Memorandum from Transparency International
(UK) (DCB 18)
Transparency International (UK) (TI(UK))
1.1 The Appendix briefly introduces TI(UK).
TI(UK)'s Approach to Corruption Law Reform
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
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 wide-ranging intention.
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.
Addressing the Joint Parliamentary Committee's Principal
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 sufficient
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
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 clarified.
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.
TI(UK)'s Principal Concerns and Proposals
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