International Anti-corruption day 2015 - Bribery Act 2010 presentation

The UK’s Bribery Act 2010:

How - and why - does a foreign law affect

Romania?

Neil McGregor

British Solicitor, Managing Partner

International Anti-corruption Day,

Bucharest, 9 December 2015

The logo for this presentation:

… is provided by the

international/UN campaign

co-ordinated by UNODC …

…but the presentation has been

prepared by

Some (very old) News!

Bribery and corruption are illegal in

Romania.

Romanian law imposes significant

penalties / sanctions on those who

break Romanian laws against bribery

and corruption.

Some (more recent) News!

The Romanian authorities responsible for enforcing

Romanian laws against bribery and corruption

(Poliția, DNA, ANI, DIICOT, ANAF, etc.) have

become very active in investigating and

prosecuting cases.

Please see television, the internet and the press for

recent reports of high-profile arrests and

investigations in Romania.

Bribery & Corruption: what do they look like?

• șperţ

• ciubuc

• bacşiş

• ruşfet

• dijmă

• cadou

• atenţie

• plocon

• prinos

• ofrandă

• danie

• înzestrare

• peșcheș

• șpagă

• paraîndărăt

• sfănțuilă

• procent

• a lua dreptul

• mangă

• mâzdă

• dăruşag

• cinste

• prosfora

…or in other words...

Lawyers’ (Prosecutors’) language…

• dare de mita

• trafic de influența

• cumparare de influența

• abuz in serviciu

• etc.

…so are you clear about what is – and what is

not – illegal?

…and are you clear about why it is

illegal?

The UK’s approach

…is illegal.

Bribery

What is Bribery?

Bribing someone else (I):

• An offer, promise or gift

• A financial or other advantage

• Intended to induce or reward improper performance

What is Bribery?

Bribing someone else (II):

• An offer, promise or gift

• A financial or other advantage

• Knowledge that acceptance of the advantage is itself improper performance

What is Bribery?

Being bribed (I):

• Requests, agrees to receive or receives

• A financial or other advantage

• Intending improper performance

What is Bribery?

Being bribed (II):

• Requests, agrees to receive or receives

• A financial or other advantage

• The request, agreement to receive or receipt of the advantage is itself improper

performance

What is Bribery?

Being bribed (III):

• Requests, agrees to receive or receives

• A financial or other advantage

• As a reward for improper performance

What is Bribery?

Being bribed (IV):

• In anticipation or in consequence of a request, agreement to receive or receipt

• A financial or other advantage

• Improper performance occurs

It does not matter whether:

• the person being bribed is the person who is responsible for the improper performance

• the financial or other advantage is for the benefit of the person being bribed or for someone else

• the approach is direct or indirect

It’s a cultural thing…

The concept of “proper performance”.

What is “proper performance”? Apply the

Expectation Test

The Expectation Test

The standard is what a reasonable

person in the UK would expect.

Any local custom or practice is to be

disregarded UNLESS it is permitted or

required by the [local] written law.

Expectations in:

• Public functions

• Business activities

• Activities of employees

• Activities on behalf of a body of

persons.

Expectations of what?

• Good faith

• Impartiality

• Acting properly in a position of

trust

In case of any doubt about foreign public

officials…

An offence:

• In order to retain or to gain business or a business advantage

• Offer, promise or giving of any financial or other advantage

• To a foreign public official or to someone else at the official’s request or acquiescence

UNLESS

Written law permits or requires the official to be influenced by the offer, promise or gift.

So…

We have a single offence of “bribery” and an intellectual definition of what “bribery” actually is – including the reference the expectations of a reasonable person in the UK.

Arguably this is clearer than Romanian law, but the essence is the same: bribery is illegal.

But bribery still happens….

The big change – making companies responsible

for

preventing bribery.

An automatic (strict liability) offence

“A relevant commercial organisation (“C”) is guilty of an offence … if a person (“A”) associated with C bribes another person intending:

(a) to obtain or retain business for C; or

(b) to obtain or retain an advantage in the conduct of business for C.”

What are “relevant commercial organisations”?

• British companies and firms; and

• “any other body corporate (wherever

incorporated) which carries on a

business, or a part of a business, in

any part of the UK”

Who is an “associated” person?

• A person (“A”) is associated with C if A

performs services for or on behalf of C.

• The precise capacity in which services

are performed does not matter.

• “A” may be C’s employee, agent or

subsidiary … AND

Whether or not A is a person who

performs services for or on behalf of C

is to be determined by reference to all

the relevant circumstances and not

merely by reference to the nature of the

relationship between A and C.

Remember!

“…carries on a business or a part of a business…”

What does this mean?

What could be excluded?

• Shares being listed?

• A bank account?

• Internet traffic?

The key to the international reach of the Bribery

Act

The City of London

The scope of the offence…

…is extremely wide.

Is your company carrying on a business or a part of a business in any part of the UK?

Is it “associated” with another company which is?

How can UK concept of “bribery” apply in

Romania?

“An offence is committed … irrespective

of whether the acts or omissions which

form part of the offence take place in the

UK or elsewhere”.

So you do need to consider the UK

law…

The defence…

“…it is a defence for C to prove that C had

in place adequate procedures designed to

prevent persons associated with C from

undertaking such conduct.”

But what are “adequate procedures”?

What the UK Ministry of Justice thinks…

The Six Principles

Principle 1

Proportionate Procedures.

Principle 2

Top-level Commitment.

Principle 3

Risk Assessment.

Principle 4

Due Diligence.

Principle 5

Communication

(including training).

Principle 6

Monitoring and Review.

What a judge or a jury will think…

? If the procedures failed to prevent bribery, were

they “adequate”? Why bother to try to comply?

Are your procedures subject to independent

(external) review?

What a judge or a jury (or you) will think…

• [Investigator]: Okay, great, thank you. Just focussing on the risk of bribery, were you ever aware of any risk assessment procedures that the bank adopted in order to identify bribery?

• Bank Employee: No, not, not from what I could recall, no.

• [Investigator]: Okay. And did you know if the bank ever established any objectives to counter bribery?

• Bank Employee: No, I can't, I can't think of anything, I can't recall anything.

• [Investigator]: Okay. Did Mr [•], as your manager, ever issue a statement about bribery?

• Bank Employee: I can't recall anything. Source: SFO -v- Standard Bank Plc, Statement of Facts, Appendix 3, para 5

What a judge or a jury (or you) will think… • Bank Employee: … I do recall plenty of compliance-related quizzes being offered

on the Internet which I think is pretty standard practice at most banks these days.

• [Investigator]: Was that pass and fail or.?

• Bank Employee: I think so.

• [Investigator]: And were there any kind of refresher sessions afterwards?

• Bank Employee: Not that I can recall.

• [Investigator]: And do you remember passing them or failing them?

• Bank Employee: I remember passing them all.

• [Investigator]: Okay.

• Bank Employee: It was a fun challenge to see how quickly you could pass them.

Source: SFO -v- Standard Bank Plc, Statement of Facts, Appendix 3, para 3

It really is a cultural thing…

..not of countries, but of companies – the aim of this law is to change corporate culture.

Too ambitious?

Think Health and Safety – which of your companies does not have a health & safety culture?

Investing in a corporate anti-bribery culture –

like a corporate health & safety culture – is good

for business

“Accidents” will and do happen from time to time – including “business accidents”.

Other people’s “mistakes” can cause serious damage to your company – or to your business partners, parent companies, etc.

Creating a corporate culture which does not allow (as opposed to not permitting) “bribery” – whether petty or major - is the key.

Should Romania have similar legislation?

Note the key aspect: it is not enough to have “ticked the boxes”.

The object is to change the business culture.

Does your business have a culture which prevents bribery?

For further information… …or for confidential advice on how to convince people to buy into the business safety culture…please contact us!

• Bucharest Contacts:

• Neil McGregor, Boiana Berchi & Elena Abdulgani

• McGregor & Partners S.C.A. Str. Emanoil Porumbaru no. 17, Sector 1, 011421 Bucharest, Romania Telephone: +40 21 222 04 88 Fax: +40 21 312 16 46

• Sofia Contacts:

• Neil McGregor, Julian Spassov & Asya Vladimirova

• McGregor & Partners Law Firm 11, Christo Smirnensky Blvd, 6th Floor, 1164 Lozenetz, Sofia, Bulgaria

• Telephone:+359 28 65 17 17 Fax: +359 28 65 18 18

www. mcgregorlegal.eu

Thank you for your attention,

BUT

... please remember that the information contained in this presentation is

provided for background information purposes only and was believed to be

correct at the time of writing.

It is not a substitute for taking specific legal advice before taking or

refraining from any action.

If in doubt, please call me on +40 722 368 076