Joint Committee on The Draft Corruption Bill Written Evidence


APPENDIX 20

Comments of the OECD Secretariat on the new UK Draft Corruption Legislation (DCB 26)

PART 1. INTRODUCTION

  This note contains the preliminary observations of the OECD Secretariat on the new UK Corruption Bill, published on 24 March 2003, on which the Home Office has invited comments by the end of July 2003.

  These informal observations are intended to contribute to the process of refining and developing the drafting of the Bill before it is placed before Parliament. Part 2 of the note gives a brief overview of the extent to which the present language of the Bill reflects the requirements of the Convention, and identifies major areas of concern. Part 3 focuses on specific areas where, in the Secretariat's view, the drafting could be improved in order to better achieve the Convention's objectives.

  If it appears that substantial changes will be made to the Bill either as the result of the Home Office consultation process or as a result of scrutiny by the Joint Parliamentary Committee, the Secretariat would welcome a further opportunity to present observations.

  The Phase 1bis Report and recommendations of the OECD Working Group on Bribery, based on the existing state of the law in the UK, remain in effect.

PART 2. TO WHAT EXTENT DOES THE LANGUAGE OF THE BILL REFLECT THE REQUIREMENTS OF THE CONVENTION?

 (a)   Generally

  The Working Group has encouraged the UK to enact a new, comprehensive anti-corruption statute in an effort to reform and simplify its confusing patchwork of laws. The Corruption Bill aims at a radical simplification of UK corruption law and the removal of inconsistent and overlapping provisions. It would abolish the common law offence and the various statutory offences of bribery, and replace them with broad new offences of corruptly conferring an advantage (corresponding to active corruption), corruptly obtaining an advantage (passive corruption), and performing functions corruptly. The offence of corruptly conferring an advantage encompasses all types of active bribery: there is no attempt to create a specific new offence of bribing a foreign public official. The offence is defined in terms of corrupting the agent of a principal (in other words, the offence is understood in terms of a potential breach of a relationship of trust). The Bill makes no distinction between "public" and "private" bribery, except that the exception of "principal's consent" is not applicable in the case of bribery of a public agent. Nor does it distinguish between "domestic" bribery and "foreign" bribery.

  The intention of the UK legislative drafters seems to have been to construct an offence that is as broad as possible. This approach is certainly coherent, but it does not make for legislation which is clear and readily understandable to those charged with enforcing it. Whereas the existing law suffers from a plethora of definitions which are partial, antiquated and sometimes overlapping in their detail, this Bill goes to the other extreme of having virtually no detail at all. The high-level, abstract language used is difficult to translate into concrete terms. This is especially so with regard to the key definition of "corruptly", which seeks to define the mental element of the offence by reference to exceptions which are themselves unclear (see below).

  Furthermore, this approach means that the specific language of the Convention (for example, the definition of a foreign public official) is not reflected. The Bill contains no express language about foreign official bribery, or about any other typical bribery offence. Its effectiveness as an instrument for enforcing the Convention must therefore depend to a very great extent on the familiarity of those enforcing the new law with the foreign bribery offence as defined in the Convention itself. The enforcement authorities will need to be thoroughly familiar with the language of the Convention and the specific kinds of conduct it addresses. It cannot be acceptable for the primary legislative instrument implementing the Convention in the UK to need to rely so heavily from the outset on secondary sources of interpretation and reinforcement. It will be necessary, at a minimum, for the government to make a clear statement during the Parliamentary debate on the Bill that one of its underlying objectives is to ensure the full implementation of the Convention, and to put in place a major training effort in parallel with the adoption of the legislation.

  The question whether legislation in this form can, in practice, fully achieve the objectives of the Convention must await the Phase 2 review. In the view of the Secretariat, it is unlikely that these objectives can be best served by a statute that is so broadly-drafted and theoretical.

 (b)   The elements of the offence under Article 1 of the Convention

Intentionally

  The requirement of corrupt intention is present, in principle. Under Clause 5, the offender must intend the agent to do or omit something, and believe that the act will be done primarily in return for the conferring of the advantage; alternatively, if the act has already been done or the omission taken place, the offender must know or believe that this was done primarily in order to secure the conferring of the advantage.

  The lack of a single, clear definition of what is meant by "corrupt" is regarded as a major flaw in the present UK law. Contrary to what is stated in the foreword, this Bill fails to supply one. As to what is meant by "corruptly", Clause 5 provides:

  (1)  A person (C) who confers an advantage, or offers or agrees to confer an advantage, does so corruptly if:

    (a)  he intends a person (A) to do an act or make an omission in performing functions as an agent of another person (B) or as an agent for the public;

    (b)  he believes that if A did the act or made the omission it would be primarily in return for the conferring of the advantage (or the advantage when conferred), whoever obtains it;

    (c)  the exception provided by section 6 does not apply;

    (d)  the exception provided by section 7 does not apply.

    [  ]

  Thus, any conferring, etc. of an advantage done with the intent in (a) and the belief in (b) will be corrupt according to this definition, unless it falls within one of the exceptions. As a definition of the core mens rea element of the offence, this is obscure, circular and unsatisfactory. It would be preferable to devise an affirmative definition of "corrupt" or "corruptly" using language drawn from existing common law, cases and statutes, or by using the word "undue" as it is used in the Convention.

Offer, promise or give

  The offence as defined in Clause 1 may be committed if the offender either "confers", "offers" or "agrees to confer" an advantage, provided this is done corruptly. "Confer" means to give; an agreement to confer is a promise. All three elements are covered. The word "confer" carries no implicit reference to the state of mind of the proposed recipient, and is no more limited than "give".

Any undue pecuniary or other advantage

  The offence refers only to "an advantage", without any limitation as to what form it might take. There is no language conveying the meaning of "undue", apart from the requirement that the advantage be conferred "corruptly". The present draft language is broader than is required by the Convention and would not, in this respect, require proof of additional elements.

  Clause 4(1) as presently drafted gives rise to one potential ambiguity as to the definition of "advantage".

  Subsection (a) defines conferring an advantage as a situation where the offender "does something (for example, makes a payment) or he omits to do something which he has a right or duty to do". It is not immediately clear from the language or punctuation whether the subordinate clause "which he has a right or duty to do" qualifies "does something" or only "omits to do something". Logically, it can only be the latter. It is clear from the context that this was the intention. The commentary on this part of subsection (a) explains that the idea of conferring an advantage by actively doing something "covers any act". The commentary goes on to explain that conferring an advantage can also cover "omissions to act, but only where the person omitting the act has the right to do so (for example, he omits to enforce a debt owing to him) or a duty to do so (for example, he omits to enforce a debt owing to his employer that he has a duty to enforce by virtue of his employment)". The commentary thus confirms the underlying intention. The ambiguity on the face of the language should be clarified.

Whether directly or through intermediaries

  There is no express language concerning the use of intermediaries. The issue was addressed during the Phase 1 and 1bis reviews, as the Prevention of Corruption Act 1906 likewise contained no express language on intermediaries. It was explained by the UK authorities, and accepted by the Working Group, that, based on general principles of criminal liability under English law as to principals and secondary parties, provided the intermediary is acting in concert with the briber and not merely for his own purposes, the briber will be liable as principal perpetrator of the offence. The same would be true of the new corruption offence.

To a foreign public official

  The Bill does not contain an autonomous definition of "public official", either domestic or foreign. Instead, under Clause 11 (3): "A person is an agent performing functions for the public if the functions he performs are of a public nature." According to Clause 11(4), this will apply "even if the person has no connection with the United Kingdom, and `public' is not confined to the public of the United Kingdom or of any part of it."

  As acknowledged in the Phase 1bis Report (at p. 9), the UK has chosen to adopt a broad test of "functions . . . of a public nature" in recent legislation, including the Human Rights Act 1998. The Law Commission, which previously favoured enumerating specific categories of public functions in a list, has given its endorsement to this approach. The intention, as the UK authorities emphasised throughout the Phase 1bis review, is to make the definition as inclusive as possible. The commentary to Clause 11 of the Bill explains: "The definition is based on the nature of the functions as opposed to the body concerned, thus ensuring a wide coverage reflecting better the current situation in which the boundaries between the public and private sector are increasingly fluid."

  The Working Group in Phase 1bis, faced with the question whether the existing definitions of "public office" and "public authorities" covered members of a foreign legislature, persons exercising a public function for a public enterprise, and officials or agents of a public international organisation, decided to review the matter in Phase 2.

  During the House of Lords debate on the use of the term "public body" in the draft of Part 12 of the Anti-Terrorism, Crime and Security Act 2001, the Attorney General gave a clear statement that the government was satisfied that that Bill had been drafted so as to cover "all the categories of public official that the OECD convention requires to be covered." A similar assurance of legislative intention with regard to the present text would be valuable—or even necessary, given the need to clarify what the language means.

For that official or for a third party

  The lack of clarity under the existing law was a matter of concern in the Phase 1bis review. The recommendations said (at p. 18): "It should also be made clear under the new statute that the offence of foreign bribery may be committed for the benefit of a third party, as provided in Article 1(1) of the Convention."

  There is no express language about third parties in the new draft legislation. However, under Clause 4 (1)(b), an advantage will be conferred if the act or omission is done "with the result (direct or indirect) that another benefits." This language appears broad enough to encompass a situation where a bribe is paid to one party for the benefit of another.

  Similarly, part of the definition of "corruptly" in Clause 5(1)(b) is that the offender believes that if the [official] did the act or made the omission "it would be primarily in return for the conferring of the advantage . . .…whoever obtains it."

  The commentary states that the result is that "the person obtaining the advantage need not necessarily be the agent whose conduct it is sought to influence or reward. This approach ensures that behaviour where an agent has an interest in a third party (such as the agent's spouse) receiving a benefit will be covered. It is not necessary for the advantage to be of direct benefit to the person upon whom it is conferred."

In order that the official act or refrain from acting

  This requirement of the Convention is clearly covered by the language of the Bill.

  Under Clause 5(1), a person who confers, or offers or agrees to confer an advantage, does so corruptly if "(a) he intends a person (A) to do an act or make an omission . . . (b) he believes that if A did the act or made the omission it would be primarily in return for the conferring of the advantage . . ."

In relation to the performance of official duties

  The requirement in Clause 5(1)(a) is that the offender must intend "a person (A) to do an act or make an omission in performing functions as an agent of another person (B) or as an agent for the public". The phrase "in performing functions . . . as an agent for the public" is narrower than "in relation to the performance of official duties". While it is broad enough to cover acts which are not in breach of duty, it would not, for example, appear to cover acts done outside the agent's "authorised competence".

  This raises a problem which does not arise under the existing law, at least with regard to the Prevention of Corruption Act 1906, section 1(1) of which refers to "any act in relation to [the agent's] principal's affairs or business".

In order to obtain or retain business or other improper advantage in the conduct of international business

  There is no language in the new Bill which would limit the context or purpose of the advantage sought. It would be possible to interpret the offences under the Bill to cover all these elements; the practice on this point could be examined in Phase 2.

Exceptions

  Of the two exceptions in the Bill, only that in Clause 6 seems, in part, to be relevant to the active bribery of a foreign public official. Clause 6 provides:

  (1)  The exception provided by this section applies if any of the following three conditions is satisfied.

  (2)  The first condition is that:

    (a) the functions concerned are performed only for a principal (B) and not for the public;

    (b) C is acting on behalf of B.

  (3)  The second condition is that:

    (a) the functions concerned are performed only for the public and not for a principal;

    (b) C is acting on behalf of the public.

  (4)  The third condition is that:

    (a) some of the functions concerned are performed for a principal (B) and others are performed for the public, or a given function is performed for a principal (B) and the public;

    (b) each element of the advantage is conferred (or to be conferred) by C acting on behalf of B or of the public (or of both).

  (5)  The functions concerned are the functions referred to in sections 5(1)(a) or (2)(a).

  (6)  References to the public are not confined to the public of the United Kingdom or of any part of it.

  This language of Clause 6 is opaque and would be difficult to apply to a concrete set of facts. Given that the key mental element ("corruptly") is defined in a somewhat circular manner by reference to the absence of any of these exceptions, this amounts to a serious flaw. As to the bribery of a foreign public official, the only one of the three "conditions" which could be relevant seems to be the second: if the person conferring the advantage is acting on behalf of the public, no offence is committed. It is not clear what the position would be, for example, if a senior executive in a partly state-owned utility company bribed a foreign public official. The commentary is unhelpful here in explaining exactly what the drafters intended to exclude from the scope of the offence. Nor is it clear which party bears the burden of proof of an exception.

  The second exception, under Clause 7 - that there is no corruption if the agent acts with the principal's consent - does not apply if the functions concerned are performed for the public, and thus would not arise in the case of bribery of a foreign public official.

  The Secretariat would urge the UK authorities to re-examine this aspect of the draft legislation In the light of the comments made earlier about "corruptly".

  There is no express exception for conduct which is lawful under local law, or for facilitation payments.

 (c)   Other features relevant for the Convention

Parliamentary privilege

  Under Clause 12, Parliamentary privilege (which operated to prevent the calling in evidence of anything said in Parliament) is not available in respect of any "corruption offence".

Offences committed abroad

  As to corruption committed outside the UK, Clause 13 provides that an offence is committed if a national of the United Kingdom or a body incorporated under the law of any part of the United Kingdom does or omits to do anything in a country or territory outside the United Kingdom which would constitute a corruption offence if done in England or Wales or Northern Ireland. Proceedings may be brought in England or Wales or Northern Ireland.

Attorney Genera's consent

  The requirement for the consent of the Attorney General to start proceedings for a corruption offence is preserved in Clause 17 of the Bill. Therefore, this remains an issue to be followed up by the Working Group in Phase 2. [54]

Penalties

  Under Clause 18 of the Bill, penalties remain unchanged (up to seven years' imprisonment and/or a fine on indictment; up to six months' imprisonment and/or up to the statutory maximum fine on summary conviction). No distinction is made between domestic or foreign bribery.

Territorial scope

  The Bill when enacted will not apply to Scotland, where separate legislation will have to be enacted. In Phase 1bis, the Working Group invited the UK to report on the progress of Scottish legislation designed to mirror Part 12 of the Anti-Terrorism, Crime and Security Act (which will now presumably lapse) and reserved the right to review the Scottish legislation, once enacted, if it considered it necessary. The same approach might be adopted with regard to any new Scottish corruption legislation.

  The Working Group's invitation to the UK to keep it regularly informed of the progress of legislation implementing the Convention in Crown Dependencies and Overseas Territories is unaffected by the new Bill.

Other obligations

  Provided the notion of "corruptly" can be more satisfactorily defined, so that the scope of the offence is clear, the new Bill would seem to have no adverse impact, and raise no issues, as to the UK's performance of its other obligations under the Convention with regard to sanctions, jurisdiction, periods of limitation, money laundering, accounting, mutual legal assistance, extradition or tax deductibility.

PART 3. SPECIFIC DRAFTING ISSUES

  This part of the note seeks to highlight some additional issues which could be resolved without upsetting the logical structure and balance of the Bill, bearing in mind its much broader domestic aims and scope. The Home Office is asked to take the following specific points into account in further work on the Bill:

  1.  Clause 4(1)(a)—The language of this clause is ambiguous. It needs to be made clear, by   punctuation or otherwise, that the subordinate clause "which he has a right or duty to do" applies   only to an omission and not to an act.

  2.  Clause 5—A serious effort should be made to devise a more easily understandable definition of "corruptly" than the present one. Ideally, this key definition should be worded in affirmative   terms and might be based, for example, on existing common law or statutory language and include the word "undue" as used in the Cnvention.

3.  Clause 5(1)(a)—The UK authorities should consider substituting "in relation to the performance of functions" for "in performing functions" in order not to restrict the scope of the offence as required by Article 1.1 of the Convention. The language should not exclude, for example, acts done outside the public agent's "authorised competence".

  4.  Clause 6(3)—If a definition by reference to exceptions is to be retained, a clearer explanation is needed of exactly what it is intended to exclude from the scope of the offence, so that this is more easily understandable to the enforcement authorities. It should be stated which party bears the burden of proving an exception.

  5.  In the absence of an autonomous definition of "foreign public official" in Clause 11, the UK   authorities are requested to give an assurance, as was done by the Attorney General in the context of the Anti-Terrorism, Crime and Security Act 2001, that this Bill is intended to cover "all the categories of public official that the OECD Convention requires to be covered".




54   The Phase 1bis Report states (at p. 18): "The Working Group proposes to examine, as part of the Phase 2 evaluation, whether the Law Officer's consent requirement may be an obstacle to effective implementation of the Convention and whether the UK is in a position, within the exercise of prosecutorial discretion, to fully respect Article 5 of the Convention."
 
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