You have drawn attention to the likely increase in cases where the demand state and the supply state intend to assert jurisdiction over an act of bribery by a global corporation. How do the authorities decide which one should prosecute and obtain asset forfeiture?
The authorities may discuss these issues between them but there is no obligation on them to reach agreement. They may each decide to prosecute and seek asset forfeiture. Whether they can do this will depend on their domestic law and the extent to which their courts take account of convictions or acquittals in other states.
What are the issues from the point of view of the demand state?
The demand state may consider that there is a strong national public interest in a prosecution of the company in their jurisdiction. It may be reluctant to give up jurisdiction to another state particularly if no share of any penalties and asset forfeiture is returned to the demand state. This is very understandable. Supply states need to recognise this legitimate concern on the part of a demand state.
What are the issues from the perspective of the supply state?
The supply state will want to look at whether wider offences have been committed which should be brought before their own courts. There may also be concerns about the political will in the demand state to fight corruption and whether there will be a prosecution. A supply state would be reluctant to cede jurisdiction and then find that no action is taken in court. Again this is an understandable concern.
What does this mean to the global company involved?
Companies are at risk of double penalties if both states decide to take enforcement action in respect of the same bribe. The company can try to invoke the principle of double jeopardy but states vary in whether they have regard to the result of a prosecution in another jurisdiction. A company can find that it is prosecuted in both states for the same offence.
Are there particular issues about asset forfeiture?
A company could be subject to asset forfeiture in both states. This is contrary to the underlying philosophy of asset forfeiture. Once the asset or the value of the asset has been confiscated in one state, then there remains nothing left for another state to confiscate. If that state does recover something further, then that is effectively a criminal penalty and not asset forfeiture. Credit should therefore be given for asset forfeiture in another state. There is limited evidence that this happens in practice. The rules on this need to be developed further.
Is there a mechanism for resolving these issues between the demand state and the supply state?
There is a mechanism but it has not been used so far in a corporate case. Article 47 of UNCAC and Article 4(3) of the OECD Convention require states to consult in order to determine which jurisdiction should prosecute. It is open to any state involved in the case to invoke this mechanism. It is important that this is done in the future.
What principles are applicable in resolving these issues?
No principles to be applied in a corporate case have as yet been established. It is important that this is done and the results published. There needs to be guidance on whether one state only should prosecute or whether both or all states should prosecute. If there is to be a prosecution in more than one state, then the states should reach an agreement that will ensure that the company does not face prosecution and asset forfeiture in multiple states for the same act of bribery. If the supply state is to prosecute and not the demand state, then there needs to be agreement on returning assets to the demand state.
Do global companies have any input into these discussions?
No. There is no formal role for companies. However it ought to be possible for global companies to submit representations when the UNCAC/OECD mechanism is being applied. It will be necessary to ensure though that this does not lead to protracted collateral negotiation and litigation. Enforcement authorities will be very concerned about this if it used to delay the case particularly if there are limitation issues involved.
What would you like to happen next?
I want to see discussion about the principles to be used in cases where a supply state and a demand state both want to bring enforcement action. These principles need to be worked out and published. I then want to see a case where the UNCAC/OECD mechanism is used and the principles applied so as to achieve a satisfactory result. And in one way or another I very much want to see the demand state receive suitable restitution for the act of bribery.
|Richard Alderman was the Director of the UK’s Serious Fraud Office from 2008 until 2012. He is the author of the report by the B20 Task Force on Improving Transparency and Anti-Corruption 2014. He can be contacted at: Richardlowthdr@aol.com|
Tags : B20 Task Force, SFO, Richard Alderman, UNCAC, UNODC, OECD
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