Further to my previous article on the Bribery Act 2010, I would like to share some examples of potential offences 

Section 1: offences of bribing another person

Section 1 makes it an offence for a person to offer, promise or give financial or other advantage to another person in two cases:

·   Case one, where a person intends the advantage to bring about an improper performance of a relevant function or an activity by another person or to reward such improper performance.

·  Case two, where a person knows or believes that the acceptance of the advantage offered, promised or given, in itself constitutes the improper performance of a relevant function or activity. "Improper performance" of a function is performance means a breach of an expectation (of a reasonable person) that a person will act in good faith, impartially, or in accordance with a position of trust and that functions in both the public and private sectors are covered.

There have been concerns that this section would prevent certain types of hospitality, such as taking clients to major sporting events. However, the guidance clearly states that in order to bring a case, the prosecution would have to show that the hospitality was intended to bring about the improper performance and that this would be judged by what a reasonable person in the UK would think. It is therefore seen as unlikely that taking clients to, say, a Six Nations match at Twickenham would be an offence.

Section 6: Bribery of a foreign public official 

A person is guilty of the offence if his intention is to influence the official in the official's capacity as a foreign public official. A foreign public official includes, among others, elected and non-elected officials holding a legislative, administrative or judicial position in any kind of country or territory outside the UK. This will include those performing public functions in national, local or municipal government or for any public agency or public enterprise of such a country or territory, such as professionals working for public health agencies and officers exercising public functions in state-owned enterprises. Officials or agents of a public international organisation, such as the UN or the World Bank can also be included (see section 6(5) and 6(6)).

The guidance notes that there may be an overlap between the section 1 offence and section 6 offence, in that bribing a foreign public official may involve conduct which amounts to improper performance of a relevant function. The lesser evidential requirement of section 6, that is, of proving the intention only to influence the official in his capacity as a foreign public official, is aimed at making section 6 more effective to prevent the influencing of decision making of public officials.

Given the wide scope of section 6, the guidance gives the following additional explanations:

Local law where, for example, local planning law permits or requires a company doing business in a jurisdiction to put some additional investment in to the local economy (so called "off-set" arrangements) this is very unlikely to trigger a section 6 offence. If the additional investment would advantage the official himself and the local law is silent on the matter, the prosecutors will consider the public interest in prosecuting.

Hospitality, promotional and other business expenditure the intention behind the Bribery Act is not to criminalise bone fide, proportionate and reasonable hospitality, promotional and other business expenditure which is aimed at better public relations. Such expenditure can, however, amount to a bribe where it is accompanied by the requisite intention to secure a business advantage by influencing the official in his official capacity but it will be necessary to show that there is a real advantage to the official or a person at his request. The prosecution will have to show that there is sufficient connection between the advantage given and the intention to influence and secure the business advantage. Generally the more lavish the hospitality and the higher the expenditure, the greater the inference that it is intended to influence the official to grant the business or business advantage. The guidance notes that different sectors have different norms as to the levels of hospitality that they offer, although remaining in keeping with those norms will not itself be evidence that no bribe was paid, if there is contrary evidence. However if there is no contrary evidence it is unlikely that the incidental provision of a routine business courtesy such as transfers from airport to hotel for a site visit or tickets to an event, will raise the inference that it was intended to have an impact on decision making.

Section 7: Failure of commercial organisations to prevent bribery

A relevant commercial organisation is guilty of an offence if a person associated with it bribes another person intending to obtain or retain business or a business advantage. However, it is a defence for the organisation to prove that it had in place "adequate procedures" designed to prevent those associated with it from undertaking such conduct. The standard of proof for establishing the defence is the balance of probabilities. 

Commercial organisation is a body or partnership incorporated or formed in the UK irrespective of where it carries on a business, or an incorporated body or partnership which carries on a business or part of a business in the UK irrespective of the place of incorporation or formation. The term "carries on a business" is not defined in the Bribery Act.

Associated person an associated person is associated with a commercial organisation if it performs services for or on behalf of that organisation. Although this could include employees, agents and subsidiaries, the relationship between the parties will not be the only factor. Contractors and suppliers who perform services (the guidance draws a distinction here between those merely selling goods) could also be covered.

Supply chain: an organisation is likely only to have control over its relationship with its contractual counterparty, that it may not even know the identity of its sub-contractors and that it is likely that sub-contractors will be actually be performing services for the organisation's contractual counterparty and not for other persons in the contractual chain. The principal way in which commercial organisations may decide to approach bribery risks arises as a result of a supply chain adopting anti-bribery procedures (such as risk-based due diligence and the use of anti-bribery terms and conditions) with its contractual counterparty and by requesting that counterparty to adopt a similar approach with the next party in the chain.

Joint venture parties: in the case of joint ventures through a separate legal entity, a bribe paid by that entity may lead to liability for its members if it is performing services for those members and the bribe is paid with the intention of benefiting them. However, it also notes that the legal relationship between the joint venture entity and its members does not automatically mean they are associated. Where the joint venture is conducted through a contractual arrangement, whether a party to the arrangement is liable for a bribe paid by an employee or agent engaged by one of the other parties to the joint venture will, partly, depend on the degree of control it has over that employee or agent. Normally the employer or person contracting with the agent will be the person associated with them. In any event, an offence will not be committed if it cannot be proved that the associated person intended to obtain or retain a business advantage for the commercial organisation. This is so even if the commercial organisation (be it a parent company or subsidiary) benefits indirectly from the bribe. However, if such intention can be proved, then the organisation may be liable (subject to the defence of having adequate procedures to prevent bribery).

Facilitation payments: small bribes to facilitate routine government action can form a section 6 offence or, if the requisite intention to induce improper conduct is present, the section 1 offence, and therefore liability under section 7. Given the determination to eradicate facilitation payments, the guidance states that there will be no exemptions for them. However it is recognised that if there is no alternative but to make a payment in order to protect 'life limb or liberty' the common law defence of duress will probably be available.

Prosecutorial discretion: before proceeding, prosecutors must be sure that there is both evidence on which to base the prosecution and that it is in the public interest to do so. The guidance notes that prosecutorial discretion provides a degree of flexibility which will help ensure the just a fair operation of the Bribery Act. 

More on this subject in our next article.