Memorandum from Transparency International
(UK) (DCB 18)
1.1 The Appendix briefly introduces TI(UK).
2.1 The Home Office is to be congratulated
on bringing forward proposals for the comprehensive reform of
the law of corruption and on doing so by the draft Bill procedure.
Lord Falconer's Foreword to Cm5777 summarises the devastating
consequences of corruption and the need to ensure that UK citizens
do not contribute to this crime at home and abroad. He underlines
the vital part that the Bill will play in the multi-faceted strategy
at home and internationally and the recent major developments
in the international sphere.
2.2 Corruption has long been recognised
as unacceptable conduct in a domestic UK context. In the last
few years, the international dimension of corruption has moved
up the agenda. Widespread availability of bribes has fuelled failure
of States, conflict and terrorism. It also undermines business
confidence and stability throughout world markets and economic
development. The need for a consistent international response
to corruption has been recognised in the several international
anti-corruption conventions which are referred to below.
2.3 There is a clear national interest in
the UK adopting anti-corruption legislation which meets the objectives
of clear and comprehensible law enforcement and effective elimination
of corruption with any UK connection. The UK's leading role in
the fight against organised crime and international terrorism
contributes directly to the importance of the UK as a world marketplace:
not merely in financial services (vital as they are): but in many
specialist areas of trade (eg oil and construction). We must maintain
and be seen to maintain the highest standards of business integrity
in business and public sector so as to underpin global public
confidence in the UK's dominance in financial and trade markets.
2.4 The UK law on corruption is in urgent
need of reform to meet these expectations. On the domestic front,
the law enforcers have found the patchwork of century-old statutes
and common law to be an ineffective means of curbing corrupt practices.
Internationally, the UK has barely been able to abide by the obligations
to which we have subscribed in the OECD Anti-Bribery Convention.
It is therefore particularly important that the reformed UK legislation
is consistent with our national commitments, is comprehensible
to a wide audience and should work as effectively as possible
in a modern legal context, especially within the European Union.
2.5 TI(UK) considers that the current draft
legislation is not framed in a manner which meets these needs,
but is complex in its use of language and relies heavily on the
use of a principal/agent relationship which is unique to a common
law tradition and inconsistent with the way in which much corruption
now takes place. This approach makes it difficult for the Bill
to address effectively some forms of corruption in spite of its
2.6 In contrast, the need for easily comprehensible
anti-corruption legislation has led elsewhere to legislation which
breaks down corruption into various specific types of offence.
This approach guided the development of the Council of Europe's
Criminal and Civil Law Conventions on Corruption and has been
recognised in several of the new laws adopted in various countries
in the recent past. Its
chief advantage is that it enables investigating and prosecuting
authorities to be clear as to whether or not they are likely to
be effective in bringing specific cases to the courts.
2.7 TI(UK) takes the view that the Draft
Bill, although welcome and well-intentioned, fails for these reasons
to represent an acceptable reform of the law of corruption. These
points inform the following more specific responses to the principal
themes of the Committee's inquiry.
What is the background to the draft Bill and what
other options could have been pursued? What are the reasons for
any changes from the Law Commission's 1998 report and the 2000
3.1 The Home Office will no doubt deal with
the second of these questions. It is however clear that other
options could have been pursued. The Commission's proposals as
now embodied in the Draft Bill, driven by a desire to relate the
new offences exclusively to a concept of agency, an objective
to eliminate distinctions between private and public sector corruption
and to introduce a definition of acting corruptly, have resulted
in a Bill that is needlessly complex and entirely dependent on
legal interpretation for its understanding. So far as is known
to TI(UK), this approach follows no precedent elsewhere and will
stand isolated in the international scene.
3.2 Practice elsewhere would suggest that
corruption should be broken down into a series of readily identifiable
specific offences. This would render unnecessary the central cause
of the complexity of the Draft Bill which is the very broad definitions
of offences and terms creating a "catch-all" situation
that then depends on exceptions (Clauses 6 and 7) to cover normal
commercial activities with the risk that innocent conduct could
Whether proposed definitions are workable and
Whether they will be readily understood by police,
prosecutors, jurors, the public etc
3.3 It follows that in TI(UK)'s opinion,
the offences will not be readily understood by police, only with
difficulty by legally trained prosecutors and with even more difficulty
by jurors and the public. In every case, it would be necessary
to refer to several of the clauses in Part 1 of the Bill, leaving
uncertain as to who must show that an applicable exception is
3.4 The concept of agency, although well
developed in common law, has been stretched unreasonably in this
Bill. The concept of actors in the offence being agents for or
performing functions for "the public" is particularly
difficult. At least one of the definitions of "corruptly"
remain circuitous, in that it depends ultimately on knowing what
is meant by "corruptly".
3.5 To attempt to explain an offence as
defined in the Draft Bill to other jurisdictions, vital for the
effective operation of mutual legal assistance and necessitating
translation into other languages, would be formidable, resulting
in huge expense and abandonment of cases. The Draft Bill shows
little appreciation of conditions that apply internationally.
Whether specific offences should have been proposed
for specific situations?
3.6 Yes. On one reading, the broadness of
the language of the Bill offences potentially makes criminal the
payment by a citizen to any public official or agency even for
the provision of lawful services. On another view, the same language
would tolerate payments that would ordinarily be treated as reprehensible.
Clarity requires more specific offences to catch some common situations
and to meet the requirements of international conventions, particularly
the OECD and Council of Europe Conventions. The recently developed
draft legislation in the Republic of South Africa comes closer
to addressing these issues. TI(UK) commends the general approach
as helpful in addressing this theme.
The effect of not making the new offences retrospective
3.7 TI(UK) considers that the normal rule,
that criminal legislation is not made retrospective, is appropriate.
Corruption should be prosecuted under the applicable law at the
time it occurred. It is important therefore that Part 12 of the
Anti-terrorism, Crime and Security Act (AT12) remains fully effective
and actively enforced in regard to foreign bribery taking place
from 14 February 2002 until new legislation comes into force.
The effect of removing the presumption of corruption
3.8 The public expects that its servants
should be incorruptible. Nothing should be done that would ease
the pressure to maintain integrity standards. Corruption is necessarily
a covert offence, the seriousness of which may merit special measures.
Recent cases (notably R v Lambert  2 AC 545, HL and R v
Matthews, The Times, 28 April 2002, Court of Appeal) indicate
that putting an onus on a defendant to establish a statutory defence,
an evidential burden, is not incompatible with the European Convention
on Human Rights (ECHR). A redrafted "presumption" or
"inference" should not offend the ECHR and could prove
useful to prosecutors whilst not being unfair to defendants. There
may even be a case for extending such an inference to private
Whether the agent/principal analogy is still relevant,
in particular in the case of public acts?
3.9 There is little wrong with the analogy
of agent/principal as such, when used as part of specific corruption
offences. It exists in the Prevention of Corruption Act 1906.
Section 1 of that Act is readily understandable, although in need
of some modernisation. As used in the Draft Bill as the sole determinant
of the necessary relationship to establish every corruption offence,
its complexity is all too evident, particularly in the case of
functions "of a public nature".
The treatment of facilitation payments
3.10 Common law and UK legislation have
never distinguished "facilitation payments" from other
bribes and this applies through AT12 to foreign bribery. TI(UK)
supports the Government's position that it is unacceptable to
apply different standards abroad to those that apply within the
UK. Petty corruption remains unacceptable within the UK and the
Draft Bill rightly makes no express distinction. However the definition
of "corruptly" in clause 5 and the need to prove "belief"
that an act was done or an omission made "primarily"
in return for the advantage, raises uncertainties as to whether
some small facilitation payments may now be decriminalised. Similar
considerations arise under clause 10. The language needs to be
Should there be a public interest defence?
3.11 TI(UK) can see no justification for
a public interest defence in new corruption legislation. There
is no such defence in the existing law. Public interest appears
as a factor to be weighed in consideration of whether or not to
prosecute in the Crown Prosecutor's Code and this discretion itself
could be perceived as open to abuse. Clauses 15 and 16 (Authorisation
for intelligence agencies) are inappropriate in a new corruption
law and, if needed at all, should be included in a more general
Intelligence Services Act.
Whether the proposals are compatible with international
obligations and how they compare with equivalent law in other
3.12 The Bill is broadly consistent with
the OECD Convention, save possibly in relation to facilitation
payments (see para 3.10 above); although, unless the new legislation
follows the general approach adopted in this paper, there must
be some concern that the OECD Convention will be less effectively
implemented than by the current extension of existing law by AT12.
TI(UK) notes that the Bill does not expressly cover "trading
in influence", an offence specified in the Council of Europe
Criminal Law Convention. It is important that the new legislation
leaves beyond doubt the UK's ability to comply with its international
Omission from the draft Bill of misuse of public
office and trading in influence
3.13 Misuse or abuse of public office as
a separate offence committed by a public official or servant could
be a useful tool for upholding public integrity in cases where
to mount a full corruption prosecution would present insuperable
difficulties eg the corruptor is beyond the jurisdiction. With
regard to trading in influence, see para 3.12 above.
Waiver of parliamentary privilege in cases involving
peers and MPs
3.14 TI(UK) sees no justification for special
privilege for parliamentarians, who should be seen to be subject
to the general law of corruption.
Attorney-General's consent to prosecution
3.15 TI(UK) considers that there should
be no requirement for the AG's consent to prosecution of offences
to be created by the new legislation. It is claimed that the AG's
consent (clause 17) is required to counter the risk that the right
of private prosecutions will be abused and the institution of
proceedings will cause the defendant irreparable harm. Evidence
of such risk is lacking. There is no corresponding requirement
for the comparable offence of fraud. The prosecuting authorities
are understood to have effective ways of preventing such abuse.
Civil proceedings, which seem much more likely in asserting private
interests, could be equally damaging and are not restrained by
the AG's consent. No such consent has ever been required in respect
of the prosecution of common law offences. "Politicisation"
of prosecutions would be retrograde.
3.16 The Law Commission recommended (para
7.26 of their Report) that the consent of a law officer should
not apply. Article 5 of the OECD Convention requires that the
investigation of the bribery of a foreign public official should
not be influenced by considerations of national economic interest,
the potential effect upon relations with another state or the
identity of the natural or legal persons involved. The AG's consent
requirement has been commented upon adversely by the OECD Working
Group on Bribery; and, in their most recent report,
it remains an issue for follow-up. However strictly the AG may
exercise powers in accordance with the Code for Crown Prosecutors,
there will remain a perception that, as a member of the Government,
he could be influenced by considerations of the type excluded
by Article 5 of the Convention.
Relationship with Registration of Interests, Codes
of Conduct and Electoral Commission requirements on political
3.17 Each of these subjects raises concerns
around corruption, but is capable of being dealt with and is customarily
dealt with by voluntary arrangements or in other more specialised
legislation. TI(UK) is not offering views in this submission.
It will be willing to make a further submission on any of these
subjects if that would assist the Committee.
4.1 It follows from the above, that
4.1.1 New legislation should incorporate
a comprehensive set of specific corruption offences, including
trading in influence;
4.1.2 The offences should be defined so
as not to require proof of dishonest intent, but on the basis
of payment or other gratification without reasonable explanation,
ie an inference of corrupt behaviour compatible with the ECHR;
4.1.3 The requirement for the Attorney-General's
consent to a prosecution of corruption offences should be omitted.
4.2 Unincorporated associations and partnerships
(according to English and Scottish definitions) should be included
as bodies capable of committing corruption offences.
4.3 Clause 13 (Corruption outside the UK)
should extend to include subsidiary companies of those incorporated
in the UK if under actual control (according to an appropriate
definition); in the case of other subsidiaries, associated companies
and joint ventures, there should be an offence by the UK incorporated
company if it fails to take adequate measures to satisfy itself
that the foreign registered company or joint venture is implementing
suitable anti-corruption policies in the conduct of its business.
4.4 To strengthen investigation and prosecution
powers in the difficult area of serious corruption offences (frequently
involving cross-border transactions), the jurisdiction of the
Serious Fraud Office under the Criminal Justice Act 1987 should
be expressly extended to include serious and complex corruption,
money laundering and other financial and economic crimes.
4.5 The discretion of revenue departments
to disclose information for the purposes of criminal proceedings
now contained in section 19 of the Anti-terrorism, Crime and Security
Act 2001, should become mandatory.
4.6 TI(UK)'s proposals for a substantial
recasting of the Draft Bill need not result in delay. Clear laws
against corruption are urgently required for business. If the
Committee recommends redrafting along the lines proposed by TI(UK)
and stresses the urgency of so-doing in the next parliamentary
session, parliamentary draftsmen will be able to produce a revised
draft in good time.
4.7 TI(UK) will be happy to produce such
further paper or papers as may be helpful to the Committee to
develop any of the proposals summarised above or as may be indicated
during the course of the oral hearing on 13 May 2003.
Transparency International (TI) has been at
the forefront of the anti-corruption movement since it was formed
in 1993. TI is a not-for-profit, independent, non-governmental
organisation, dedicated to increasing government accountability
and curbing both international and national corruption. It seeks
to work in a non-confrontational way with governments, companies,
development agencies, NGOs and international organisations to
build coalitions to combat corruption.
TI's international secretariat is based in Berlin
and there are about 90 national chapters around the world. TI(UK)
is the national chapter for the UK and was among the first to
be formed, also in 1993. (www.transparency.org)
1 OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions (1997). Back
Such as Malaysia, Nigeria and draft proposals in the Republic
of South Africa. Back
Phase I Bis Report. Back