Examination of Witness (Questions 360-379)|
2 JUNE 2003
Q360 Lord Carlisle of Bucklow: Not
"dishonest" but "undue"?
Professor Pieth: "Undue"
and your own law used "undue" at the time of the common
law offences. You have it in your own legal practice. I could
find it in the document, in phase 1 bis report. It mentioned under
common law a reference to undue advantage or something similar.
Q361 Lord Carlisle of Bucklow: Do
the words "undue advantage" have any conception in quantitative
terms as well as qualitative terms? Is there meant to be implied
a fairly substantial advantage in the word "undue" or
is it merely that it is not an advantage to which the person is
due and it is of the most minimal nature?
Professor Pieth: Not at all. It
does not give you permission to have facilitation payments as
such. Some countries, I understand, have such exceptions for small
Q362 Lord Carlisle of Bucklow: They
have separate exceptions?
Professor Pieth: Yes, separate
exceptions, and they are very explicit. They have to be specific.
We insist on the word "small". We talk about £200.
As soon as you are above £1,000, we believe you have to run
Q363 Mr Garnier: To come back to
the question of undue advantage or payment, it is relatively easy
to work out what is an undue advantage or payment in the United
Kingdom, Switzerland, Germany or France. What happens where the
activity might lead to an accusation of undue influence or advantage
in a northern European country but which, under the culture or
law of the country in which the foreign officials live and work,
would not be considered to be undue influence?
Professor Pieth: There is an exception
in the Convention which says, if behaviour is permitted by written
law, you are allowed to do that. If there is a law under the common
law system that amounts to an equivalent to written law, which
means you have to have firm prejudice and all the requirements,
it is not just that you have a habit. It is more than that. It
is an accepted habit. Then you would be able to have an exception
but those are very rare cases. We are talking about corruption
that is almost always not permitted worldwide, except that it
is not usually prosecuted. That is the reason why countries in
the north are trying to pick up those cases from here.
Q364 Mr Garnier: I can understand
it is in our interests to wipe out corruption and bribery and
improper conduct throughout the world economy but are we going
to be accused of imposing upon countries where it may be said,
"This is the way you do business. We all do it. You cannot
do business unless you do this" our standards which may not
be the ones which they wish to have imposed upon them?
Professor Pieth: I can see the
position that you are referring to but in the ten years I have
been working on this topic, in this role, I have increasingly
come to the pointand I am just back from an intergovernmental
conference in Seoul yesterdaywhere again it was reiterated
from the perspective of the south that we do not have a culture
of corruption and we do not want to condone corruption. It is
your job to try to help stop it. We might have fringe issues,
difficult, grey zones where we are talking about extortion; but
by saying "extortion" I am talking about duress, if
at gunpoint you were asked to do something. If it is merely that
you will not do business, the rules of the game are changing.
There is no exception that we would accept for so-called solicitation
because we do not give it to the French or the US so why should
we give it to you?
Q365 Mr Stinchcombe: Under English
criminal law, as I understand it, most crimes have three elements.
They have the mens rea, the mental element in the mind,
the actus reus, the physical act, and then the absence
of a defence. If the actus reus in your analysis was the
giving of an undue advantage, I wonder what the guilty mind element
should be to conform with the OECD Treaty in particular where
it might be something like the making of a payment with the intention
wrongly to influence someone either to do or not to do something.
Professor Pieth: I would be shorter.
It is enough to have the knowledge of what you are doing. You
do not need the "wrongly" from our side because that
is already contained in the objective side. If you know that it
is undue, it is by definition wrong. You are aware of the wrongness
of it; you do not need to say "wrongly". If you have
"wrongly" in it, we would ask, "Are you adding
a further qualifier here?" For the objective element you
have to have a qualifier of "undue" in some way or you
can do it by exception.
Q366 Mr Stinchcombe: Your definition
would be something like "knowingly to confer an undue advantage"?
Professor Pieth: Yes. You can
look at Canadian or Australian laws and you will find exactly
that kind of concept. I am a bit hesitant because, if that were
an excuse to wait another two years to legislate because you have
to redraft everything, I would feel more comfortable if you ran
your legislation the way it goes, even though we would have difficulties
as continentals in understanding it; but that you be explicit
on the transnational bribery element of a foreign, public official.
If you want, I can give you a very brief idea of what are the
other points that I am really at odds with.
Chairman: Perhaps the Baroness could
put her question and then we will come on to that.
Q367 Baroness Whitaker: It is a question
about this foreign, public official business and it concerns where
there will be a need for mutual legal assistance. With your knowledge
of other legal systems, can you tell us if it would be possible,
on the text of this Bill, to demonstrate to a foreign investigating
agency or a judge what our offences are and what the exceptions
are? Could they be translated into Polish, for instance, or Moldovan?
Professor Pieth: They could in
the same way as they could be translated to your jurors but it
would take quite a bit of effort to do so and you would raise
a lot of issues that would leave your opposite number puzzled.
You would open the way for defence counsel to say, "Excuse
me. We will go back on a certain term to the old situation in
1906." That is where the OECD comes in and says, "You
will have a very difficult job to prove beyond a reasonable doubt
to us that you have really covered the Convention." The situation
is that the balance of proof is with the country in this process.
Q368 Baroness Whitaker: It might
not work in the international, legal setting?
Professor Pieth: It might not.
Q369 Lord Campbell-Savours: Did I
hear you correctly? Did you say, "You are protecting your
Professor Pieth: This is a mere
hypothesis. I am certainly not accusing you.
Q370 Lord Campbell-Savours: What
did you mean by that?
Professor Pieth: It is an absolute
hypothesis. I wanted to raise that point when coming to the question
of consent by the high ranking law officer. That is a point which
puzzles us a lot. So far, we have been giving you time to reconsider
it but we have a clause saying there is, under no circumstances,
the possibility to withdraw action on a case for economic, political
or whatever reason. We are saying to ourselves, "The Crown
Prosecution Service knows why they go ahead and they have their
rules. Why would they need an additional political officer to
tell them when to stop a case?" What creeps into the discourse
is a very uneasy feeling that there is a possibility which is
dangerous and we would have difficulties saying, "This meets
the requirements of Article 5 of the Convention." We would
suggest trying hard to abolish the consent. I am aware that you
have a problem and that you might want to attach the consent to
the prosecution of an MP. We would have no problems there. If
you attach it to every case here, we would feel anxiety.
Q371 Chairman: Are you saying that
this Bill should make it absolutely explicit that it covered all
attempts to bribe foreign officials in the way that the OECD Convention
appears to do? Is that one of the criticisms? Not only does it
not mention public officials; it does not lead to the conclusion
that it would cover any bribery of a foreign official. Ought that
to be explicit?
Professor Pieth: Obviously this
would be the easiest solution for us, if you had one, short clause
picking up the Convention language. We read with interest what
Australia and Canada have done.
Q372 Chairman: From your point of
view, would it be sufficient if the government stated, "This
is what we intend"? What its effect would be in a court of
law may be different but would that be sufficient from your point
Professor Pieth: For our purposes,
it would be probably far preferable. I am aware that with this
Bill you are trying to meet other goals as well, domestic goals,
and you are trying to pick up other instruments. I understand
that you might take such an approach. That is where I would like
to be diplomatic. I want to see it working. That is why I would
say you have two choices at the moment. If you want to be quick,
you need to add a clause making it absolutely clear that even
for the engineer the bribing of a foreign, public official is
covered here, even though this might be repetitive. There are
a lot of other things that are not, strictly speaking, necessary.
Alternatively, you can choose the way that all your common law
colleagues have been choosing, to write a very simple, straightforward
clause, half a page, saying what is forbidden. I can leave the
examples here. They are on the internet and we have pulled out
a few of them for these purposes. Some of them are common law;
some of them are civil law. They show you how you can do it if
you want. I am convinced personally that the UK is making a very
serious effort but you are exposing yourself. You are vulnerable
if you come with this kind of legislation into the wider, international
framework. You will be accused by the south of not living up to
Q373 Chairman: Suppose this Bill
is passed in its present form. Are you saying that the United
Kingdom would then be complying with its obligations under your
Convention or would not be complying?
Professor Pieth: I would not,
in my very simple language, say you flunked the exam directly
but you have several two star deficiencies and several one star
deficiencies. Three stars mean you have flunked. You have a problem
with the foreign, public official because we request an autonomous
definition of a foreign, public official. That is to say, you
define what the public domain is from herefor instance,
unambiguously that MPs anywhere in the world, judges anywhere
in the world, members of international organisations and so on
are all coveredand you do not refer back to Egyptian law.
Since you are not pronouncing yourself on it, there will be a
question mark here. Are you actually referring back to Egyptian
law? This is at least a question we will have to ask. I have mentioned
the foreign judges, MPs, representations of public enterprise
and international organisations, issues that we have a question
about under the laws pre-2001. We will have them again here. We
have a question as to "corruptly". We are very doubtful
that it is too much of a qualifier and cuts out cases that we
want to see covered. We have a problem with the clauses which
we do not understand at the moment. I understand that they are
necessary because you are too broad in one and two, but the way
they run I am asking myself: what is the public interest, for
instance, if it says, "acting on behalf of the public"?
Does that mean somebody who is generating jobs for British industry
is acting on behalf of the public? That interpretation would certainly
not be possible and I do not think it is right but the question
for somebody who is not very nice with you remains open in 6(3)(b).
Clause 15 is being explicit and just asking for trouble. There
you will be in massive trouble with the intelligence agencies.
That is going to trigger off huge debates internationally as well
as the consent to the prosecution requirement. There we will have
grave doubts. Summing up, our main problem is not those individual
points I mention. Our main problem is it is very difficult to
understand and therefore might be unclear not for the lawyeryou
have fantastic, trained lawyersbut do your small and medium-sized
enterprises understand it? They do not have in-house counsel.
I am Swiss but
Q374 Chairman: You are a great expert
on this from the OECD and what I want to know is what is your
final assessment? If we do this, are we complying fully with our
obligations? The fact that someone will not like what we have
done or may pick up little bits here and there does not necessarily
mean that we are not complying with the obligations under the
Convention. Are we complying or not?
Professor Pieth: It is not as
clear cut as that. I am anticipating what will happen. Since there
is so much complexity, we will have serious doubts whether it
will really be full compliance.
Q375 Chairman: On balance, you think
we would not be complying. I know you are trying to be diplomatic.
Professor Pieth: I have to. I
cannot risk my job.
Q376 Chairman: Let us move into the
commercial sphere again. It seems clear on the Bill that this
is not meant to cover overseas companies, companies operating
wholly overseas, including the subsidiaries of British companies.
Assuming that is right, is that acceptable to the OECD or not?
Professor Pieth: I had a different
understanding of clauses 13 and 14. They do cover British companies
acting abroad. The point you are raising is more delicate. You
are asking: does it also cover foreign subsidiaries of British
companies. There I must admit that the OECD has a weakness inbuilt
in its own instrument. We would like to see you covering your
foreign subsidiaries. The problem is we did not manage to get
our act together in 1997 when we drafted the Convention to make
that an international, binding standard. The jurisdiction covers
our framework. We are in the process of discussing whether we
should go further in the OECD to pick up also foreign subsidiaries.
Under certain circumstances, foreign subsidiaries would be covered
also in this framework because if it were proven that in the UK
somebody was awarethat is where the intent issue comes
back againnot corruptly and not with some malicious intent
but if they had knowledge that the UK company or its agent was
involved in bribing somewhere, then we would have a case to be
run in the UK under the territorial jurisdiction. You are covering
some cases of foreign subsidiary and agent behaviour but you are
not tackling it head on, although you are in good company or bad
company, if I may say so.
Q377 Chairman: Your working group
has made the criticism that although it may be clear that it is
bribery if the person paying the money, on giving the bribe, gets
a benefit, it is not clear that he pays the money to confer benefit
on a third party. Your OECD Treaty is explicit on this. Does not
our Bill go far enough on that?
Professor Pieth: For me it is
still an open question because in the report I read that certainly
interested partiestake, for instance, spouses and so onwould
be covered. The problem we had with other countries was that we
wanted a disinterested third party also to be covered. If I ask
for payment to the Red Cross or political parties, that needs
to be covered and there is a question mark there. This would be
one of my one star issues where we are simply uneasy because it
is not explicitly said in a clear manner. There is a reference
to third parties somewhere but it is not very clear. That would
be a minor point for me, whether you are really reaching out far
enough into the third party area, but that is not a fundamental
Q378 Baroness Whitaker: There is
also a point about coverage of public officials. Are you content
with the way our Bill captures the various groups of public officials?
I know that the Convention means to include judges and international
organisations. We are not so specific. Do you think our text covers
Professor Pieth: You are taking
an approach with agent and principal. You are referring to other
sources of law that are pre-existent. What we are asking for is
to be absolutely secure that the Egyptian MP, judge, the official
of the European Union etc., are all covered. In the first round,
phase one, we had serious doubts as to whether we really had full
coverage. The new law seems very sweeping and very broad. It seems
to have a very broad agent concept. We will come back and ask
the questions and we want to be convinced that it is really the
case. We want to see case law. There might be a difficulty because
there may be no case law here so there will be a question mark
hanging over the UK legislation and it would be so much easier
if you simply had a definition to say that it is covered.
Q379 Baroness Whitaker: The government
could give an assurance in Parliament when the Bill was passed.
Professor Pieth: That would not
be acceptable. We want a legal text. This is very much from the
Swiss perspective but ordinary citizens have to understand the
law. That is the French Revolution.