Joint Committee on The Draft Corruption Bill Written Evidence


APPENDIX 19

Further Memorandum from Transparency International (UK) (DCB 31)

PURPOSES OF SECOND MEMORANDUM

  1.1  This memorandum responds to areas of interest mentioned during the hearing on 13 May 2003 and to points raised in written submissions and subsequent hearings. TI(UK)'s principal memorandum is designated "DCB 18". Points made in DCB 18 remain valid and this memorandum may be read with DCB 18.

TI(UK)'S PRINCIPAL CONCERNS

  2.1  The Draft Bill lacks clarity, in several clauses to the point of being unintelligible to those by whom it most needs to be understood—the public, business and non-specialist police and prosecutor. It will therefore be ineffective.

  2.2  The lack of clarity derives not from any essential complexity in the offence of corruption itself, but from

  2.2.1  the style of "codification" that prefers brevity to comprehension;

  2.2.2  placing a strained and artificial interpretation on the concept of agency;

  2.2.3  the only partly successful attempt to eliminate the distinction between corruption in the public and private sectors.

  2.3  The Draft Bill pays insufficient attention to the overriding need for its application in an international setting.

  2.4  Just when the world is waking up to the scourge of corruption, it is unthinkable that the UK should for the first time (a) permit small facilitation payments in the UK and (b) strengthen the perception of political interference through the requirement for Attorney-General's consent to prosecute any corruption offence.

PREFERRED STRUCTURE OF CORRUPTION BILL

  3.1  Above all the Bill requires clarity and effectiveness. This is not likely to be achieved either by a long list of specific offences each designed to catch a particular type of corruption; nor by a very small number of very broadly expressed offences resulting in complex and obscure language with potentially bizarre consequences.

  3.2  It is feasible to combine two or three general offences of corruption (corresponding to active, passive and "normal agency" offences) with a small number of specific offences, suited to likely corruption scenarios in the UK and drafted to take account of existing legislation. Both the general and specific offences would be intelligible and prosecutors would be free to use whichever offence most closely fits the facts. Please see para 4.2 below referring to the Council of Europe Convention, the text of which is admirably clear.

  3.3  A balance needs to be struck to avoid the complexities that derive from having too few or too many offences. Legislative brevity is only commendable if the result is equally clear and effective. The balanced structure outlined in para 3.2 would codify the existing criminal law, accord with international obligations and be of reasonable length. The Government has suggested that in some way the Law Commission's proposals for the reform of the law of fraud (Law Com No 276) constitute a precedent for codifying the law of corruption. There is no commitment to legislate for fraud in the manner set out in that paper, which cannot therefore be regarded as a precedent for the Corruption Bill. However desirable a wholesale codification of criminal law may be, attempts to date have been undertaken in a piecemeal manner.

  3.4  The Republic of South Africa is currently engaged in a similar exercise to the UK and has produced several editions of draft legislation. Working Document No.4 (January 2003) is being made available to the Committee. TI(UK) commends its structure as meriting consideration; a single definition clause, three general offences and a number of specific offences. There is no need for elaborate defences and exemptions, because the mischief at which each offence is targeted is clear to any reasonably intelligent reader. The content and drafting of the South African Bill are still evolving (see the six options for the definition of "corruptly").

  3.5  Recent legislation in Kenya (Part V) and Malaysia (Parts I and III) has adopted a similar coherent structure—which is also being made available to the Committee.

APPLICATION OF CORRUPTION LEGISLATION IN AN INTERNATIONAL CONTEXT

  4.1  The fundamental importance of the international dimension in considering UK anti-corruption legislation could hardly be clearer than in the then Home Secretary's foreword to the White Paper of June 2000, as also in Lord Falconer's foreword to the Draft Legislation paper (Cm 5777). Yet the Draft Bill fails to meet international requirements—see paras 2.2 through 2.7 of DCB 18. The Law Commission consultation paper No 145 barely mentions these, perhaps because international developments had hardly started. But the failure to mention them in Lord Falconer's recent submission to the Committee (DCB 27) and in Mr Justice Silber's submissions (DCB 22 and 30) (the author of the Law Commission's report) is inexplicable. The Bill as presently drafted substantially ignores the developments through the OECD Convention 1997, the Council of Europe (CoE) Convention 1999 and the draft UN Convention.

  4.2  The CoE Convention aims to secure, to the extent possible, a uniform application of the Convention by the Contracting Parties. The Convention requires general offences of active and passive bribery (distinguishing between public and private sectors) and specific offences relating to foreign officials and assemblies, clear references to international organisations and courts, trading in influence etc. This implies a structure along the lines of para 3.2 above.

  4.3  The Committee sought some examples of how other states have dealt with corruption issues in their codes. Annexes 1,2 and 3 indicate how South Africa, Kenya and Malaysia (common law countries) have dealt or are dealing with their corruption laws. Annex. 4[52] summarises how 10 states have implemented the OECD Convention (see para 6.1 below) by inserting the offence of bribing foreign public officials into existing codes (see Poland in particular). Annex 5 is a translated extract from the Spanish Penal Code 1995, concentrating almost exclusively on public authorities and officials.

  4.4  Each of these bills, statutes and codes accords with the legislative tradition of the relevant country. Even in translation, the nature and intent of each offence is clear. It poses no intellectual challenge, in marked contrast to the UK Bill. The "foreign extension" in Part 12 of the Anti-terrorism, Crime and Security Act 2001 (AT12) at least accords with the UK tradition and is tolerably clear, but needs updating.

  4.5  The comity that should exist between States combating the international crime of corruption respecting no borders, dictates that law reform should follow a modern and internationally recognisable and intelligible style, particularly in the light of the UK's leading role in international trade and finance. Instead of showing how this movement can be enhanced, the Bill looks backwards in a nationalistic manner, out of sympathy with other States, creating even greater difficulties for those responsible for investigating and prosecuting cross-border crime. The aim should be to create useful tools in the fight against corruption.

  4.6  The Government seems ready to exclude "bribery" between principals to rig bids on the basis that this may be caught by anti-competition law. However, in many of the countries where corruption is widespread and the rule of law barely exists, there will be no effective anti-competition laws, so foreign bid rigging will escape. Is this really what the UK Government should be encouraging?

SPECIFIC OFFENCES IN THE PREFERRED STRUCTURE

  5.1  In addition to the three general offences of corruption (corresponding to active, passive and "normal agency" offences) referred to in para 3.2 above, a small number of specific offences could include:

  5.1.1  Bribery of foreign public officials (see paras 6.1 and 6.2 below);

  5.1.2  Bid rigging/procuring withdrawal of tenders (apparently not caught by the Bill);

  5.1.3  Corruption in relation to sporting events;

  5.1.4  Trading in influence;

  5.1.5  Abuse of office;

  5.1.6  Duty to report corrupt transactions.

  5.2  TI(UK) does not advocate the multiplicity of offences or the reinstatement of the common law offence, as proposed in the draft South African legislation.

BRIBERY OF FOREIGN PUBLIC OFFICIALS

  6.1  TI(UK) proposes this as a specific offence (para 5.1.1 above), which is essential if there is to be effective legal and practical implementation of the 1997 OECD Anti-bribery Convention. The Committee wanted to know how other States had incorporated this offence into their laws. Annex 4 shows 10 examples; in all cases, a specific offence has been included.

  6.2  The Bill proposes to be uniquely different and to apply the obscure domestic bribery offence by "side wind" references in Clauses 6(6) and 11(2) and (4). The offence would be too complex to give certainty that particular conduct would offend or that each category of official listed in the OECD Convention would be covered. [53]

  6.3  The offence of corruption outside the UK should operate so that UK companies are liable for corruption by their foreign subsidiaries (see para 4.3 of DCB 18).

PUBLIC/PRIVATE DISTINCTION

  7.1  The attraction of eliminating the distinction between offences in the public and private sectors has proved illusory. It is also out of step with existing and proposed international conventions and the laws in most other States. Although the dividing line between public and private functions changes, there exist important distinctions which require policing.

SMALL FACILITATION PAYMENTS

  8.1  Lord Falconer's comments to the Committee on 6 June suggest that TI(UK)'s apprehension about toleration of facilitation payments was justified (see para 3.10 of DCB 18). Facilitation payments may for the first time in the UK not constitute a criminal offence. This is an astonishing and retrograde development. It contradicts the statements of Trade Partners UK: "We do not tolerate "facilitation payments' to UK officials." and "We do not think it desirable for UK law to apply differently overseas to the way it applies in the UK." Based on AT12, several important UK based companies have already adopted a policy of "zero tolerance".

ATTORNEY-GENERAL'S CONSENT TO PROSECUTION

  9.1  TI(UK) reiterates the views expressed in paras 3.15 and 3.16 of DCB 18. Mr Justice Silber's willingness to depart from the recommendation of the Law Commission in this respect is most surprising even ignoring the concerns of the OECD arising under the Convention. It is surely illogical for the Government to oppose the 1916 Act presumption on the grounds that it is not thought to be necessary in fraud cases and yet insist on retaining the Attorney General's consent for corruption when that is not found to be necessary for fraud. Allegations of fraud, carelessly or maliciously made, could be equally damaging. There can be no justification for this pointless hurdle if discretion will in any event be exercised according to the Code for prosecutors.

CONCLUDING REMARKS

  10.1  TI(UK) expresses its appreciation to the Committee for the opportunity to make written and oral submissions in respect of the Bill which is central to its purpose and for the courtesy and interest shown in the points made. TI(UK) is willing to offer whatever further assistance might be considered useful. TI(UK) is committed to there being a clear, modern and internationally useful anti-corruption code in the UK.

June 2003





52   Note OECD Secretariat qualifications. The selection of different legislative extracts does not purport to be comprehensive. Back

53   The difficulties for those applying for mutual legal assistance and extradition cannot be too strongly emphasised. The UK would become less effective and even non-compliant with the OECD Convention in contrast with the present AT12 arrangements. Back


 
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