Collared: Corporate Crime in Ireland Update
The Criminal Justice (Corruption Offences) Bill 2017 was published late last year by the Minister for Justice and Equality as part of the Government’s White Collar Crime package and is expected to be enacted in late 2018 with the intention of modernising the existing anti-bribery and corruption framework.
The purpose of the legislation may be viewed as twofold. The first is to consolidate the numerous existing Statutes such as the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and Prevention of Corruption (Amendment) Act 2010. The second is to implement the findings of the Mahon Tribunal which published its final report in 2012 in relation to certain planning matters and payments.
Who does this apply to?
The legislation will apply to bodies corporate, state bodies and civil officials alike. Furthermore, it will apply to Irish residents and citizens and registered companies operating within the State. Therefore, Irish companies with an overseas office as well foreign companies operating in Ireland are both within the scope of the legislation.
What constitutes a bribe?
A bribe is referred to throughout the legislation as “a gift, consideration or advantage”. It may be received directly or indirectly, individually or with another person. There is no requirement for the bribe to have actually been made. The offering or agreeing to give a bribe will constitute an offence under the legislation. Similarly, it will be an offence for the bribe to be accepted or agreed to be accepted. Therefore, bribery and an attempt to commit or accept bribery, will constitute an offence under this legislation.
One of the key features of the legislation is the creation of a new offence of “trading in influence”. This occurs if a person either directly or indirectly corruptly offers, gives or agrees to give a bribe to an official as a means of influencing the official’s decision making. This would include situations where a person offers a third party a bribe with a view to that person exerting influence over the acts of an official. The inclusion of the term “corruptly” is particularly noteworthy. “Corruptly” has been given a meaning which, while not exhaustive, is open to interpretation in terms of the offence to which it relates. It includes the making of false statements and the withholding, concealing, altering and/or destroying of information with a view to influencing another person. It is arguable that the broad definition of this term may give rise to uncertainty in its future application.
The legislation also creates the offence of “active” and “passive bribery”. “Active bribery” will occur where a person offers, gives or agrees to give a bribe to a person as an inducement or reward for them doing something in relation to their office, employment position or business. “Passive bribery” on the other hand will occur where a person accepts or agrees to accept a bribe. This offence applies to both the private and public sectors.
It is important to note that if it is proven that the bribe was given to an official by a person with an interest in the discharge of the official’s duty, then it will be presumed to have been given and received corruptly as an inducement for the official to perform a particular act unless the contrary is proven. This presumption of guilt will also be present in situations where the official performs or omits to perform a function that gives rise to an undue benefit or advantage to the person who gave the gift.
Other offences under the legislation include the use of confidential information by an Irish official by virtue of his position for the purpose of obtaining a gift, consideration or advantage as well as the giving of a gift, consideration or advantage for the purposes of facilitating corruption.
Implications for Companies
A body corporate will be held criminally liable if one of its officers or employees engages in corrupt activity as a means of obtaining or retaining business. Therefore, it is paramount that companies take steps to ensure compliance with the new legislation, e.g. ensuring that an up to date anti-bribery and corruption policy is in place in respect of the company’s dealings with existing and prospective clients. This would include hospitality and social events as well the company’s relationship with third parties. Companies should carry out formal due diligence with all agents acting on behalf of the company as well as commercial third parties. It is also prudent to insert warranties in agency and third party contracts in relation to conduct and dealings with existing and prospective clients.
Should a company be accused of committing an offence under the legislation, its only defence will be its ability to demonstrate that all reasonable steps were taken and proper due diligence was carried out to prevent the alleged offence. Therefore, it is essential that companies carry out due diligence in respect of their internal and external practices and procedures with regard to client entertainment and networking generally.
A company whose officers have engaged in corrupt activity as a means of obtaining or retaining business or gaining an advantage for the body corporate will be liable to a Class A fine (€5,000) upon summary conviction or an unlimited fine upon indictment.
Individuals convicted under the legislation can be liable to a maximum sentence of 10 years imprisonment and/or unlimited fines. In certain circumstances, the person can be ordered to forfeit their position as well as be prohibited from holding or occupying any office in the future. An order of this nature may be made if the court considers it in the interest of maintaining or restoring public confidence in the public administration of the State as well as being in the interest of justice.
Copyright © Alban O’Callaghan, McKeever Solicitors, 4th January 2018.
This article is a general recital of the new law on the subject and is not intended to be definitive or exhaustive. Specific legal advice must be sought on a case by case basis. For further information, please contact Alban O’Callaghan or Andrew Clarke.
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