ETHIC Intelligence hosts second annual international conference
on corruption prevention Standards and Guidelines

OECD Conference center, Paris, Monday September 11, 2017

ETHIC Intelligence was very pleased to host its second annual international conference on Standards and Guidlines: Recent developments in Anti-Corruption Compliance on September 11, 2017 at the OECD conference centre in Paris. You can now view photos and video from the conference where experts from business, civil society and government exchanged and debated on how best to progress in the fight against corruption.

Click here for photos and videos

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UK Bribery Act and Guidance: Implications Explained by Co-drafter

Interview of Charlie Monteith, formerly Counsel at White & Case London’s global White Collar Group and former Head of Legal and Operational Assurance with the UK Serious Fraud Office and currently with the Basel Institute on Governance. Charlie is a key architect of the UK Bribery Act and current member of the ETHIC Intelligence certification committee.

What was your role in drafting the UK Bribery Act and Guidance?
The UK Law Commission (LC) was tasked with drafting a suitable Bribery Act. I was part of the LC Advisory Panel. Originally, it was to be for a new Corruption Act but that was the first thing we ditched because bribery is easier to define than corruption. I recommended looking at the UK Fraud Act’s ‘abuse of position’ offence for a new general bribery act offence with the difference being that bribery usually involves one person offering benefits to get another person to breach a position of trust, which became the model for the two (active and passive) general bribery offences. I also helped push for the new corporate offence of failing to prevent bribery. Finally, I drafted the Attorney General’s Legal Guidance on the Act, and helped draft the Ministry of Justice guidance on adequate procedures to prevent bribery.    
What about the new corporate offence of failing to prevent bribery?
The LC was initially reluctant to create a new corporate offence. It took some persuading. Corporates can of course be directly liable for general bribery and bribing foreign public officials, if a senior manager is personally involved. Up to 2008 there were no prosecutions in the UK for corporate bribery under the old laws because it was so difficult to show such personal involvement at such a level. Commercial bribery usually operates through intermediaries. It was felt that this would not change under new laws unless there was an increase in corporate responsibility and accountability for the way corporate money can be used to pay bribes. This was the justification for the new strict liability offence of failing to prevent bribery by associates. But it had to come with a defence to incentivise corporates to actively prevent bribery through compliance.    
What about the increased jurisdiction for the failing to prevent bribery offence?
The only link required is for a company or partnership to carry on business (or part) in the UK. This was not part of the LC’s draft Bill but was added after a meeting I had with the Ministry of Justice. I was concerned that the Bill at that stage would hit only UK incorporated businesses leaving them at a considerable commercial disadvantage when competing with foreign companies who used bribes to obtain contracts. It was designed to help create a fairer business field for everyone doing business in the UK.    

The UK Bribery Act is one of the rare anti-corruption laws in the world that offer an affirmative defence. Can you explain what an affirmative defence means? Why did the UK MoJ deem it important to include an affirmative defence in the law?
It is only a defence to the failing to prevent bribery offence and was necessary to create a fair and equitable balance so that it only becomes a strict liability offence if there are no or inadequate anti-bribery procedures. It was also a means to incentivise companies to revisit and update their anti -bribery compliance. Affirmative defence means that if an incidence of bribery occurs by anyone working for the company anywhere in the world, the company carrying on business in the UK will be liable for failing to prevent it unless they can prove that they had adequate procedures to prevent bribery. The defence recognises that no compliance system can be 100% effective, for example, there will be people prepared to bribe contrary to stated company policy. Provided that policy is stated and communicated properly, the defence should stand.  
The Guidance provides details on what could constitute an affirmative defence. How was this guidance drafted?
The MoJ guidance started as a cut and paste of best anti-bribery procedures from round the world that included recommended practice and guidance from the OECD, TI, the US FCPA Sentencing Guidelines, the UK Chamber of Commerce, etc. I along with two other colleagues on the working group recommended a principle-based approach, in essence distilling best practice down to six principles with the most important being assessing where a company’s risks of bribery lie. Get that wrong and none of the other five principles will matter.    

Do you think this Guidance is applicable to any company, of any size, in any country?
The principles certainly are but the guidance takes a common sense, proportionate-based approach: Your compliance should be proportionate to the identified risks and the size of the company. For example a small, centralised company with 35 employees could take all the employees through their anti-bribery policy in one training session which would suffice (provided the policy is good enough). A similar company with diverse employees may communicate their policy in a non-centralised way. Raising awareness of the company’s position on bribery is also crucial for all the service providers.    

Some are saying that the Guidance might become an international standard and influence the anti-corruption programs of companies that are not linked to the UK.  Do you think this standard will be recognized by other countries’ companies and jurisdictions?
I think the Guidance is rapidly becoming a global gold standard because it is best practice of what a good anti-bribery system should contain and look like. What I find interesting is the number of companies approaching me for similar standards that are not caught by the Bribery Act at all. They are faced with a wall of indemnities/warranties/termination clauses/lower values for transactions and mergers and acquisitions, if they do not have anti-bribery procedures.   The message is that in an increasingly global market you can easily become contaminated by the bribery of those that work for or with you. Contamination can occur not merely by association with their bribery but also through an innocent acquisition of someone else’s proceeds of crime. If, for example, a subsidiary bribes to obtain a contract, the full value of that contract can potentially be subject to confiscation (recoverable even through the dividend payments paid to an innocent main company) as it represents proceeds of a crime.   The strong message coming across is if you do not have adequate procedures, quite apart from bribery, prosecution, and reputational risks, it is a business risk that will affect your value through higher insurance premiums and bank loans, and lower values offered for your transactions and mergers. I am heartened to see that anti-bribery compliance goes directly to the heart of increasing and protecting corporate value.
 26 January 2012

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Tags : transnational responsibility, affirmative defence, anti-bribery system, protecting corporate value


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