corruption”, http://eurfpn.advisen.com/articles/article77315610-106210071.html, p 2.
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[A]n offence of inadequate supervision in no way alters or undermines the structure of company law. The offence would merely recognise that in some circumstances one independent person should have a legal responsibility to concern itself with the conduct of another independent person. This truism is particularly in point where the legal entities which are separate and independent in law are
commercially integrated.52
A company should be allowed to demonstrate that it has robust anti-bribery culture and practices, even though, as regards a particular payment, it is unable to prove the absence of any instruction by someone acting on behalf of the company to offer or give an advantage…[such] defences [are] essential to the fairness and acceptability of this domain specific form [of] corporate liability.53
52   GR Sullivan, “Reforming the Law of Bribery: Bribery Outside England and Wales; Corporate Liability; Defences; Consent to Prosecution” [2008] Criminal Law Review 687, 698. However, Professor Sullivan’s own preference was for the introduction of a wider-ranging form of vicarious liability respecting bribery committed by employees or agents of a company.
53   GR Sullivan, “Reforming the Law of Bribery: Bribery Outside England and Wales; Corporate Liability; Defences; Consent to Prosecution” [2008] Criminal Law Review 687, 697.
54   See clauses 7(1)(c) and 7(6).
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Corporations … are mini-jurisdictions and their operating policies are broad, general principles … Once the idea that a corporation’s fault can be approached through its policies is established … [corporate internal decision structures] can be used both to lead a corporation towards liability but also to give it the opportunity to escape. The corporation should be able to rebut the attribution of corporate responsibility to any act of its high managerial staff on the grounds that it is against established internal policy.55
6.58     Along similar lines, Professors Gobert and Punch have argued that:
Locating corporate criminal liability in organisational fault offers at the same time a more restrictive and a more expansive model of corporate criminality than vicarious or imputed liability…The proposed approach is more limiting … in that it would allow the company to avoid liability for crimes of both employees and officers when it has conducted its affairs with due diligence to prevent criminal activity. Conversely, the proposed model is more expansive than the traditional tests in that it envisages situations where the company can be liable where the resultant crime is committed by a third party who is not an employee or agent of the company, and in situations where no individual can be charged with a corporate crime for, say, lack of
mens rea.56
55   C Wells, Corporations and Criminal Responsibility (2nd ed 2001), p 158. Professor Wells’ remarks are not confined to “failure of supervision” offences.
56   James Gobert and Maurice Punch, Rethinking Corporate Crime (2003), p 114. The authors’ remarks are not confined to “failure of supervision” offences.
57   For the figures respecting statutory offences of bribery in England Wales, see the CP, para 2.30.
58   M Pieth, “Article 2: The Responsibility of Legal Persons”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007), p 201. There have been a greater number of prosecutions since then, but we do not have accurate figures for a later period.
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INTERNATIONAL OBLIGATIONS BINDING THE UK
The “failure to supervise/ failure to prevent” offence: a broader European perspective
(1)      Article 3(2) of the Second Protocol of the Convention on the Protection of the European Community’s Financial Interests;
(2)      Article 18(2) of the Council of Europe’s Criminal Law Convention on Corruption; and
(3)      Article 5(2) of the European Council’s Framework Decision 2003/568/JHA.
6.64     Each provision requires that:
[Each party] can be held liable where the lack of supervision or control by a [natural] person … has made possible the commission of [a bribery offence] for the benefit of that legal person by a [natural] person under its authority.
6.66     Respecting Article 5(2), the European Commission has offered the view that:
The liability is a criminal liability, which must be matched by a criminal sanction and that such a criminal sanction may be supplemented by other measures which are administrative or civil in nature.
59 CP, paras 9.39 to 9.58.
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It may be questioned whether it is sufficient to use the civil law to address the involvement of individuals in bribery committed by companies. The aim of the law of tort is to put the parties back in the position they were in before the loss resulting from the commission of the tort was incurred. This does not seem to reflect the ambition of the Conventions. These seem at least to imply that there must be the possibility of imposing liability irrespective of whether the bribery has caused loss giving rise to a claim for compensation.62
companies.64
6.69     In an indirect way, evidence of bribery may also be revealed by a Financial Reporting Review Panel investigation of material departures by a large company from accounting standards. However, the ultimate sanction involved in the small number of such cases where action is taken (on average, 44 cases per year) is only a court order that the company revise its accounts appropriately; and there are no reported instances in which such an order has been made.65
60   CP, para 9.51.
61   CP, paras 9.53 to 9.57.
62   CP, para 9.57.
63   Companies Act 2006, ss 260 to 264 and 994.
65   John Armour, “Enforcement Strategies in UK Corporate Governance: A Roadmap and Empirical Assessment”, Law Working Paper No 106/2008 (April 2008) http://www.ecgi.org/wp/search_title.php?title=enforcement+strategies, p 23.
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The requirements of the OECD Convention respecting the liability of legal persons for bribery of a foreign public official (FPO)
6.73     Article 2 of the OECD Convention says:
Each Party shall take such measures as may be necessary, in accordance with its legal principles, to establish the liability of legal persons for the bribery of a foreign public official.
66 See para 4.4 above.
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Article 2 of the OECD Convention indicates just how mindful the drafters were of national particularities … The interpretation of the Convention therefore has to respect such differences.67
The texts of Articles 2 and 3 of the Convention are not very articulate when it comes to defining the minimum standard to be implemented
by state Parties.69
67   M Pieth, “Article 2: The Responsibility of Legal Persons”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007), p 184.
68   See paras 6.25 to 6.28 above.
69   M Pieth, “Article 2: The Responsibility of Legal Persons”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007), pp 183 to 184.
70   M Pieth, “Article 2: The Responsibility of Legal Persons”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007), p 192.
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given the wide varieties of ways in which Contracting Parties seek to understand and meet their obligations, to provide, as Lord Brown puts it, “continuing processes [through which] it is hoped a consensus view will emerge”.72 This point is taken up further below. Still less, of course, is it the function of the Working Group to extend the reach of the Convention beyond that to which the Contracting Parties agreed.
Building on the basic obligations under the OECD Convention
The interpretation of the Convention … has to respect … differences. Nevertheless, within the process of evaluation the [Working Group on Bribery] is forced to develop standards. The anchor point for “benchmarking” is contained in Article 3.73
72   R (On the application of Corner House Research and others) (Respondents) v Director of the Serious Fraud Office (Appellant) [2008] UKHL 60, [65]. See also Phillip Sales QC and Joanne Clement, “International Law in Domestic Courts: The Developing Framework” [2008] 124 Law Quarterly Review 388, 406.
73   M Pieth, “Article 2: The Responsibility of Legal Persons”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) p 184
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Company A (registered in Country A, a signatory to the Convention) is bidding for a contract in Country X against Company B (registered in Country B, also a signatory to the Convention). Country A imposes liability on companies who bribe foreign public officials only in a very limited range of circumstances. Country B imposes such liability in a much wider range of circumstances. Company A is thus in a position lawfully to make payments to secure the contract which, had it been registered in Country B, would have been regarded as bribery of a foreign public official.
74   http://news.bbc.co.uk/1/hi/business/7399678.stm. These are average, global figures. Corruption is reported in the survey to be much more prevalent outside Europe than within Europe.
75   See the Australian Model Criminal Code, General Principles of Criminal Responsibility, Report (1992), s 12(3), p 109.
116
The World Bank estimates that more than US$1 trillion in bribes is paid annually. Bribery on such a grand scale exerts a significant drag on developing economies, and therefore the World Bank has made elimination of bribery and related practices a major policy objective … [A]nti-corruption enforcement does not look to slow down [sic] in the foreseeable future … [Companies] must take effective steps to be certain they are not directly engaged in corrupt activities and they should review their joint venture, distributorship, sales agency and consultancy arrangements … a company must ensure it has an effective global compliance program in place, including adequate periodic training, in the interest of both the prevention of violations and the mitigation of penalties … 76
With respect to those countries which have implemented corporate criminal liability, the application of a mere identification model, imputing only offences of the most senior management to corporations … would in our view fail to meet the requirements of “effective, proportionate and dissuasive sanctions”.77
77   M Pieth, “Article 2: The Responsibility of Legal Persons”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) p 202, cited by Cornerhouse in their response to the CP.
78   Something the vast majority of our consultees did not wish to see before consideration had been given to its application in a broader context.
79   On “aggregate knowledge” that a company may possess, see M Pieth, “Article 2: The Responsibility of Legal Persons”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) p 202.
117
We believe that the test of “effectiveness, proportionality, and dissuasiveness” can be met only if this approach [focussing on the (in)activity of directors] deems management failure to include the lack of due diligence in hiring, the absence of education and instruction, and a failure of supervision and control. Those laws which comply with the requirements of Article 18(2) of the COE Convention or with the similar terms of Article 3(2) of the Second Protocol of the EU can therefore also be regarded as consistent with the requirements of the OECD Convention regarding corporate liability.80
ORGANISATIONAL LIABLITY FOR CULPABLY FAILING TO PREVENT SOMEONE ACTING ON THE ORGANISTION’S BEHALF COMMITTING BRIBERY
What kind of offence is needed and what kind of defences should there be?
80   M Pieth, “Article 2: The Responsibility of Legal Persons”, in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) pp 192 to 193 (our emphasis).
81   See the passage cited from Professor Sullivan, at para 6.54 above.
82   Broadly translated as, responsibility for selection, education and supervision.
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(1) A corporation may be sentenced to a corporate fine, if a person belonging to a statutory body or other management thereof has been an accomplice to an offence or allowed the commission of an offence or if the care and diligence necessary for the prevention of the offence has not been observed.83
In any proceedings for an offence under any of the preceding provisions of the Part … it shall … be a defence for the person charged to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of the offence by himself or by a person under his control … .
(a)       that the commission of the offence was due to an act or default of another person who was not under his control … ;
(b)       that he carried out all such checks … as were reasonable in all the circumstances … ; and
(c)       that he did not know and had no reason to suspect at the time of the commission of the alleged offence that his act or omission would amount to an offence under the relevant provision.
83   Ch 9, section 2 (“Prerequisites for Liability”).
84   For an analysis, see Smith and Hogan, Criminal Law (11th ed, 2005), pp 161 to 162.
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Should English law follow this model for bribery?
A FAULT REQUIREMENT
85   Para 6.95 above.
86   Clause 7(1)(c).
87   Clause 7(1)(c).
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attributable to the directors (or equivalent) themselves, who have the residual responsibility to ensure that criminal offences are not committed on the company’s behalf. In such a case, the “adequate systems” defence will not
apply.88
AN “ADEQUATE SYSTEMS” DEFENCE
An English company, C, that has anti-bribery policies of which employees are periodically reminded, takes over a company (YCo) based in a country where bribery by companies is common. Immediately following the take-over, a former employee of YCo (now an employee of C) bribes an official to secure a contract. The employee’s supervisor (also a former employee of YCo) says that he or she was still coming to terms with C’s new ways of operating, and had not fully appreciated the wholly categorical nature of the new policy. C is charged with negligently failing to prevent bribery by the employee.
An English company, C, wishes to do business in Blueland. C employs an agent (X) living in Blueland to establish business contacts on C’s behalf with Government officials in Blueland. X bribes those officials to place contracts with C. C can show that it gave Y, their regional manager, the task of ensuring that all foreign agents complied with the company’s anti-bribery policy. Y had failed in her task, as she was busy looking for a job with a rival company.
88   Clause 7(7).
89   See the discussion in C Wells, Corporations and Criminal Responsibility (2nd ed 2001), p 158.
90   In law, a causally relevant factor need not be the sole or main cause of the event, so long as it is significant: Smith [1959] 2 QB 35.
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not a director, will not allow C to escape liability: the failure to prevent bribery is C’s failure even though it came about through the negligence of an employee.91
6.110     Consider, by way of contrast, the following example:
A British company, C, with no previous experience of operating overseas, sets up a subsidiary company to act on its behalf, ZCo, in a country where the payment of bribes to secure contracts is commonplace. C does not have any anti-bribery policies, and does not look closely into how ZCo does its business. ZCo pays a bribe in order to secure an important contract on C’s behalf.
91   Clause 7(1)(c) of the draft Bill.
92   Clause 7(6) of the draft Bill.
93   See the discussion in the next section.
94   Clause 7(1)(c).
95   Para 6.7 above.
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A British company, C, takes over a company (YCo) in Kickbackland, with the former YCo employees now acting on C’s behalf, and one of the former directors of YCo becoming a director of C. The payment of bribes to secure contracts is commonplace in Kickbackland, and so an anti-bribery policy in introduced as company policy by C. When visiting Kickbackland to evaluate progress in securing new contracts, the former director of YCo does not ask whether bribes have been asked for, or paid, to secure contracts for C. Taking this as a signal that the anti-bribery policy is a low priority, C’s employees in Kickbackland pay bribes to secure contracts.
THE SCOPE OF THE SUPERVISION RULE
SHOULD A COMPANY BE LIABLE FOR FAILING TO PREVENT BRIBERY COMMITTED BY ONE OF ITS SUBSIDIARIES?
6.116     In the CP, we provisionally proposed that this issue should be deferred for consideration in a general review of corporate criminal liability. Of the eight consultees who addressed the issue, six agreed with the provisional proposal. It is also not a requirement that such liability be established under the OECD Convention, when bribery of foreign public officials is in issue.
96 Clause 7(7).
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a local individual on the company’s behalf, but not liable if the same act of bribery was committed by a local subsidiary organisation on the company’s behalf.
SHOULD THERE BE A NEED FOR THE BRIBERY TO HAVE BEEN PROVED IN SEPARATE PROCEEDINGS?
97   Para 6.95 above.
98   Paras 6.110 and 6.111.
99   Clause 7(2).
100  Clause 7(3).
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supervise, in that respect, has in fact been convicted of bribery themselves? We believe that this would be too onerous and too restrictive a requirement.101
CONCLUSION
INDIVIDUAL LIABILITY FOR FAILURE TO PREVENT BRIBERY
6.126     In the CP, we asked whether the question of individual liability (respecting directors or persons of equivalent status) for negligent supervision should be left to a general review of corporate criminal liability. Of the 16 consultees who addressed this question, 13 agreed that consideration of this question should be deferred. Accordingly, we will not make a recommendation in this report respecting such liability. It must be kept in mind that we are recommending in this report that it be possible to find individual directors (or equivalent persons) liable on a “consent or connivance” basis when bribery has been committed by their company.
SHOULD IT BE POSSIBLE, AS IT IS UNDER THE FRAUD ACT 2006, TO CONVICT HIGH-RANKING INDIVIDUALS WHO CONSENTED TO OR CONNIVED AT THE COMMISSION OF THE NEW OFFENCE?
101  For more general supporting argument, see the Tasmanian Law Reform Institute, Criminal Liability of Organisations, Final Report No 9 (April 2007), para 6.4.17.
102  Clause 7(2).
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(1)      Subsection (2) applies if an offence under this Act is committed by a body corporate.
(2)      If the offence is proved to have been committed with the consent or connivance of –
(a)       a director, manager, secretary or other similar officer of the body corporate, or
(b)       a person who was purporting to act in any such capacity, he (as well as the body corporate) is guilty of the offence and liable to be proceeded against and punished accordingly.103
It is in the pursuit of corporate objectives that individual employees use bribes. Individuals do the bribing, corporations benefit. Thus to sideline the key player/offender is to ignore the essence of the problem. This is not a case of an offence which sometimes corporations also commit, such as for example fraud, or even manslaughter. The mischief at which bribery offences are directed is almost entirely confined within business activity (or organisational activity if public authorities are included).
103 This regime is also applied by the Theft Act 1968 to the offence created by section 17 of that Act.
104  Clause 8(2).
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If an offence under this Act committed by a body corporate is shown –
(a)       to have been committed with the consent or connivance of an
officer,105 or
(b)       to be attributable to any neglect on his part,
the officer as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.
105 “Officer” is defined in section 400(5).
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PART 7 DEFENCES
INTRODUCTION
7.3     In the CP we provisionally proposed6 that there should be two defences:
(1)      conferring an advantage in order to avert what was reasonably believed to be an imminent danger of physical harm to him or herself or another,7
(2)      conferring an advantage in the reasonable belief that to do so was legally required.
1    In Part 6 we recommended a defence to the corporate offence of negligently failing to prevent bribery. We do not discuss that defence further in this Part.
2    CP, para 8.2.
3    Legislating the Criminal Code: Corruption (1998) Law Com No 248, paras 5.135 to 5.150.
4    Above.
5    CP, para 8.6.
6    CP, paras 8.7 to 8.32.
7    This would be in addition to the common law defences of duress by threats and necessity. It would be a wider defence than duress by threats because the latter is restricted to imminent threats of death or serious injury.
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CONFERRING AN ADVANTAGE IN ORDER TO AVERT WHAT THE PAYER REASONABLY BELIEVED TO BE AN IMMINENT DANGER OF PHYSICAL HARM TO HIM OR HERSELF OR ANOTHER
The views of consultees
8    See paras 7.34 and 7.35 below.
9    CP, paras 8.9 to 8.14.
10   CP, para 8.14.
11   CP, para 8.11.
129
12   In their view, the proposals in the CP governing the fault element were flawed.
13   CP, para 8.11.
130
We are very concerned at this proposed dilution of the defence of duress/necessity. Whilst it may be appropriate to look at the definition of this defence and its application across the criminal justice spectrum generally, it should not be incrementally diluted in this way… On a practical, day-by-day implementation of the criminal law, consistency has a high value, and inconsistent defences between like offences are highly undesirable. Whilst particular examples can often be found where the implementation of the criminal law may be said, at least potentially, to be harsh, these are often more theoretical than practical in nature, and they can be ameliorated by appropriate charging and sentencing decisions (eg an absolute discharge).
CONFERRING AN ADVANTAGE IN THE REASONABLE BELIEF THAT TO DO SO IS LEGALLY REQUIRED OR PERMITTED
The views of consultees in favour of the defence
14 CP, para 8.31.
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The views of consultees against the defence
15   The United Nations Convention against Corruption now has 140 signatories. Articles 15 and 19 require Parties to criminalise bribery of national public officials.
16   See para 7.49 below and cl 5(2) of our draft Bill.
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Although the maxim “ignorance of the law is not a defence” is imperfect, it nonetheless captures the spirit of our approach, and if this defence is embodied in this offence and not in others, it will cause “knock-on” problems.
17   Compare Cambridgeshire and Isle of Ely County Council v Rust [1972] 1 QB 426, with Postermobile PLC v Brent London Borough Council, The Times, 8 December 1997, both discussed in Andrew Ashworth, “Testing Fidelity to Legal Values: Official Involvement and Criminal Justice” in Stephen Shute and AP Simester (eds), Criminal Law Theory: Doctrines of the General Part (2002).
18   See the Canadian case of R v Cancoil Thermal Corporation (1986) 52 CR (3rd) 188.
19   For discussion of the different models for a bribery offence, see CP, Part 4.
133
134
Conferring an advantage in the reasonable belief that to do so was legally permissible
Views of consultees
20   CP, para 8.29.
21   Paragraph 7 of the Commentaries to the OECD Convention distinguishes between “the written law” of a foreign territory and what is customary or tolerated. To confer an advantage on a foreign public official because it is tolerated or customary is an offence in the absence of a written law that makes it permissible or required. English law does not have a concept of “written law” and it does not seem to us helpful to introduce a distinction between “written law” and informal “unwritten law”.
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Conclusion
Burden of proof
Recommendation
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PART 8
BRIBERY COMMITTED OUTSIDE THE
JURISDICTION
INTRODUCTION
done outside the United Kingdom by a person who at that time was:
(a)       a national of the UK,
(b)       a body incorporated under the law of any part of the United Kingdom, or
(c)       a natural person who was ordinarily resident in the United Kingdom.
1    See paras 8.58 to 8.67 below.
2    Participating in Crime (2007) Law Com No 305; Law Commission, Inchoate Liability for Assisting and Encouraging Crime (2006) Law Com No 300. See now the Serious Crime Act 2007, Part 2.
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THE JURISDICTION OF ENGLISH COURTS
Section 109, Anti-terrorism, Crime and Security Act 20016
(1)      by a national of the United Kingdom; or
(2)      by a body incorporated under the law of any part of the United Kingdom
There is no requirement that the act must also constitute an offence under the law of the foreign territory.
3    For the purposes of this report, the common law exceptions are not important.
4    Equally, it can extend the scope of a common law offence to conduct occurring outside England and Wales.
5    Treacy [1971] AC 537, 551 by Lord Reid; Air India v Wiggins [1980] 1 WLR 815.
6    A similar provision applies in relation to Scotland: Criminal Justice (Scotland) Act 2003, s 69.
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7 8 9 10
Interpretation Act 1978, s 5 and Sch 1.
Of which there are three.
Of which there are 14.
Both the 1889 and the 1906 Acts apply to Scotland and Northern Ireland. However, even if an offence-creating provision does apply to other parts of the United Kingdom, the general rule is that any offences committed wholly in Scotland or Northern Ireland are offences under Scots or Northern Ireland law alone.
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THE UNITED KINGDOM’S OBLIGATIONS UNDER INTERNATIONAL CONVENTIONS
DEFECTS IN THE LAW
11   Para 11.9.
12   We referred to Art 4 of the OECD Convention, Art 17 of the Criminal Law Convention on Corruption, Art 7 of the Council of the European Union’s Framework Decision of 22 July 2003 on combating corruption in the private sector and Art 42 of the United Nations Convention Against Corruption.
13   The UK’s obligations under the OECD Convention are confined to active bribery of foreign public officials. By “active” bribery we mean the offence committed by the person who promises or gives the bribe as opposed to the offence committed by the person who solicits or receives the bribe – sometimes referred to as “passive” bribery. Under other Conventions, the UK’s obligations extend to both active and passive bribery whether in the public or private sector. The proposals that we set out in Part 11 of the CP were not confined to the discrete offence that we were proposing and made no distinction between active and passive bribery and between bribery of foreign public officials and bribery of persons in the private sector.
14   CP, para 11.8.
15   CP, para 11.9.
16   CP, para 11.10.
17   At least in relation to principal offenders.
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PRELIMINARY ISSUE
8.20     The Council of HM Circuit Judges said they would be concerned if:
the law in England and Wales results in the prosecution of a defendant in England and Wales for an offence arising from activities in a foreign jurisdiction where those activities were not criminal acts in that jurisdiction but were acts that were accepted as a normal feature of life or business in that jurisdiction.
It is clear that the Council had in mind cases of active bribery.
141
18   Or a body incorporated under the law of any part of the United Kingdom.
19   However, in paragraph 7 of the Commentaries a distinction is drawn between “the written law” of a foreign territory and what is customary or tolerated. To confer an advantage on a foreign public official because it is tolerated or customary is an offence in the absence of a written law that makes it permissible or required. (The distinction between “written” and “customary” law is not one that is recognised in English law.) The Council of HM Circuit Judges appears to believe that it should not be an offence if the advantage conferred is a normal feature of life or business in the territory concerned.
20   See 7.49 above.
142
FOREIGN NATIONALS WHO RESIDE IN THE UNITED KINGDOM, CROWN DEPENDENCIES OR OVERSEAS TERRITORIES
Proposal
Views of consultees
21 CP, para 11.54.
143
“Ordinarily resident”
8.34     Dicey and Morris offer the following comment on the term, “ordinary residence”:
It has sometimes been said that “ordinary residence” means nothing more or less than “residence”, but it is submitted that the better view is that the adjective does add something, an element of continuity, order, or settled purpose.22
as follows:25
It was urged upon your Lordships by counsel for Brent and Barnet Borough Councils (but not, as I understood her ultimate position, by counsel for the Shropshire County Council) that these two decisions of the House were authority only for a special meaning limited to the Income Tax Acts. The converse is the case. The true reading of the speeches delivered is that the House decided to construe the words in their tax context as bearing their natural and ordinary meaning as words of common usage in the English language: note particularly the words of Lord Warrington of Clyffe. In the present cases Lord Denning MR adopted the same view of the natural and ordinary meaning of the words … I agree with Lord Denning MR that in their natural and ordinary meaning the words mean "that the person must be habitually and normally resident here, apart from temporary or occasional absences of long or short duration.” …
… Unless, therefore, it can be shown that the statutory framework or the legal context in which the words are used requires a different meaning, I unhesitatingly subscribe to the view that "ordinarily resident" refers to a man's abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of short or of long duration.
22   Dicey and Morris, The Conflict of Laws (14th ed 2006), para 6-120.
23   Levene v IRC [1928] AC 217, by Lord Warrington at 232.
25   Above, at 341 and 342.
144
strictly.”28
Foreign nationals ordinarily resident in Crown Dependencies or Overseas Territories
26   Section 113A of the Anti-terrorism, Crime and Security Act 2001 makes it an offence for a “United Kingdom resident” to commit an offence contrary to s 113. Section 9(2) defines “resident of the United Kingdom”:
A resident of the United Kingdom is—
an individual who is ordinarily resident in the United Kingdom,
a body incorporated under the law of any part of the United Kingdom, or
a Scottish partnership
The section 113 offence referred to is the use, or threatened use, of a noxious substance or other noxious thing, where that use or threat is designed to influence the Government or intimidate the public.
27   For example, War Crimes Act 1991, s 1; Terrorism Act 2000, s 63A, s 63B; International Criminal Court Act 2001, s 51; Sexual Offences Act 2003, s 72
28   Hansard (HL), 8 March 2001, vol 623, col 421.
145
CORPORATE BODIES
Companies not incorporated under the law of any part of the United Kingdom nor under the law of a Crown Dependency or Overseas Territory
8.46     This is not an issue on which we consulted. It is a question best suited to a more general review of corporate liability, because it raises an issue of relevance to many crimes committed by legal persons, not just bribery. Accordingly, we believe that we should not at this stage make the recommendation suggested by the UK Anti-corruption Forum.
Bodies incorporated under the law of the Crown Dependencies and the Overseas Territories
on this issue.30
29   This includes limited liability partnerships: Limited Liability Partnerships Act 2000, s 1.
30   CP, para 11.57.
146
Views of consultees
such companies.31
Unincorporated bodies
31   See further, Mark Pieth, “Jurisdiction” in M Pieth, L Low, and P Cullen (eds), The OECD Convention on Bribery: A Commentary (2007) pp 275 to 276.
32   CP, para 11.43. See para 8.16 above.
147
An unincorporated body does not have legal personality so criminal liability for corruption could not attach to the body itself. Any criminal liability would have to attach to the people who were members of the unincorporated body. So it would be possible, for example, to bring within the scope of the corruption offences individual members of a partnership where the partnership was drawn up under English law. But we think this would be taking extraterritorial jurisdiction too far. Many people will make their agreements subject to English law even though they have no connection with this country. It would not be fair for them suddenly to find that they were personally subject to English criminal law jurisdiction because of this.33
AT WHAT POINT IN TIME MUST A PERSON FALL WITHIN THE RELEVANT CATEGORY?
RECOMMENDATION
(1) a national of the UK,
33 Annex 1 to Draft Corruption Bill Report and Evidence, Joint Committee on the Draft Corruption Bill (2002-03) HC 705.
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(2) a body incorporated under the law of any part of the United Kingdom, or
(3) a natural person who was ordinarily resident in the United Kingdom.
THE PROPOSALS RELATING TO SECONDARY PARTIES
(1)      where the assistance or encouragement was rendered; and
(2)      the payer’s or the recipient’s citizenship, nationality or place of residence. This proposal did no more than re-state the common law.
(1)      X’s assistance or encouragement takes place wholly or partly within England and Wales; and
(2)      the payer’s or the recipient’s act of bribery:
(a)       constitutes an offence of bribery under English law; or
(b)       would have constituted an offence of bribery under English law had the payer or the recipient satisfied a condition relating to citizenship, nationality or residence.
(1) X’s assistance or encouragement takes place wholly outside England and Wales; and
34   Participating in Crime (2007) Law Com No 305.
35   CP, para 11.59.
36   CP, para 11.60.
37   CP, para 11.64.
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(2) irrespective of whether the payer or the recipient committed an offence known to English law, X would have committed an offence known to English law had he or she done the act of bribery in the place where the payer or the recipient did it.38
Views of consultees
8.64     Of those who addressed the proposals, the overwhelming majority (14/17) said that they agreed with them. Peters and Peters considered that they were “complex and unwieldy”. They said that there should be “a thorough review of the issues of jurisdiction and secondary/inchoate liability”. However, they added, “pending such a review these amendments are necessary to cope with the realities of international commerce”.
Conclusions
38   Eg, X is a Spanish national ordinarily resident in London. He flies to Stockholm and assists P, a Japanese national resident in Tokyo, to bribe R. Under our recommendation at para 8.57 above, X’s liability to prosecution depends on whether X falls within the list in clause 6(3) of the draft Bill because whether X could have been tried if he had committed P’s offence where P had committed it depends on precisely that fact.
39   See para 8.12 above.
40   See para 8.17 above and Article 1(2) of the OECD Convention.
150
THE PROPOSALS RELATING TO INCHOATE LIABILITY
Assisting and encouraging
Conspiracy and attempt
THE NEW OFFENCE OF FAILING TO PREVENT BRIBERY
41   See paras 11.70 to 11.77 of the CP.
42   (2006) Law Com No 300.
43   See paras 11.71, 11.75 and 11.78 of the CP.
44   Following on from our CP, Conspiracy and Attempts (2007) Law Commission Consultation Paper No 183.
45   See Part 6 above.
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PART 9
CONSENT TO PROSECUTION; OTHER
MATTERS
CONSENT TO PROSECUTION
give the consent.2
consent.3
1    Para 12.37.
2    CP, para 12.36.
3    Constitutional Renewal Bill, cl 7 and Schedule 1, cls 1 and 2.
4    Constitutional Renewal Bill, cls 2 and 12.
5    Draft Constitutional Renewal Bill, Volume I Report of the Joint Committee on the Draft Constitutional Renewal Bill (2007-08) HC 551-I, para 114. The report of the Joint Committee was published too late for us to conduct meaningful discussions or consultation on the issue.
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Recommendation
MODE OF TRIAL
Recommendation
PENALTIES
we recommend that on summary conviction, a person may be sentenced to imprisonment for no more than 12 months, to a fine not exceeding the statutory maximum, or to both.6 Following conviction on indictment, a person may be sentenced to imprisonment for no more than 10 years, or to a fine, or to both.7
a fine up to the statutory maximum upon summary conviction, or a fine upon conviction on indictment.8
DISQUALIFICATIONS IN ELECTORAL LAW
6  Clause 10(1)(a).
7  Clause 10(1)(b).
8  Clause 10(2).
153
154
PART 10
LIST OF RECOMMENDATIONS
THE GENERAL OFFENCES
Paragraph 3.28
TWO GENERAL OFFENCES OF BRIBERY
Paragraph 3.33
The offence committed by the payer
Paragraph 3.51
Paragraph 3.72
Paragraph 3.77
The offence committed by the recipient
Paragraph 3.85
Paragraph 3.219
Paragraph 3.220
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10.9 Alternatively, it must be shown that R requested, agreed to receive or accepted an advantage as a reward for the improper performance of a relevant function or activity (Case C).
Paragraph 3.221
Paragraph 3.222
Paragraph 3.223
Paragraph 3.224
Paragraph 3.225
A DISCRETE OFFENCE OF BRIBING A FOREIGN PUBLIC OFFICIAL
Paragraph 5.71
Paragraph 5.119
10.16     We recommend that, a “foreign public official” should be understood as someone who holds a legislative, administrative or judicial position of any kind of a country or territory outside the United Kingdom, or exercises a public function for or on behalf of a country or territory outside the United Kingdom, or for any public agency or enterprise of that country or territory, or is an official or agent of a public international organisation.
Paragraph 5.136
156
DEFENCES
Paragraph 7.49
LIABILITY OF COMPANIES AND LIMITED LIABILITY PARTNERSHIPS
someone (A) performing services on that organisation’s behalf bribes another person,
the bribe was in connection with the business of that organisation, and
someone (other than A) connected with or employed by the organisation, who has responsibility for preventing bribery, negligently fails to prevent A bribing the other person.
Paragraph 6.8
Paragraph 6.9
Paragraph 6.10
Paragraph 6.12
Paragraph 6.39
157
EXTRA-TERRITORIALITY
(1)      a national of the UK,
(2)      a body incorporated under the law of any part of the United Kingdom, or
(3)      a natural person who was ordinarily resident in the United Kingdom.
Paragraph 8.57
CONSENT TO PROSECUTION; OTHER MATTERS
Consent to prosecution
Paragraph 9.7
Mode of trial
Paragraph 9.9
Penalties
(a)       on summary conviction to imprisonment for not more than 12 months, or to a fine up to the statutory maximum, or to both.
(b)       on conviction on indictment to imprisonment for up to 10 years or, to fine, or to both.
Paragraph 9.10
Paragraph 9.11
(Signed) TERENCE ETHERTON, Chairman
ELIZABETH COOKE
DAVID HERTZELL
JEREMY HORDER
KENNETH PARKER
WILLIAM ARNOLD, Chief Executive 2 October 2008
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Appendix A - Bribery Bill
CONTENTS
General offences
1    Bribery: requesting, agreeing to receive or accepting an advantage
2    Bribery: offering, promising or giving an advantage
3    Sections 1 and 2: functions and activities
Bribery of foreign public officials
4    Bribery of foreign public officials
5    Defence
Extra-territorial application 6 Offences under sections 1, 2 and 4: extra-territorial application
Failure to prevent bribery 7 Failure to prevent bribery
General
8    Offences by bodies corporate
9    Consent to prosecution
10    Penalties
11    Consequential provisions
12     Commencement and savings
13    Short title and extent
Schedule 1 — Consequential amendments Schedule 2 — Repeals
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DRAFT OF A
BILL
TO
Make provision for offences relating to bribery; and for connected purposes.
B E IT ENACTED by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
General offences
1 Bribery: requesting, agreeing to receive or accepting an advantage
(1)    A person (“R”) is guilty of an offence in cases A to D.
(2)    Case A is where R requests, agrees to receive or accepts a financial or other advantage intending that, in consequence, a function or activity to which section 3 applies should be performed improperly (whether by R or another person).
(3)    Case B is where—
(a)    R requests, agrees to receive or accepts a financial or other advantage, and
(b)    the request, agreement or acceptance itself constitutes the improper performance by R of a function or activity to which section 3 applies.
(4)    Case C is where R requests, agrees to receive or accepts a financial or other advantage as a reward for the improper performance (whether by R or another person) of a function or activity to which section 3 applies.
(5)    Case D is where, in anticipation of or in consequence of R requesting, agreeing to receive or accepting a financial or other advantage, a function or activity to which section 3 applies is performed improperly—
(a)    by R, or
(b)    by another person at R’s request or with R’s assent or acquiescence.
(6)    In cases A to D it does not matter—
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(a)    whether R requests, agrees to receive or accepts (or is to request, agree to receive or accept) the advantage directly or through a third party,
(b)    whether the advantage is (or is to be) for the benefit of R or another person.
(7) An offence is committed under this section in England and Wales if any part of the conduct element of the offence takes place in England and Wales; but this section is to be read subject to section 6 if no part of the conduct element of the offence takes place in England and Wales.
2         Bribery: offering, promising or giving an advantage
(1)    A person (“P”) is guilty of an offence in cases E and F.
(2)    Case E is where—
(a)    P offers, promises or gives a financial or other advantage to another person, and
(b)    P intends the advantage to induce a person to perform improperly a function or activity to which section 3 applies, or to reward a person for the improper performance of such a function or activity.
(3)    Case F is where—
(a)    P offers, promises or gives a financial or other advantage to another person, and
(b)    P knows or believes that the acceptance of the advantage would itself constitute the improper performance of a function or activity to which section 3 applies.
(4)    In case E it does not matter whether the person to whom the advantage is offered, promised or given is the same person as the person who is to perform, or has performed, the function or activity in question.
(5)    In cases E and F it does not matter whether the advantage is offered, promised or given by P directly or through a third party.
(6)    An offence is committed under this section in England and Wales if any part of the conduct element of the offence takes place in England and Wales; but this section is to be read subject to section 6 if no part of the conduct element of the offence takes place in England and Wales.
3         Sections 1 and 2: functions and activities
(1)    This section applies to those of the following functions and activities which satisfy one or more of conditions 1 to 3—
(a)    any function of a public nature,
(b)    any activity connected with a business, trade or profession,
(c)    any activity performed in the course of a person’s employment, and
(d)    any activity performed by or on behalf of a body of persons (whether corporate or unincorporate).
(2)    It applies even if the function or activity—
(a)    has no connection with the United Kingdom, and
(b)    is carried out in a country or territory outside the United Kingdom.
(3)    Condition 1 is that a person performing the function or activity is expected to perform it in good faith.
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(4)    Condition 2 is that a person performing the function or activity is expected to perform it impartially.
(5)    Condition 3 is that a person performing the function or activity is in a position of trust by virtue of performing it.
(6)    For the purposes of sections 1 and 2 a function or activity to which this section applies—
(a)    is performed improperly if it is performed in breach of a relevant expectation, and
(b)    is to be treated as being performed improperly if there is a failure to perform the function or activity and that failure is itself a breach of a relevant expectation.
(7)    In subsection (6) “relevant expectation”—
(a)    in relation to a function or activity which satisfies condition 1 or 2, means the expectation mentioned in the condition in question, and
(b)    in relation to a function or activity which satisfies condition 3, means any expectation as to the manner in which, or the reasons for which, the function or activity will be performed that arises from the position of trust mentioned in that condition.
(8)    Anything that a person does (or omits to do) arising from or in connection with that person’s past performance of a function or activity mentioned in subsection (1) is to be treated for the purposes of this Act as being done (or omitted) by that person in the performance of that function or activity.
Bribery of foreign public officials
Bribery of foreign public officials
(1)    A person (“P”) who bribes a foreign public official (“F”) is guilty of an offence if P’s intention is to influence F in F’s capacity as a foreign public official.
(2)    P must also intend to obtain or retain—
(a)    business, or
(b)    an advantage in the conduct of business.
(3)    P bribes F if—
(a)    directly or through a third party, P offers, promises or gives any financial or other advantage, either to F or to another person at F’s request or with F’s assent or acquiescence, and
(b)    the advantage is not legitimately due to F, or (if offered, promised or given to another person as mentioned in paragraph (a)) it would not be legitimately due if offered, promised or given to F.
(4)    If the law applicable to F permits or requires F to accept a particular financial or other advantage, it is legitimately due.
(5)    References in this section to influencing F in F’s capacity as a foreign public official mean influencing F in the performance of F’s functions as such an official, which includes—
(a)    any omission to exercise those functions, and
(b)    any use of F’s position as such an official, even if not within F’s authority.
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(6)    “Foreign public official” means an individual who—
(a)    holds a legislative, administrative or judicial position of any kind, whether appointed or elected, of a country or territory outside the United Kingdom (or any subdivision of such a country or territory), or
(b)    exercises a public function for or on behalf of a country or territory outside the United Kingdom (or any subdivision of such a country or territory), or for any public agency or enterprise of that country or territory (or subdivision), or
(c)    is an official or agent of a public international organisation.
(7)    In subsection (6)(c), “public international organisation” means an organisation whose members are any of the following—
(a)    countries or territories,
(b)    governments of countries or territories,
(c)    other public international organisations,
(d)    a mixture of any of the above.
(8)    For the purposes of subsection (4), the law applicable to F is—
(a)    the law of the country or territory in relation to which F is a foreign public official, or
(b)    if F is an official or agent of a public international organisation, the applicable rules of that organisation.
(9)    An offence is committed under this section in England and Wales if any part of the conduct element of the offence takes place in England and Wales; but this section is to be read subject to section 6 if no part of the conduct element of the offence takes place in England and Wales.
5         Defence
(1)    It is a defence to a charge under section 4 to prove that P reasonably believed that what P did was required or permitted under the law applicable to F (as defined in section 4).
(2)    Whether a belief is reasonable is to be determined having regard to all the circumstances, including any steps P has taken to find out what was required or permitted under the law applicable to F.
Extra-territorial application
6         Offences under sections 1, 2 and 4: extra-territorial application
(1)    Subsection (2) applies if—
(a)    no part of the conduct element of an offence under section 1, 2 or 4 takes place in England and Wales,
(b)    a person’s acts done outside the United Kingdom would constitute such an offence if done in England and Wales, and
(c)     that person falls within subsection (3).
(2)    In such a case—
(a)    the acts constitute the offence referred to in subsection (1)(a), and
(b)    proceedings for the offence may be taken in England and Wales.
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(3) A person who was one of the following at the time the acts were done falls within this subsection—
(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 (c. 61) was a British subject,
(f)    a British protected person within the meaning of that Act,
(g)    an individual ordinarily resident in any part of the United Kingdom, (h) a body incorporated under the law of any part of the United Kingdom.
Failure to prevent bribery
Failure to prevent bribery
(1)    A company or limited liability partnership whose registered office is situated in England and Wales (or in Wales) (“C”) is guilty of an offence under this section if—
(a)    a person (“A”) performing services for or on behalf of C bribes another person,
(b)    the bribe was in connection with C’s business, and
(c)    any person (other than A) connected with or employed by C, whose functions at the time of the bribe included preventing persons such as A from committing offences under section 2 or 4 in connection with C’s business, was negligent in failing to prevent A from bribing the other person mentioned in paragraph (a).
(2)     The capacity in which A was performing services for or on behalf of C does not matter, and accordingly A may (for example) be C’s employee or agent, or a subsidiary of C.
(3)    Whether or not A was performing services for or on behalf of C at the time when A bribed the other person is to be determined by reference to all the relevant circumstances and not merely by reference to the nature of the relationship between A and C.
(4)    But if A was an employee of C, it is to be presumed unless the contrary is shown that A was performing services for or on behalf of C.
(5)    For the purposes of subsection (1), A bribes another person if A is, or would be, guilty of an offence under section 2 or 4, whether or not A has been prosecuted for such an offence (and for this purpose it is to be taken that all or part of the conduct element of the offence occurred in England and Wales).
(6)    Except as provided in subsection (7), it is a defence to a charge under this section to prove that C had in place adequate procedures designed to prevent persons performing services for or on behalf of C from committing offences under section 2 or 4.
(7)    The defence in subsection (6) is not available— (a) if C is a company and the negligence referred to in subsection (1)(c) was
that of a director, manager, secretary or other similar officer of C, or a person purporting to act in any such capacity,
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(b) if C is a limited liability partnership and the negligence referred to in subsection (1)(c) was that of a member of C, or a person purporting to act as a member of C.
(8) In this section “company” has the same meaning as in the Companies Acts (see section 1(1) of the Companies Act 2006 (c. 46)).
General
8         Offences by bodies corporate
(1)    Subsection (2) applies if an offence under section 1, 2 or 4 is committed by a body corporate.
(2)    If the offence is proved to have been committed with the consent or connivance of a person mentioned in subsection (3), that person (as well as the body corporate) is guilty of the offence and liable to be proceeded against and punished accordingly.
(3)    The persons are—
(a)    a director, manager, secretary or other similar officer of the body corporate, or
(b)    a person who was purporting to act in any such capacity.
(4)    Where the affairs of a body corporate are managed by its members, this section applies in relation to the acts and defaults of a member in connection with the member’s functions of management as if the member were a director of the body corporate.
9         Consent to prosecution
(1)    No proceedings for an offence under this Act may be instituted against any person except by or with the consent of—
(a)    the Director of Public Prosecutions,
(b)    the Director of the Serious Fraud Office,
(c)    the Director of Revenue and Customs Prosecutions,
(d)    a person authorised by any of those Directors.
(2)    A Director’s authorisation by virtue of subsection (1)(d)—
(a)    may relate to a specified person or to persons of a specified description, and
(b)    may relate to specified circumstances.
10       Penalties
(1)    An individual guilty of an offence under this Act is liable—
(a)    on summary conviction, to imprisonment for a term not exceeding 12 months, or to a fine not exceeding the statutory maximum, or to both,
(b)    on conviction on indictment, to imprisonment for a term not exceeding 10 years, or to a fine, or to both.
(2)    Any other person guilty of an offence under this Act is liable—
(a) on summary conviction, to a fine not exceeding the statutory maximum,
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(b) on conviction on indictment, to a fine.
(3) In relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (c. 44), the reference in subsection (1)(a) to 12 months is to be read as a reference to 6 months.
11       Consequential provisions
(1)    The common law offences of bribery and embracery are abolished.
(2)    Schedule 1 contains consequential amendments.
(3)    Schedule 2 contains repeals.
12       Commencement and savings
(1)    This section and section 13 come into force on the day on which this Act is passed, but otherwise this Act comes into force on such day as the Secretary of State may by order made by statutory instrument appoint.
(2)    An order under subsection (1) may—
(a)    appoint different days for different purposes;
(b)    make such provision as the Secretary of State considers necessary or expedient for transitory, transitional or saving purposes in connection with the coming into force of any provision of this Act.
(3)    This Act does not affect any liability, investigation, legal proceeding or penalty for or in respect of—
(a)    a common law offence of bribery or embracery committed wholly or partly before the coming into force of section 11(1) of this Act, or
(b)    an offence under the Public Bodies Corrupt Practices Act 1889 (c. 69) or the Prevention of Corruption Act 1906 (c. 34) committed wholly or partly before the coming into force of the repeal of the Act by Schedule 2 to this Act.
(4)    For the purposes of subsection (3) an offence is wholly or partly committed before a particular time if any part of the conduct element of the offence occurred before that time.
(5)    Subsections (3) and (4) are without prejudice to section 16 of the Interpretation Act 1978 (c. 30) (general savings on repeal).
13       Short title and extent
(1)    This Act may be cited as the Bribery Act 2008.
(2)    The following provisions of this Act have the same extent as the enactments to which they relate—
(a)    paragraphs 1, 2, 6 and 7 of Schedule 1, and
(b)    the entry in Schedule 2 relating to the Armed Forces Act 2006 (c. 52).
(3)    The remaining provisions of this Act extend to England and Wales only.
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Bribery Bill Schedule 1 — Consequential amendments
SCHEDULES
SCHEDULE 1                                                       Section 11
Consequential amendments Ministry of Defence Police Act 1987 (c. 4)
1             In section 2 of the Ministry of Defence Police Act 1987 (jurisdiction of members of Ministry of Defence Police Force), in subsection (3)(ba), after “1916” insert “and under the Bribery Act 2008”.
Criminal Justice Act 1987 (c. 38)
2             In section 2A of the Criminal Justice Act 1987 (Director of SFO’s pre-investigation powers in relation to bribery and corruption: foreign officers etc.), at the end add—
“(7) This section also applies to any conduct—
(a)    which, as a result of section 3(2) of the Bribery Act 2008, constitutes an offence under section 1 or 2 of that Act, or
(b)    which constitutes an offence under section 4 of that Act.”
Serious Organised Crime and Police Act 2005 (c. 15)
3             The Serious Organised Crime and Police Act 2005 is amended as follows.
4             In section 61 (offences in respect of which investigatory powers apply), for subsection (1)(h) substitute—
“(h) in England and Wales, any offence under the Bribery Act 2008.”
5             In section 76 (financial reporting orders), in subsection (3), for paragraphs (d) to (f) substitute—
“(da) an offence under any of the following provisions of the Bribery Act 2008—
section 1 (bribery: requesting, agreeing to receive or
accepting an advantage), section 2 (bribery: offering, promising or giving an
advantage), section 4 (bribery of foreign public official),”.
Armed Forces Act 2006 (c. 52)
6             In Schedule 2 to the Armed Forces Act 2006 (which lists serious offences the possible commission of which, if suspected, must be referred to a service
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Schedule 1 — Consequential amendments
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police force), in paragraph 12, at the end add—
“(av) an offence under section 1, 2 or 4 of the Bribery Act 2008.”
Serious Crime Act 2007 (c. 27)
In Schedule 1 to the Serious Crime Act 2007 (list of serious offences), for paragraph 9 substitute—
“Bribery 9
An offence under any of the following provisions of the Bribery Act 2008—
(a)    section 1 (bribery: requesting, agreeing to receive or accepting an advantage);
(b)    section 2 (bribery: offering, promising or giving an advantage);
(c)    section 4 (bribery of foreign public officials).”
SCHEDULE 2 Repeals
Section 11
Short title and chapter
Extent of repeal
Public Bodies Corrupt Practices Act 1889 (c. 69)
Prevention of Corruption Act 1906 (c. 34)
Prevention of Corruption Act 1916 (c. 64)
Criminal Justice Act 1988 (c. 33)
Anti-terrorism, Crime and Security Act 2001 (c. 24)
Armed Forces Act 2006 (c. 52)
Local Government and Public Involvement in Health Act 2007 (c. 28)
The whole Act.
The whole Act.
The whole Act.
Section 47. Sections 108 to 110.
In Schedule 2, paragraph 12(l) and (m).
Section 217(1)(a).
In Schedule 14, paragraph 1.
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BRIBERY BILL: EXPLANATORY NOTES
A.1 The purpose of the Bill is to create new offences of bribery. These offences are designed to replace both the common law offence of bribery and the offences under the Prevention of Corruption statutes (which are repealed: see Schedule 2).
CLAUSE 1
A.2 This clause defines the offence of bribery as it applies to the recipient or potential recipient of the bribe, who is called R. It distinguishes four “Cases” from A to D.
A.3 In Cases A, B and C there is a requirement that R “requests, agrees to receive or accepts” an advantage, whether or not R actually receives it (the meaning of “advantage” is to be left to be determined as a matter of common sense by the tribunal of fact). This requirement must then be linked with R’s “improper performance” of a function or activity. The nature of this function or activity is addressed in clause 3(1) to (5), and “improper performance” is defined in clause 3(6) and 3(7).
A.4 The link may take three forms:
(1)      R may intend improper performance to follow as a consequence of the request, agreement to receive or acceptance of the advantage (Case A, in subsection (2)).
(2)      Receiving, agreeing to receive or accepting the advantage may itself amount to improper performance of the relevant function or activity (Case B, in subsection (3)).
(3)      Alternatively, the advantage may be a reward for performing the function or activity improperly (Case C, in subsection (4)).
A.5 In Case D (subsection (5)) what is required is improper performance by R (or that of another person, where R requests it, assents to or acquiesces in it). This performance must be in anticipation or in consequence of a request, agreement to receive or acceptance of the possible advantage.
A.6 In cases A and C, it does not matter whether the improper performance is by R or by another person. By way of contrast, subject to subsection (6), in case B it must be R him or herself who requests, agrees to receive or accepts the advantage.
A.7 Subsection (6) is concerned with the role of R him or herself in requesting, agreeing to receive or accepting advantages, or in benefiting from them, in cases A to D.
A.8 First, subsection (6) makes it clear that in cases A to D it does not matter whether it is R, or someone else through whom R acts, who requests, agrees to receive or accepts the advantage ((6)(a)).
A.9 Secondly, subsection (6) indicates that the advantage can be for the benefit of R, or of another person ((6)(b)).
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A.10 Subsection (7) explains the jurisdictional limits to the offence. If no part of the conduct element takes place in England and Wales, then the offence is to be read subject to clause 6.
CLAUSE 2
A.11 This clause defines the offence of bribery as it applies to the giver or potential giver of the advantage. It is divided into two cases, Case E (subsection (2)) and Case F (subsection (3)).
A.12 Case E concerns cases in which the advantage is intended to bring about the improper performance or to reward it. It is not necessary that the person to whom the advantage is promised or given be the same person as the person who is to engage in the improper performance of an activity or function, or to be rewarded for have engaged in it. This is made clear in subsection (4).
A.13 Case F concerns cases in which P knows or believes that the acceptance of the advantage offered, promised or given in itself constitutes the improper performance. In most cases, the person offered the advantage will be the one for whom it would be an improper act to accept it, but this is not a requirement of Case F.
A.14 Subsection (5) makes it clear that the advantage can be offered, promised or given by P him or herself or by P through someone else.
A.15 Subsection (6) explains the jurisdictional limits to the offence. If no part of the conduct element takes place in England and Wales, then the offence is to be read subject to clause 6.
CLAUSE 3
A.16 This clause defines the fields within which bribery can take place, in other words the types of function or activity that can be improperly performed for the purposes of the first two clauses.
A.17 The purpose of the clause is to ensure that the law of bribery applies equally to public and to selected private functions without discriminating between the two. Accordingly the functions or activities in question include all functions of a public nature and all activities connected with a business, trade or profession. The phrase “functions of a public nature” is the same phrase as is used in the definition of “public authority” in the Human Rights Act 1998, section 6(3)(b). In addition, the functions or activities include all activities performed either in the course of employment or on behalf of any body of persons: these two categories straddle the public/private divide.
A.18 Subsection (2) clarifies that the functions or activities in question may be carried out either in the UK or abroad, and need have no connection with the UK. This preserves the effect of section 108(1) and (2) of the Anti-terrorism, Crime and Security Act 2001.
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A.19 Not every defective performance of one of these functions for reward or in the hope of advantage engages the law of bribery. Subsections (3) to (5) impose the further condition that these functions or activities must have a special character: there must be an expectation that the functions be carried out in good faith, or impartially, or the person performing it must be in a position of trust. Subsections (6) and (7) then define “improper performance” as performance (including non-performance) which breaches that expectation or that trust. Subsection 3(6)(b) makes it clear that an omission can in some circumstances amount to improper “performance”.
A.20 Subsection (8) addresses the case where R is no longer engaged in a given function or activity but still carries out acts related to his or her former function or activity; these acts are treated as done in performance of the function or activity in question.
CLAUSE 4
A.21 This clause creates a separate offence of bribery of foreign public officials. This offence closely follows the requirements of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
A.22 Unlike the general bribery offences, it only covers the giving or offering of bribes, and not the acceptance of them. Also, it requires that the advantage given or offered must be “not legitimately due”, but does not require that the action expected in return must itself be improper. However, the giver of the bribe must intend to influence the recipient in the conduct of his or her duties, and must intend to obtain or retain business or a business advantage.
A.23 Foreign public officials are defined in subsection (6) to include both government officials and those working for international organisations. The definition draws on Article 1.4(a) of the OECD Convention. Similarly, the definition of “public international organisation” in subsection (7) draws on Commentary 17 to the OECD Convention.
The conduct element
A.24 The conduct element of the offence – what a person must do in order to commit the offence – is set out in subsection (3). The offence may be committed in a number of ways.
A.25 If a person (P) offers, promises or gives any advantage to a foreign public official (F) which is not legitimately due to that official, with the requisite intention (see below), that person commits the offence.
A.26 The offence will also be committed if the advantage is offered to someone other than the official, if that happens at the official’s request, or with the official’s assent or acquiescence. In such a case, the advantage will be regarded as “not legitimately due” if that condition would have been satisfied, had it been offered to the official him or herself (subsection (3)(b)).
A.27 It does not matter whether the offer, promise or gift is made directly to the official or through a third party (subsection (3)(a)).
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A.28 Subsections (4) and (8). If the law governing or rules applicable to the official permits or requires the official to accept the advantage, then it is legitimately due and no offence is committed by offering, promising or giving it. If an advantage is merely customary or apparently officially tolerated, that does not amount to it being required or permitted by law.
A.29 If none of the conduct element takes place within England and Wales, then the persons who may commit this offence are limited to those listed at clause 6(3) (provided that clause 6(1)(b) is satisfied also). This is the effect of subsection (9) of clause 4.
A.30 The language of the international Conventions to which the United Kingdom is a party is mirrored in the phrase “offers, promises or gives” and in the word “advantage” in subsection (3), and in the words “public function” in subsection (6)(b).
The fault element
A.31 The fault element of the offence – what a person must intend in order to commit the offence – is specified in subsections (1), (2) and (5).
A.32 Subsections (1) and (5) have the effect that, in order to commit the offence, a person must intend to influence a foreign public official in the performance of his or her functions as a public official, including any failure to exercise those functions and any use of his or her position, even if he or she does not have authority to use the position in that way.
A.33 In order to commit the offence a person must also intend to obtain or retain business or an advantage in the conduct of business (subsection (2)).
CLAUSE 5
A.34 Clause 4 already confines the scope of the offence of bribing foreign public officials to cases where the advantage is not legitimately due, and defines “legitimately due” as meaning that the recipient is either required or permitted to accept it by the applicable law or rules.
A.35 Clause 5 supplements this with a defence, available to the payer if he or she reasonably believed that the payment was required or permitted by the law.
A.36 The reasonableness of the belief is a matter of fact for the tribunal of fact which should take into account all relevant circumstances, including the efforts made by the person charged to find out what the law required or permitted in relation to the official.
CLAUSE 6
A.37 This clause governs the extra-territorial application of the offences under clauses 1, 2 and 4.
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A.38 Those clauses all provide that, subject to clause 6, the respective offences are only committed if some part of the conduct element takes place in England and Wales. Clause 6 provides for the case where no part of the conduct element takes place in the United Kingdom. (If a part of the conduct element takes place in Scotland or Northern Ireland but none of it in England and Wales, no offence under this Bill is committed. There may or may not be an offence under the law of Scotland or of Northern Ireland.)
A.39 The effect of clause 6 is that, even though the actions in question took place abroad, they still constitute the offence if the person performing them was a British national or resident, a national of a British overseas territory or a body incorporated in the United Kingdom.
CLAUSE 7
A.40 Subsection (1). This clause creates an offence that can only be committed by a company or limited liability partnership. The offence consists of negligent failure to prevent bribery being committed in connection with the company’s or partnership’s business. “Bribery” here only means the giving or offering of bribes, contrary to sections 2 and 4; there is no corresponding offence of failure to prevent the taking of bribes.
A.41 The offence is committed when (a) a person employed by or performing services for the company or limited liability partnership gives a bribe, (b) the bribe is in connection with the company’s or partnership’s business and (c) another person connected with the company or partnership, with the responsibility of preventing bribery, negligently fails to do so.
A.42 Subsections (2), (3) and (4). Whether someone is “performing services for or on behalf of C [the company/limited liability partnership]” is a question relating to the actual activities being undertaken at the time rather than of the person’s general position; but where the person is an employee this is to be presumed unless the contrary is shown.
A.43 Subsection (6). Where the negligent failure is that of someone below senior management (as defined in subsection (7)) level, it is a defence that the company or limited liability partnership has shown that it had adequate procedures in place to prevent bribery being committed on its behalf. Senior management, here, includes directors, the company secretary and anyone in a similar position, including members of a limited liability partnership.
CLAUSE 8
A.44 This clause is the converse of clause 7: instead of aiming at companies or partnerships which fail to prevent bribery by individuals, it is aimed at individuals who consent or connive at bribery, contrary to sections 1, 2 or 4, committed by their institution. As well as applying to bribery committed by companies, it extends to bribery committed by bodies corporate of all kinds. It does not apply to the offence in clause 7.
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A.45 The first step is to ascertain that the body corporate has indeed been guilty of an offence under clause 1, 2 or 4. That established, the clause provides that a director or similar senior manager of the body corporate is guilty of the same offence if he or she has consented to or connived at the commission of the offence. In a body corporate managed by its members, the same applies to members.
A.46 It should be noted that in this situation, the body corporate and the director are both guilty of the main bribery offence. This clause does not create a separate offence of “consent or connivance”.
CLAUSE 9
A.47 A prosecution under the Bill can only be brought with the consent of one of the three senior prosecuting authorities, that is to say the DPP, the Director of the Serious Fraud Office and the Director of Revenue and Customs Prosecutions.
A.48 Any of these three may also authorise someone to give consents to prosecution. That person may be authorised either generally or in relation only to a particular description of person or case.
CLAUSE 10
A.49 This clause concerns sentencing. Any offence under the Bill committed by an individual is punishable either by a fine or imprisonment for up to 10 years (12 months on summary conviction), or both. An offence committed by a body is punishable by a fine. In either case, the fine may be up to the statutory maximum if the conviction is summary, unlimited if it is on indictment.
A.50 Section 154 of the Criminal Justice Act 2003, which is not yet in force, sets the maximum sentence that can be imposed by a magistrates’ court at 12 months. Where an offence under this Bill is committed before section 154 comes into force, the magistrates’ court’s power is restricted to 6 months.
CLAUSE 11
A.51 This clause abolishes the common law offences of bribery and embracery (bribery of jurors), and refers to the two Schedules, which contain amendments and repeals.
CLAUSE 12
A.52 This clause covers commencement, which is by order of the Secretary of State; this order may contain appoint different days for different purposes and contain transitory, transitional or saving provisions. The clause also contains express saving provisions, which allow offences under the old law to be prosecuted if any part of the conduct element takes place before the abolition or repeal of the law in question.
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CLAUSE 13
A.53 This clause covers citation and extent. The Bill is generally confined to England and Wales, except that some of the amendments and repeals relate to enactments with a wider extent than this, and therefore themselves have this wider extent.
SCHEDULE 1
A.54 This Schedule contains amendments to other legislation. These are as follows.
Ministry of Defence Police Act 1987
A.55 Section 2 of that Act gives the Ministry of Defence Police the same powers as normal police, in relation to services property or personnel, including offences involving the bribery of such persons. At present these offences are those under the Prevention of Corruption Acts 1889 to 1916. The amendment adds the present Bill to the list. (As the 1987 Act extends to the whole of the United Kingdom, and the Prevention of Corruption Acts remain in force in Scotland and Northern Ireland, it was necessary to leave the references to these Acts in being.)
Criminal Justice Act 1987
A.56 Section 2A of that Act gives the Director of the Serious Fraud Office power to investigate corruption offences. Again the section extends to the whole of the United Kingdom, and the amendment leaves the references to the Prevention of Corruption Acts and adds offences under this Bill to the list. The offences in question are the bribery of foreign officials (clause 4), and the general bribery offence (clauses 1 and 2) where the functions in question are performed outside or unconnected with the United Kingdom.
Serious Organised Crime and Police Act 2005
A.57 Chapter 1 of Part 2 of that Act gives investigatory powers to the Director of Public Prosecutions and other prosecuting authorities in relation to offences listed in section 61. This list was amended by SI 2006/1629 to include common law bribery and offences under the Prevention of Corruption Acts: this amendment extends only to England and Wales. Accordingly it is amended by substituting the offences under the Bill, again only in England and Wales.
A.58 A similar amendment applies to section 76, which gives the court power to make a financial reporting order in dealing with a person convicted of (among other offences) corruption offences.
Armed Forces Act 2006
A.59 Schedule 2 creates a number of military offences with world-wide application, by reference to civilian offences existing in the law of England and Wales. The list of civilian offences is amended to include the offences under the Bill; but as this has the effect of creating new military offences, the application of the amendment is also world-wide.
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Serious Crime Act 2007
A.60 This Act gives power to make a “serious crime prevention order” in relation to offences listed in Schedule 1 of the Act. Part 1 of that Schedule, relating to offences in England and Wales, includes offences under the Prevention of Corruption Acts. The present amendment replaces this reference with offences under clauses 1, 2 and 4 of the Bill. The amendment extends to England and Wales and Northern Ireland, as a court in Northern Ireland may make a serious crime prevention order in relation to offences in England and Wales.
SCHEDULE 2
A.61 This Schedule contains repeals.
A.62 The three Prevention of Corruption Acts are repealed in their entirety. These offences are wholly replaced by the offences under the Bill. The repeal extends only to England and Wales: in Scotland and Northern Ireland the Acts remain in being.
A.63 Sections 108 to 110 of the Anti-terrorism, Crime and Security Act 2001, which extend the geographical scope of the offences under those three Acts, are also repealed, as is section 47 of the Criminal Justice Act 1988, which inserts provisions about penalties into those three Acts.
A.64 In the Armed Forces Act 2006, those paragraphs in the list in Schedule 2 which refer to offences under the Prevention of Corruption Acts are repealed. This repeal is a corollary of the amendment to that list in Schedule 1 to this Bill.
A.65 Section 217(1)(a) of the Local Government and Public Involvement in Health Act 2007 gives the Secretary of State power to define an “entity under the control of a local authority” for the purposes of section 4(2) of the Prevention of Corruption Act 1916. This is now repealed. Paragraph 1 of Schedule 14 to the 2007 Act, which contains amendments to the 1916 Act, is also repealed.
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APPENDIX B
LIST OF THOSE WHO COMMENTED ON
CONSULTATION PAPER NO 185
Judicial and legal practitioners/bodies
Bar Council
Mr George Brown
Mr Jeremy Carver
Clifford Chance
Council of HM Circuit Judges
Criminal Bar Association
Crown Prosecution Service
Mr Tim Daniel
Mr Justice Fulford (on behalf of the President of the Queen’s Bench Division and the Senior Presiding Judge)
Mr John Hatchard
Justices’ Clerks’ Society
Mr Richard Kelly
The Law Society of England and Wales (Criminal Law Committee)
Mr Colin Nicholls QC
Peters & Peters
Mr Martin Polaine
Mr Graham Rodmell
Mr Eoin O’Shea
Simmons & Simmons
Academics
Professor Peter Alldridge (Queen Mary, University of London)
Mr John Child
Professor Stuart Green (Rutgers School of Law, Newark)
Sally Ramage (The Criminal Lawyer)
Professor G R Sullivan (University College London)
Professor Celia Wells (Durham University)
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Professor Gaoneng Yu (Northwest University, Xi’an, China; Durham University)
Government departments and police organisations
Mr Nicholas van Benschoten (Department for Business, Enterprise and Regulatory Reform)
Mr N Dickerson (Foreign and Commonwealth Office)
Mr Piers Harrison (Department for International Development)
Joanna Kuenssberg (Foreign and Commonwealth Office)
Mr D McMillan (Foreign and Commonwealth Office)
Mr C Monteith (Serious Fraud Office)
Ministry of Defence Police
Police Federation of England and Wales
Business persons/organisations
Association of Chartered Certified Accountants
International Chamber of Commerce (UK)
Mr Andrew Berkeley
British Bankers’ Association
Mr Gary Campkin
Confederation of British Industry
Ernst & Young
Financial Services and Markets Legislation City Liaison Group
Institute of Chartered Accountants
Other individuals or organisations
The Corner House
Fraud Advisory Panel Susan Hawley (The Corner House) Public Administration Select Committee Transparency International (UK) UK Anti-Corruption Forum
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APPENDIX C
THE WIDER CONTEXT OF CORRUPT
PRACTICES
C.1 As we explained in paragraph 2.39, our second review of the law on corruption has dealt specifically with bribery. However, the third mandate of our terms of reference was that:
The review will also look at the wider context of corrupt practices to see how the various provisions complement the law of bribery. This will provide the wider context in which the specific reform of bribery law can be considered. This part of the review will comprise a summary of provisions, not recommendations for reform.
C.2 In this Appendix, we highlight existing corruption-related offences and consider how our recommended offence of bribery might operate alongside them.
MISCONDUCT IN PUBLIC OFFICE1
C.3 The courts have struggled to define the common law offence of misconduct in public office.2 The most recent appellate authority to consider its elements was Attorney-General’s Reference (No 2 of 2003),3 in which Pill LJ held the offence to require:
(1)      a public officer acting as such;
(2)      wilfully neglecting to perform his or her duty and/or wilfully misconducting himself or herself;
(3)      to such a degree as to amount to abuse of the public’s trust in the office holder;
(4)      without reasonable excuse or justification.
C.4 The necessary mental elements have caused yet more confusion. “Wilful” refers to that which is deliberate, rather than accidental, and the public officer must know, intend or be subjectively reckless as regards the existence of the duty and the conduct neglecting it. Foresight of the consequences of the misconduct is not an ingredient of the offence as such, but will be relevant to determining whether the misconduct went so far as to amount to abuse of the public’s trust. The threshold of abuse of trust is a high one, such that a mistake, however serious, will be insufficient.
1    Misconduct in public office is not affected by our recommendations on bribery of foreign public officials. It should also be distinguished from the tort of misfeasance in public office: see the comments of Pill LJ in Attorney-General’s Reference (No 3 of 2003) [2005] QB 73, 88.
2    For a comprehensive analysis, see Nicholls, Daniel, Polaine and Hatchard, Corruption and Misuse of Public Office (2006), ch 3.
3    [2005] QB 73.
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C.5 In one sense, misconduct in public office is narrower than our recommendations by virtue of its application to the public sector only. In another, it is broader, since the range of possible misconduct is not limited by an instance of bribery. More generally, whereas bribery always requires at least two parties, a briber and a bribee,4 a public officer can be capable of criminal misconduct entirely of their own devising and involving no-one but themselves.
C.6 The situation may arise where a person commits both bribery and misconduct in public office, such as where public officer R accepts a large sum of money to leak highly confidential information. Here, R may well have satisfied the elements for both offences. However, we do not believe that this is problematic. The fact that the actions or omissions involved in any particular instance of bribery might also amount to the commission of another offence is not a sound reason for disapplying the law of bribery. Offences exist in their own right to distinguish particular forms of wrongful conduct as criminal; that they overlap where conduct is especially criminal serves only to highlight the very grave nature of the activities concerned. In such circumstances, it is right that the prosecution decide on the facts of the case which charge, or combination of charges, properly reflects the criminality of a defendant’s conduct.
C.7 Our recommendations would replace the current law on bribery, which has operated in conjunction with the law on misconduct in public office for well over a century without apparent difficulty. We are confident that our offence would continue this complementary framework.
SALES OF PUBLIC OFFICES
C.8 It is an offence at common law to buy or sell offices of a public nature.5 It is also an offence contrary to section 1 of the Sale of Offices Act 1551 and sections 3 and 4 of the Sale of Offices Act 1809 to buy or sell, or pay or receive any money or other reward for, or solicit or negotiate the purchase or sale of, any office in the gift of the Crown, including military and naval commissions, or any place under the control of a Government department, whether in the United Kingdom or abroad. Sections 5 and 6 of the 1809 Act forbid the opening or advertising of premises to house the business of sales of office; and sections 27 and 29 of the Sheriffs Act 1887 outlaw the sale or purchase of the offices of a sheriff or bailiff.
C.9 We are not aware of any reported cases under the Sale of Offices Acts for over 140 years. This is in part due to changes in the methods of appointment to and dismissal from public office, which have virtually eliminated the problems that these Acts were passed to solve. It is also in part due to the breadth of the common law offence of bribery and the Prevention of Corruption Acts 1889 to 1916.
4    Although under our recommendations, their respective offences are committed independently of the guilt of the other party.
5    R v Vaughan (1769) 4 Burr 2494; Russell on Crime (12th ed, 1964), vol 1, p 374.
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C.10 While the Sale of Offices Acts remain in force, they are superseded to a large extent by the current law and by our recommendations. The sale of a public office, if at all possible any longer, would clearly be contrary to a reasonable expectation that R would act in good faith or in the best interests of the public.6 The particular acts of opening or advertising premises for conducting the business of sales of office would then be characterised as assisting or encouraging the substantive offence of bribery.
CORRUPTION OF CUSTOMS OFFICERS
C.11 The former statutory offence of bribing a customs officer7 was repealed by section 52(1)(a)(ii) of the Commissioners for Revenue and Customs Act 2005. Such cases are currently governed by the Prevention of Corruption Acts and the common law, and would continue to be so under our recommendations.8
CORRUPTION IN THE COURTROOM
Embracery
C.12 Russell on Crime states that embracery consists of:
[a]ny attempt whatsoever to corrupt or influence or instruct a jury … or in any way to incline them to be more favourable to the one side than to the other, by money, promises, letters, threats, or persuasions, except only by the strength of the evidence and the arguments of counsel in open court … .9
C.13 This common law offence is now virtually obsolete and the conduct involved is in any event more likely to be charged as contempt of court or an attempt to pervert the course of justice.10 These alternative avenues would continue to be available alongside our recommendations and would often be the most suitable charging option.11 Nonetheless, the influencing of a juror by means of an advantage would almost certainly contravene a reasonable expectation that the juror act in good faith and impartially. Consequently, a prosecution for bribery would be possible in the appropriate circumstances.
6    For the avoidance of doubt, the sales of office offences do not apply to offices held by foreign public officials.
7    Customs and Management Act 1979, s 15.
8    It would make no difference that R is a customs officer.
9    Russell on Crime (12th ed, 1964), vol 1, p 357.
10   Archbold: Criminal Pleading, Evidence and Practice (2008), paras 28–47 and 28–151. See also the comments of Lawton LJ in R v Owen [1976] 1 WLR 840, at 841, and the approach taken in Attorney-General v Judd [1995] COD 15.
11   Particularly since the influencing of a jury may well not involve a corrupt transaction of any sort, and given the summary nature of contempt of court proceedings.
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Contempt of court; perverting the course of justice
C.14 Whereas embracery addresses bribery of jurors, proceedings for contempt of court or perverting the course of justice can deal with wider instances of corrupt conduct, such as an attempt to intimidate a witness. Here again our recommendations would provide the court or prosecution with an alternative charging option, which would be available where the corrupt conduct could aptly be characterised as bribery. This could be, for example, where the defendant offered prosecution counsel a large sum of money not to adduce a particular piece of evidence.
CORRUPTION AT ELECTIONS
C.15 Bribery, treating, undue influence and personation at elections are corrupt practices at common law. They are also forbidden expressly by the Representation of the People Act 1983 (“the 1983 Act”), the provisions of which have largely superseded the common law offences.
Bribery
C.16 Section 113 of the 1983 Act provides for the various modes by which bribery at elections can be committed:
(1)      A person shall be guilty of a corrupt practice if he is guilty of bribery.
(2)      A person shall be guilty of bribery if he, directly or indirectly, by himself or by any other person on his behalf—
(a)       gives any money or procures any office to or for any voter or to or for any other person on behalf of any voter or to or for any other person in order to induce any voter to vote or refrain from voting, or
(b)       corruptly does any such act as mentioned above on account of any voter having voted or refrained from voting, or
(c)       makes any such gift or procurement as mentioned above to or for any person in order to induce that person to procure, or endeavour to procure, the return of any person at an election or the vote of any voter,
or if upon or in consequence of any such gift or procurement as mentioned above he procures or engages, promises or endeavours to procure the return of any person at an election or the vote of any voter.
For the purposes of this subsection—
(i) references to giving money include references to giving, lending, agreeing to give or lend, offering, promising, or promising to procure or endeavour to procure any money or valuable consideration; and
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(ii) references to procuring any office include references to giving, procuring, agreeing to give or procure, offering, promising, or promising to procure or to endeavour to procure any office, place or employment[; and
(iii) references to procuring the return of any person at an election include, in the case of an election of the London members of the London Assembly at an ordinary election, references to procuring the return of candidates on a list of candidates submitted by a registered political party for the purposes of that election].
(3)      A person shall be guilty of bribery if he advances or pays or causes to be paid any money to or for the use of any other person with the intent that that money or any part of it shall be expended in bribery at any election or knowingly pays or causes to be paid any money to any person in discharge or repayment of any money wholly or in part expended in bribery at any election.
(4)      The foregoing provisions of this section shall not extend or be construed to extend to any money paid or agreed to be paid for or on account of any legal expenses incurred in good faith at or concerning an election.
(5)      A voter shall be guilty of bribery if before or during an election he directly or indirectly by himself or by any other person on his behalf receives, agrees, or contracts for any money, gift, loan or valuable consideration, office, place or employment for himself or for any other person for voting or agreeing to vote or for refraining or agreeing to refrain from voting.
(6)      A person shall be guilty of bribery if after an election he directly or indirectly by himself or by any other person on his behalf receives any money or valuable consideration on account of any person having voted or refrained from voting or having induced any other person to vote or refrain from voting.
(7)      In this section the expression “voter” includes any person who has or claims to have a right to vote.
C.17 It is not surprising that the statutory offence of bribery under the 1983 Act has a very similar structure to our recommended offence. However, it is doubtful whether every instance of electoral bribery would in fact be covered by the recommended offence. An elector is in a sense exercising a public function or activity, but it is not clear that there is a position of trust or an expectation of impartiality or even good faith.
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C.18 On the assumption that an elector is expected to act in good faith, there would be a significant overlap between the existing electoral offence and the proposed general offence. Even so, we are of the view that the new offence would not supersede section 113 of the 1983 Act, which retains an important labelling function. Section 113 creates a specific offence for a specific mischief. Whereas a person convicted under our general offence would be found guilty of bribery, and the electoral context would simply form the background,12 a conviction under section 113 labels the defendant as a person who attempted to undermine the democratic process, and who tried to do so through bribery. Section 113 therefore criminalises two wrongs: the bribery and the democratic harm.
C.19 Furthermore, the penalties for committing the section 113 offence are tailored to the context. They include, for example, disqualification from the electoral register, being incapable of election to the House of Commons, or being unable to hold any elective office.13 Part III of the Representation of the People Act 1983, entitled “Legal Proceedings”, establishes a detailed electoral scheme and provides for the consequences of non-compliance with it. Our recommendations would not subsume this role and we are therefore of the view that they can operate properly alongside section 113.
Treating
C.20 Section 114 of the 1983 Act provides that:
(1)      A person shall be guilty of a corrupt practice if he is guilty of treating.
(2)      A person shall be guilty of treating if he corruptly, by himself or by any other person, either before, during or after an election, directly or indirectly gives or provides, or pays wholly or in part the expense of giving or providing, any meat, drink, entertainment or provision to or for any person—
(a)       for the purpose of corruptly influencing that person or any other person to vote or refrain from voting; or
(b)       on account of that person or any other person having voted or refrained from voting, or being about to vote or refrain from voting.
(3)      Every elector or his proxy who corruptly accepts or takes any such meat, drink, entertainment or provision shall also be guilty of treating.
12   It is acknowledged that the electoral nature of the offence may be considered an aggravating factor in terms of sentencing.
13   Representation of the People Act 1983, s 160.
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C.21 It may be thought, and we take the view, that treating is simply a specialised instance of bribery. There is some difference in popular perception: “bribery” suggests a significant amount of money given as part of an explicit corrupt bargain, while “treating” suggests smaller favours with no strings attached given in order to create good will towards the candidate. However, the statutory definition of bribery includes payments made simply with a view to influencing the voter and without any condition imposed. The only apparent difference between section 113 and section 114 is the nature of the thing conveyed in return for the voting favour. A treat is “meat, drink, entertainment or provision”, whereas a bribe takes the form of money or an office. The line between these benefits is unclear, since there is no apparent limit to the extravagance to which a treat could extend. Moreover, we see little difference between a “treater” providing a lavish meal in order to influence a vote and a briber simply giving the voter the money to pay for the lavish meal, in order to influence the same vote. This uncertainty is compounded by the expansive interpretation given to “money” under section 113(2)(i) as including “any valuable consideration”.
C.22 The various benefits identified as bribes and treats in sections 113 and 114 of the 1983 Act are conflated in our term “advantage”. Hence, treating at elections would be covered by our recommendations to the same extent as bribery at elections, provided in both cases that the doubt about whether an elector is expected to act in good faith can be surmounted. Equally, however, the independent function of section 114 is justified by the same reasoning as that applied to section 113.14 Section 114 targets the wrongs both of this type of bribery and of the improper influence over an election. The latter aspect is the critical difference between this specific offence and the general offence of bribery that we are recommending. In addition, the regime of sanctions available under Part III of the 1983 Act for committing the section 114 offence is designed to deal with this particular form of corrupt conduct. Our recommendations would not therefore impinge on the proper application of section 114.
Undue influence
C.23 Under section 115 of the 1983 Act:
(1)      A person shall be guilty of a corrupt practice if he is guilty of undue influence.
(2)      A person shall be guilty of undue influence—
(a) if he, directly or indirectly, by himself or by any other person on his behalf, makes use of or threatens to make use of any force, violence or restraint, or inflicts or threatens to inflict, by himself or by any other person, any temporal or spiritual injury, damage, harm or loss upon or against any person in order to induce or compel that person to vote or refrain from voting, or on account of that person having voted or refrained from voting; or
14 Paragraphs C.18 and C.19 above.
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(b) if, by abduction, duress or any fraudulent device or contrivance, he impedes or prevents[, or intends to impede or prevent,] the free exercise of the franchise of an elector or proxy for an elector, or so compels, induces or prevails upon[, or intends so to compel, induce or prevail upon,] an elector or proxy for an elector either to vote or to refrain from voting.15
C.24 This offence addresses a different type of corrupt practice to that encompassed by our recommended offence of bribery. It is concerned with corruption through the use or threat of force, or through some deception, neither of which have any real place in the concept of bribery. It should also be noted that typical instances of undue influence are more clearly one-sided than typical cases of bribery: a voter can solicit a bribe, in which case the corrupt conduct is more evenly balanced, but it is difficult to imagine a voter soliciting undue influence. Given the disparate nature of the corrupt practices concerned, we believe that our recommendations would operate independently of section 115.
Personation
C.25 According to section 60 of the 1983 Act:
(1)      A person shall be guilty of a corrupt practice if he commits, or aids, abets, counsels or procures the commission of, the offence of personation.
(2)      A person shall be deemed to be guilty of personation at a parliamentary or local government election if he—
(a)       votes in person or by post as some other person, whether as an elector or as proxy, and whether that other person is living or dead or is a fictitious person; or
(b)       votes in person or by post as proxy—
(i) for a person whom he knows or has reasonable grounds for supposing to be dead or to be a fictitious person; or
(ii) when he knows or has reasonable grounds for supposing that his appointment as proxy is no longer in force.
(3)      For the purposes of this section, a person who has applied for a ballot paper for the purpose of voting in person or who has marked, whether validly or not, and returned a ballot paper issued for the purpose of voting by post, shall be deemed to have voted.
C.26 Personation is a very specific type of corrupt practice. It is entirely distinct from bribery and would not be affected by our recommendations.
15 The words in square brackets in section 115(2)(a) were inserted by the Electoral Administration Act 2006, s 39(1)(a) and by the Local Electoral Administration and Registration Services (Scotland) Act 2006, s 141(1), (2)(a). The words in square brackets in section 115(2)(b) were inserted by the Electoral Administration Act 2006, s 39(1)(b), (2) and by the Local Electoral Administration and Registration Services (Scotland) Act 2006,s 14(1), (2(b).
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Election expenses
C.27 It is an offence contrary to section 82(6) of the 1983 Act knowingly to make a false declaration as to election expenses. As with undue influence and personation at elections, this corrupt practice is of a wholly different character to bribery and our recommendations would have no foreseeable impact on prosecutions for it.
POLITICAL PARTIES, ELECTIONS AND REFERENDUMS ACT 2000
C.28 The Political Parties, Elections and Referendums Act 2000 provides for the establishment of the Electoral Commission, the primary function of which is to regulate and ensure the accountability of political party funding. The Act establishes a number of offences for failing to comply with the rules contained therein and some of these offences may have a corrupt taint to them, such as making a false statement to the Commission.16
C.29 However, our recommendations would operate separately to the provisions of the Political Parties, Elections and Referendums Act 2000. The possible extent to which they overlap is where a person may be bribed to engage in conduct which breaches the rules set down by that Act, thereby committing both bribery and one of the statutory offences. However, as was noted in relation to misconduct in public office in paragraph C.6 above, there are innumerable things which P could bribe R to do and the fact that these things may entail other offences cannot be a reason to restrict the proper ambit of an offence of bribery. We believe that any such coincidences would not impede the effective prosecution either for bribery or for a simultaneous offence under the Political Parties, Elections and Referendums Act 2000.
HONOURS (PREVENTION OF ABUSES) ACT 1925
C.30 Under the Honours (Prevention of Abuses) Act 1925 it is an offence to deal in honours. Section 1 provides that:
(1)      If any person accepts or obtains or agrees to accept or attempts to obtain from any person, for himself or for any other person, or for any purpose, any gift, money or valuable consideration as an inducement or reward for procuring or assisting or endeavouring to procure the grant of a dignity or title of honour to any person, or otherwise in connection with such a grant, he shall be guilty of a misdemeanour.
(2)      If any person gives, or agrees or proposes to give, or offers to any person any gift, money or valuable consideration as an inducement or reward for procuring or assisting or endeavouring to procure the grant of a dignity or title of honour to any person, or otherwise in connection with such a grant, he shall be guilty of a misdemeanour.
16 Political Parties, Elections and Referendums Act 2000, s 39.
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C.31 The conduct proscribed by these offences is in many respects similar to bribery under the Prevention of Corruption Acts. Although it does not require the defendant to have acted “corruptly”, which is the hallmark of the current law on bribery, the corrupt nature of the conduct is inferred from the fact that the defendant is accused of trading in honours.
C.32 The similarity between this legislation and the current law on bribery is reflected in the degree to which our recommendations are sufficiently broad to catch criminal activity of this sort. In simplistic terms, where P offers R an advantage in return for the grant of an honour, intending thereby for R to breach a reasonable expectation that R act in good faith and impartially, P will be guilty of bribery. Conversely, R will also be guilty where he or she knows that the acceptance of the advantage or the grant of the honour would breach a reasonable expectation that R act in good faith or impartially.
C.33 However, we believe that our recommendations would in no way supersede or eclipse the offences established under the Honours (Prevention of Abuses) Act 1925. This was the view expressed in our previous consultation paper on corruption17 and we remain of the same opinion. Parliament took the deliberate step of enacting the honours legislation in addition to the Prevention of Corruption Acts. In doing so, it clearly intended that this specific form of criminal wrongdoing should be prosecuted in its own right, rather than as a form of corruption generally. It would therefore be inappropriate for our recommendations to be applied to a context that Parliament has demarcated as separate to the law on bribery.
THEFT ACT OFFENCES AND CONSPIRACY TO DEFRAUD
C.34 The corrupt conduct substantiating a bribery offence may at the same time result in the commission of offences under the Theft Act 1968. These could include theft,18 false accounting,19 suppression of documents20 or dishonest retention of wrongful credit.21 Where the bribery entails a dishonest agreement between two or more people to cause loss to another, this may also amount to conspiracy to defraud.
C.35 The overlap of our recommendations with these offences is unavoidable. There is already a large degree of overlap within the various theft offences themselves, and between those offences and the offences under the Fraud Act 2006. In all such instances it remains up to the prosecution to proceed with the most appropriate charges on the facts of a given case. Our recommendations should not affect the way in which these prosecutorial decisions are taken.
17   Corruption (1997) Law Commission Consultation Paper No 145, para 2.36.
18   Theft Act 1968, s 1.
19   Above, s 17.
20   Above, s 20.
21   Above, s 24A.
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EXTORTION AND BLACKMAIL
C.36 The common law offence of extortion was abolished by section 31(2)(a) of the Theft Act 1968 and replaced by blackmail.22 However, instances that would previously have been characterised as extortion may also amount to bribery. For example, bribery might foreseeably be committed where R refuses to perform his or her duties unless P gives him an advantage. In these circumstances, the prosecution would have the option of charging either blackmail or bribery.
COMPETITION LAW AND FRAUD
C.37 The relationships between bribery and competition law, and between bribery and fraud, were examined in depth in the CP.23
22   Under section 21 of the Theft Act 1968 Act, blackmail is committed where a person, with a view to gain for himself or another, or intending to cause loss to another, makes an unwarranted demand with menaces.
23   Appendices D and E.
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APPENDIX D SPECIAL CASES
INTRODUCTION
D.1 In this Part we discuss the application of our general definition to three types of payment, namely:
(1)      facilitation payments;
(2)      commission payments;
(3)      corporate hospitality.
D.2 The purpose of this discussion is partly to test the general definition, and partly to explain why no special provisions are required for these payments, either extending or restricting liability. All three types of payment were discussed in detail in Appendix F to the CP. Here the discussion can be briefer, but needs to take account of the fact that our recommended definition of bribery is not the same as the proposal in the CP.
FACILITATION PAYMENTS
D.3 A facilitation payment is given to an official as encouragement to do something which in any case would fall within the official’s functions.1 The misconduct is commonly the simple receipt of the unauthorised payment.
D.4 It is generally agreed that, on broad social grounds, a culture in which facilitation payments are regular and accepted is undesirable and that such payments should be discouraged.2 However, there are degrees of undesirability, and different situations can be distinguished.
(1)      At one extreme, there is the case where the official, if not paid, either will not fulfil the duty at all or will do so only after a seriously damaging delay.
(2)      In the middle, there is the case where the official generally fulfils the relevant duties correctly, but accepts payment for dealing with a particular matter with exceptional despatch or effort.
(3)      Also in the middle are cases in which the official fulfils the relevant duties correctly, but a payment made is part of his or her reason for so doing.
(4)      At the other extreme, there is the case where the payment makes no difference at all to the performance of the official’s functions, but is expected simply as a matter of courtesy in the local culture.
1    Facilitation payments are discussed at length in the CP, paras 4.52 to 4.64 and Appendix F, paras F.4 to F.37.
2    Reasons for this are listed at length in the CP, Appendix F paras F.7 to F.25.
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D.5 Under our scheme, bribery will not include every payment received in breach of duty, because the request for or acceptance of the payment must amount to a betrayal of a position of trust.3 A mere courtesy payment or tip is unlikely to satisfy this criterion. So, many examples of situation (4) will not be covered. It will depend on whether the tribunal of fact finds that to have requested or to have accepted the payment or other advantage in question was in the circumstances a breach of trust. An official can breach trust expressly or impliedly placed in them simply by accepting certain kinds of payments.
D.6 By way of contrast, situations (1) to (3) will all be covered by our scheme in principle. Obviously, they will vary either in terms of whether any particular instance is worth prosecuting, or if so, in terms of how serious the wrongdoing involved really is. In cases where an official speeds up paperwork in exchange for payment, or delays it, or threatens to delay it, if no payment is received, it is the “manner in which” the official is expected to perform his or her duties that falls short of expectations.4 In the case where the official does only as he or she was bound to do, but in part because of a payment made, it is the “reasons for which” the official does the duty that involve a breach of expectations.5
D.7 So far as the payer (P) is concerned, where the prosecution relies on the speeding up of an official response (or some other special favour) at P’s request, P must be found to have intended the payment to induce the official to behave improperly.6 If, by contrast, the prosecution relies simply on the fact that it was wrong as such for the official to accept the advantage, then it must show that P knew or believed that the acceptance was improper.7
COMMISSION PAYMENTS
D.8 Many brokers, agents and the like are remunerated by a commission, payable by the supplier of the product which is sold, even though the agent is supposed to be acting for the buyer. The situation has a superficial resemblance to bribery, in that the agent is performing duties for the buyer, but is motivated by the prospect of the commission (the advantage).
D.9 Much of the discussion in the CP8 concerned the question whether the commission was the primary reason for the agent’s actions. In one sense it obviously is: if there were no commission the agent would not act at all. On the other hand, the commission is not, or ought not to be, the agent’s reason for recommending one product rather than another. If the agent deliberately recommended the most expensive product in order to maximise the commission, without regard to the interests of the client, that would arguably be corrupt.
3    Clauses 1(3), 3(5) and 3(6)(b), operating together.
4  Clause 3(7)(b).
5  Clause 3(7)(b).
6  Clause 2(2)(b).
7  Clause 2(3)(b).
8    CP, Appendix F, paras F.38 to F.58.
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D.10 Our recommended definition does not now incorporate a primary reason test.9 However, we do not believe that the omission of this test will have the effect of rendering criminal normal commission payments.
D.11 One requirement of our recommended definition is that the recipient must be, or propose to be, in breach of an expectation that he or she will act in good faith or impartially, or must betray a position of trust.10 In the case of a broker or agent acting for the client, perhaps in the financial services market, the relevant duty is to act in the best interests of the client. Accordingly, if the agent is honestly seeking the best product for the client, there is no question of bribery, even if the agent receives a commission if the client purchases that product. The scope of bribery will be confined to the case where the agent recommends a product for the sake of the commission, although he or she does not believe, or care, whether it is in the best interests of the client.11 The practical result is the same as if the “primary reason” test had been retained.
D.12 Consequently, there is no need for a special provision for commission payments, either less inclusive or more inclusive than the general definition.
CORPORATE HOSPITALITY
D.13 Many trade and similar organisations have expressed concerns about the potential for the provision of corporate hospitality to fall within the scope of bribery. These concerns fall into two categories: ensuring that conventional corporate hospitality practices should not fall into the ambit of bribery, and providing guidance on what kind and degree of corporate hospitality is or is not acceptable.
D.14 Where a supplier provides corporate entertainment to regular customers, the purpose is normally to cement existing links with the customers, provide information, and keep the existence of the supplier at the forefront of the customers’ minds when it comes to the placing of orders. In that sense it is obviously designed to assist in the acquisition and retention of business, and would be a pointless exercise if it were not. Where those entertained are employees of potential customers, and have responsibility for choosing among possible suppliers, the potentiality for bribery is present.
9    See the discussion in Part 3.
10   Clause 3.
11   Clause 1(5), clause 3(1)(b), clause 3(3) and clause 3(6)(a), operating together.
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D.15 This issue was discussed in detail in the CP,12 and the conclusion was similar to that of the discussion of commission payments, in that it relied on the primary reason test. Where the entertainment was only one factor amongst a number in the employee’s mind leaning in favour of doing business with the supplier, the placing of business with the supplier would not have been bribery. This is for the simple reason that it would not have been the primary reason that the business was placed with the supplier. If however the entertainment was the main factor in the employee’s mind, overwhelming all other considerations, it would have amounted to bribery, under the proposals in the CP, because it would then have been the primary reason for doing business with the supplier.
D.16 Once more, we need to consider whether this is affected by the removal of the primary reason test. In our current recommendation, the test is whether R was influenced by the hospitality, as an advantage accepted by him or her, in a way that breached an expectation that R would act in good faith or impartially, or in accordance with a position of trust.13
D.17 In run-of-the-mill cases in which people accept hospitality in a private sector context, there is simply no breach of a relevant expectation about the way that they will behave that is raised by that acceptance. So, the ordinary giving and receiving of hospitality remains well outside the scope of the law of bribery under our recommendations, in such circumstances. However, in (say) a public sector or trust administration context, that may not be true. In some instances, for a public servant or trustee to accept hospitality of any kind, or of a special kind, from a particular individual would amount to a breach of an expectation concerning the position of trust that that person holds.14
D.18 Even in a private sector context, rare though this will be, the provision of hospitality may be of such a nature or extent that it amounts to an inducement to employees or agents of potential contractors to breach an expectation that they will act in good faith or impartially. In such circumstances, the provision and acceptance of the hospitality can amount to bribery. An example might involve the covert entertainment of potential contractors’ employees at a “lap dancing” club, where the company providing the entertainment intends the employees to feel obliged to favour the company in case the nature of the entertainment they received comes to the attention of their employer.
12   Appendix F, paras F.59 to the end.
13   Clauses 3(3) to 3(5).
14   Clause 3(5) and 3(6)(b).
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