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These notes refer to the Bribery Bill [HL] as brought from the House of Lords on 9 February 2010 [Bill 69]
BRIBERY BILL [HL]
EXPLANATORY NOTES
INTRODUCTION
1. These explanatory notes relate to the Bribery Bill [HL] as brought from the House of Lords on 9 February 2010. They have been prepared by the Ministry of Justice in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.
2. The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require explanation or comment, none is given.
SUMMARY
3. The purpose of the Bill is to reform the criminal law of bribery to provide for a new consolidated scheme of bribery offences to cover bribery both in the United Kingdom (UK) and abroad.
4. The Bill replaces the offences at common law and under the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916 (known collectively as the Prevention of Corruption Acts 1889 to 1916 and which would be repealed: see Schedule 2) with two general offences. The first covers the offering, promising or giving of an advantage (broadly, offences of bribing another person). The second deals with the requesting, agreeing to receive or accepting of an advantage (broadly, offences of being bribed). The formulation of these two offences abandons the agent/principal relationship on which the current law is based in favour of a model based on an intention to induce improper conduct. The Bill also creates a discrete offence of bribery of a foreign public official and a new offence where a commercial organisation fails to prevent bribery.
Bill 69?EN 54/5
5. The other main provisions of the Bill include:
- replacing the existing requirement for the Attorney General’s consent to prosecute a bribery offence with a requirement that the offences in the Bill may only be instituted by, or with the consent of, the Director of the relevant prosecuting authority.
- a maximum penalty of 10 years imprisonment for all new offences, except the offence relating to commercial organisations, which will carry an unlimited fine;
- extra-territorial jurisdiction to prosecute bribery committed abroad by persons ordinarily resident in the UK as well as UK nationals and UK corporate bodies;
- a defence for conduct that would constitute a bribery offence where the conduct was necessary for the proper exercise of any function of the intelligence services or the armed forces engaged on active service.
BACKGROUND
6. The reform of the law on bribery dates back to the Nolan Committee’s Report on Standards in Public Life in 1995 (Cm 2850I), which was set up in response to concerns about unethical conduct by those in public office, and its suggestion that the Law Commission might usefully take forward the consolidation of the statute law on bribery. The Law Commission first made proposals for reform of bribery in a 1998 report (Legislating the Criminal Code: Corruption, Report No. 248).
7. The Government then set up a working group of stakeholders which met over the period 1998-2000, and this was followed in June 2000 by a Government White Paper on corruption (Raising Standards and Upholding Integrity: the prevention of Corruption Cm 4759). This was positively received and led to the publication of a draft Corruption Bill in 2003 (Corruption Draft Legislation Cm 5777). That draft Bill was then subjected to pre-legislative scrutiny by a Joint Committee of Parliament which reported in July 2003 (Joint Committee on the Draft Corruption Bill Session 2002-03 Report and Evidence HL 157, HC 705). The draft Bill failed to win broad support, in particular the Joint Committee was critical of the retention of the agent/principal relationship as the basis for the offence.
8. The Government responded to the Joint Committee’s report in December 2003 (The Government Reply to the Report from the Joint Committee on the Draft Corruption Bill Session 2002-03 HL 157, HC 705, Cm 6068). In its response, the Government accepted the Report’s recommendations in part but expressed reservations about the suggestions made by the Committee in relation to how the offences should be structured given its rejection of the principal/agent model. A Government consultation exercise, Bribery: Reform of the Prevention of Corruption Acts and SFO powers in cases of bribery of foreign officials, followed in 2005. The Government concluded that, although there remained support for reform, there was no clear consensus on the form it should take. It was therefore decided to refer the matter back to the Law Commission for a further review.
9. The Law Commission’s terms of reference were to consider the full range of options for consolidating and reforming the law on bribery. The Law Commission issued a consultation paper, Reforming Bribery (Consultation Paper No. 185), in October 2007. The Law Commission published its report Reforming Bribery (Report No. 313) on 20 November 2008.
10. The Government presented a draft Bribery Bill (Cm 7570) to Parliament on 25 March 2009 which built on the proposals in the Law Commission’s report. A Joint Committee of Parliament was established to undertake pre-legislative scrutiny of the draft Bill. It reported on 28 July 2009 (Joint Committee on the Draft Bribery Bill, First Report, Session 2008-09, HL115, HC430 - I & II). The Government responded to the Joint Committee’s report on 20 November 2009 (Government Response to the conclusions and recommendations of the Joint Committee Report on the Draft Bribery Bill, Cm7748).
TERRITORIAL EXTENT
11. Clause 18 sets out the territorial extent of the Bill. Its main substantive provisions extend throughout the UK.
Territorial application: Scotland
12. A draft legislative consent motion has been lodged by the Cabinet Secretary for Justice in the Scottish Parliament under the Sewel Convention. The Convention is triggered as the Bill makes provision concerning the criminal law of Scotland in relation to bribery. The Sewel Convention provides that Westminster will not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament. If there are any amendments relating to such matters which trigger the Convention, the consent of the Scottish Parliament will be sought for these amendments.
Territorial application: Wales
13. The Bill applies to Wales as it does to the rest of the UK. It does not change the position as regards the National Assembly for Wales nor does it affect the powers of the Welsh Ministers.
Territorial application: Northern Ireland
14. The Bill applies to Northern Ireland as it does to the rest of the UK. It does not change the position as regards the Northern Ireland Assembly.
COMMENTARY ON CLAUSES
Clause 1: Offences of bribing another person
15. This clause defines the offence of bribery as it applies to the person who offers, promises or gives a financial or other advantage to another. That person is referred to in the clause as P. The meaning of “financial or other advantage” is left to be determined as a matter of common sense by the tribunal of fact. Clause 1 distinguishes two cases: Case 1 (subsection (2)) and Case 2 (subsection (3)).
16. Case 1 concerns cases in which the advantage is intended to bring about an improper performance by another person of a relevant function or activity, or to reward such improper performance. The nature of a “relevant function or activity” is addressed in clause 3. The nature of “improper performance” is defined in clause 4.
17. It is sufficient for the purposes of the offence that P intended to induce or reward impropriety in relation to a function or activity falling within clause 3(2) to (5). It is not necessary that the person to whom the advantage is offered, promised or given be the same person as the person who is to engage in the improper performance of an activity or function, or who has already done so (subsection (4)).
18. Case 2 concerns cases in which P knows or believes that the acceptance of the advantage offered, promised or given in itself constitutes the improper performance of a function or activity as defined in clause 3.
19. Subsection (5) makes it clear that, in Cases 1 and 2, the advantage can be offered, promised or given by P directly or through someone else.
Clause 2: Offences relating to being bribed
20. 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, namely Case 3 to Case 6.
21. In Cases 3, 4 and 5 there is a requirement that R “requests, agrees to receive or accepts” an advantage, whether or not R actually receives it. This requirement must then be linked with the “improper performance” of a relevant function or activity. As with clause 1, the nature of this function or activity is addressed in clause 3, and “improper performance” is defined in clause 4.
22. The link between the request, agreement to receive or acceptance of an advantage and improper performance may take three forms:
- R may intend improper performance to follow as a consequence of the request, agreement to receive or acceptance of the advantage (Case 3, in subsection (2));
- requesting, agreeing to receive or accepting the advantage may itself amount to improper performance of the relevant function or activity (Case 4, in subsection (3));
- alternatively, the advantage may be a reward for performing the function or activity improperly (Case 5, in subsection (4)).
23. In Cases 3 and 5, it does not matter whether the improper performance is by R or by another person. In Case 4, it must be R’s requesting, agreeing to receive or acceptance of the advantage which amounts to improper performance, subject to subsection (6).
24. In Case 6 (subsection (5)) what is required is improper performance by R (or 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 an advantage.
25. Subsection (6) is concerned with the role of R in requesting, agreeing to receive or accepting advantages, or in benefiting from them, in Cases 3 to 6. First, this subsection makes it clear that in Cases 3 to 6 it does not matter whether it is R, or someone else through whom R acts, who requests, agrees to receive or accepts the advantage (subsection (6)(a)). Secondly, subsection (6) indicates that the advantage can be for the benefit of R, or of another person (subsection (6)(b)).
26. Subsection (7) makes it clear that in Cases 4 to 6, it is immaterial whether R knows or believes that the performance of the function is improper. Additionally, by subsection (8), in Case 6 where the function or activity is performed by another person, it is immaterial whether that person knew or believed that the performance of the function is improper.
Clause 3: Function or activity to which bribe relates
27. 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 clauses 1 and 2. The term “relevant function or activity” is used for this purpose.
28. 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 section 6(3)(b) of the Human Rights Act 1998 but it is not limited in the way it is in that Act. 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.
29. 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) make clear that there must be an expectation that the functions be carried out in good faith (condition A), or impartially (condition B), or the person performing it must be in a position of trust (condition C).
30. Subsection (6) provides 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 (which would be repealed by the Bill).
Clause 4: Improper performance to which bribe relates
31. Clause 4 defines “improper performance” as performance which breaches a relevant expectation, as mentioned in condition A or B (subsections (3) and (4) of clause 3 respectively) or any expectation as to the manner in which, or reasons for which, a function or activity satisfying condition C (subsection (5) of clause 3) will be performed. Subsection (1)(b) states that an omission can in some circumstances amount to improper “performance”.
32. Subsection (3) 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 5: Expectation test
33. Clause 5 provides that when deciding what is expected of a person performing a function or activity for the purposes of clauses 3 and 4, the test is what a reasonable person in the UK would expect of a person performing the relevant function or activity. Subsection (2) makes it clear that in deciding what a reasonable person in the UK would expect in relation to functions or activities the performance of which is not subject to UK laws, local practice and custom must not be taken into account unless such practice or custom is permitted or required by written law. Subsection (3) defines what is meant by “written law” for the purposes of this clause.
Clause 6: Bribery of foreign public officials
34. This clause creates a separate offence of bribery of a foreign public official. This offence closely follows the requirements of the Organisation for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions ().
35. Unlike the general bribery offences in clauses 1 and 2, the offence of bribery of a foreign public official only covers the offering, promising or giving of bribes, and not the acceptance of them. The person giving the bribe must intend to influence the recipient in the performance of his or her functions as a public official, and must intend to obtain or retain business or a business advantage.
36. Foreign public officials are defined in subsection (5) 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 (6) draws on Commentary 17 to the OECD Convention.
The conduct element
37. 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.
38. If a person (P) offers, promises or gives any advantage to a foreign public official (F) with the requisite intention (see below), and the written law applicable to F neither permits nor requires F to be influenced in his or her capacity as a foreign public official by the offer, promise or gift, then P commits an offence.
39. The “written law” applicable to F is defined in subsection (7) as the law of the relevant part of the UK where the performance of F’s functions would be subject to that law. Where the performance of F’s functions would not be subject to the law of a part of the UK, the written law is either the applicable rules of a public international organisation, or the law of the country or territory in relation to which F is a foreign public official as contained in its written constitution, provision made by or under legislation or judicial decisions that are evidenced in writing.
40. 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.
41. It does not matter whether the offer, promise or gift is made directly to the official or through a third party (subsection (3)(a)).
42. The language of the OECD Convention is mirrored in the phrases “obtain or retain business” in subsection (2) and “offers, promises or gives” and “advantage” in subsection (3), and in the words “public function” in subsection (5)(b).
The fault element
43. The fault element of the offence - what a person must intend in order to commit the offence - is specified in subsections (1), (2) and (4).
44. Subsections (1) and (4) 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.
45. 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)).
46. The effect of subsection (8) is that “business” includes what is done in the course of a trade or profession.
Clause 7: Failure of commercial organisations to prevent bribery
47. Clause 7 creates an offence of failing to prevent bribery which can only be committed by a relevant commercial organisation.
48. “Relevant commercial organisation” is defined (at subsection (5)) as:
- a body incorporated under the law of any part of the UK and which carries on business whether there or elsewhere,
- a partnership that is formed under the law of any part of the UK and which carries on business there or elsewhere, or
- any other body corporate or partnership wherever incorporated or formed which carries on business in any part of the UK.
49. Subsection (5) also provides that “business” includes a trade or profession and includes what is done in the course of a trade or profession.
50. The offence is committed where a person (A) who is associated with the commercial organisation (C) bribes another person with the intention of obtaining or retaining business or an advantage in the conduct of business for C. Subsection (2) provides that it is a defence for the commercial organisation to show it had adequate procedures in place to prevent persons associated with C from committing bribery offences. Although not explicit on the face of the Bill, in accordance with established case law, the standard of proof the defendant would need to discharge is the balance of probabilities.
51. Subsection (3) provides that “bribery” in the context of this offence relates only to the offering, promising or giving of a bribe contrary to clauses 1 and 6 (there is no corresponding offence of failure to prevent the taking of bribes). Applying ordinary principles of criminal law, the reference to offences under clause 1 and 6 include being liable for such offences by way of aiding, abetting, counselling or procuring (secondary liability). Subsection (3) also makes clear that there is no need for the prosecution to show that the person who committed the bribery offence has already been successfully prosecuted. The prosecution must, however, show that the person would be guilty of the offence were that person prosecuted under this Bill. Finally, subsection (3)(b) makes clear that there is no need for A to have a close connection to the UK as defined in clause 12; rather, so long as C falls within the definition of “relevant commercial organisation” that should be enough to provide courts in the UK with jurisdiction.
Clause 8: Meaning of associated person
52. Clause 8 provides that A is associated with C for the purposes of clause 7, if A performs services for, or on behalf of C. It also ensures that clause 7 relates to the actual activities being undertaken by A at the time rather than A’s general position. The clause expressly states that A may be the commercial organisation’s employee, agent or subsidiary. But where A is an employee it is to be presumed that A is performing services for or on behalf of C unless the contrary is shown.
Clause 9: Guidance about commercial organisations preventing bribery
53. This clause requires the Secretary of State to publish guidance on procedures that relevant commercial organisations can put in place to prevent bribery by persons associated with them (subsection (1)). The Secretary of State may revise such guidance or publish revised guidance from time to time (subsection (2)). The Scottish Ministers must be consulted before publication (subsection (3)). The guidance may be published in such a manner as the Secretary of State considers appropriate (subsection (4)). The Government has indicated its intention to publish guidance ahead of the commencement of clause 7 of the Bill (Hansard, House of Lords, 2 February 2010, Vol. 717, col.143).
Clause 10: Consent to prosecution
54. A prosecution under the Bill in England and Wales can only be brought with the consent of the Director of one of the three senior prosecuting authorities, that is to say the Director of Public Prosecutions, the Director of the Serious Fraud Office and the Director of Revenue and Customs Prosecutions (subsection (1)). A prosecution in Northern Ireland can only be brought with the consent of the Director of Public Prosecutions for Northern Ireland or the Director of the Serious Fraud Office (subsection (2)). The Director of the Serious Fraud Office may delegate his or her functions under this clause to an authorised member of staff (subsection (3)). Other delegation powers already exist for the other Directors.
55. Under subsection (6), consent must not be given for the institution of proceedings in respect of conduct which was specifically authorised in advance by the Secretary of State (or, in urgent cases, by a senior official). The Secretary of State, in giving an authorisation, must be satisfied that the conduct is necessary for one of the functions described in clause 13(1) relating to the intelligence services or armed forces (subsection (7)). An authorisation expires after 6 months and is renewable for a further 6 months if the Secretary of State considers it necessary for the authorisation to continue to have effect for the purpose for which it was given (subsections (8), (9) and (10). An authorisation may be renewed more than once (subsection (11)). An authorisation must be cancelled if the Secretary of State is satisfied that an act or omission authorised by it is no longer necessary for its original purpose (subsection (13)). These provisions do not impose a requirement for an authorisation to be granted in respect of conduct necessary for the proper exercise of the intelligence services or armed forces. So a defendant who carries out such conduct can still rely on the defence under clause 13 in the absence an authorisation.
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