The much anticipated Criminal Justice (Corruption Offences) Act 2018 (the “Act”) was signed into law by President Higgins on 5 June 2018. It is anticipated that the Act will be commenced by way of a Ministerial Order in or around 30 July 2018.
As previously discussed here and here the Act is one of the central planks in a suite of legislative measures introduced by the Government as part of its stated intention of tackling white collar crime.
Overview
The Act is considerably broader in scope than the legislative regime it replaces insofar as it criminalises both direct and indirect corruption in both the public and private sectors.
Parties falling under the Act include individuals, corporates, voluntary bodies and foreign and Irish officials. The Act applies a broad definition to latter so as to capture the broadest range of office holders including officers, employees and members of any “Irish public body”.
From a corporate perspective, the most significant provision introduced by the Act is the introduction of criminal liability for corporate bodies and senior management for offences under the Act.
Offences & Penalties
Most of the offences in the Act are dependent upon an act or omission being carried out ‘corruptly’. While the Act defines ‘corruptly’ as ‘acting with an improper purpose or by personally influencing another’ the definition is a non-exhaustive one, consequently, there is potential scope for actions not explicitly listed under the Act to come within the definition.
While not specifically defined, a ‘bribe’ for the purposes of the Act is treated to be ‘a gift, consideration of advantage’. In keeping with the sweeping nature of the Act, the ‘bribe’ need not be given or accepted in order to constitute an offence, it is sufficient that there be agreement to give or accept.
The key offences and penalties introduced by the Act are set out here.
Corporate and Management Liability
Pursuant to section 18(1), a body corporate will be liable for the actions of a director, manager, secretary, employee, agent or subsidiary who commits an offence under the Act with the intention of obtaining or retaining business for the body corporate or in obtaining an advantage for the business.
A company can seek to defend a prosecution by demonstrating that it took “all reasonable steps and exercised all due diligence in seeking to avoid the commission of the offence”. In contrast to the defence of adequate procedures provided for under the UK Bribery Act 2010, the Department of Justice has indicated that it will not be publishing any guidelines around what can be considered “all reasonable steps”.
Section 18(3) provides that a director, manager, secretary or other company officer who consents to the commission of the offence may also be guilty of an offence. The same office holders will also be guilty of an offence if proved that the offence on the part of the company was attributable to any wilful neglect on their part.
From a management perspective, it is worth nothing that it is not necessary for the body corporate to be convicted of the offence in order for the senior management to be prosecuted.
Public Sector Element
Section 7 of the Act has introduced the new offence of “Corruption in relation to office, employment, position or business”, involving an “Irish Official”. The term “Irish Official” is defined as applying to a range of specified office holders for example elected members of Dáil Éireann, Seanad Éireann and the European Parliament, the Attorney General, the Comptroller and Auditor General, the Director of Public Prosecutions, members of the judiciary, jurors and arbitrators are all specified as Officials within the meaning of the act. The definition is further extended to officers, directors, employees and members of Irish Public bodies, which is stated as including members of local authorities. Consideration should be given to the Schedule to the Act, which defines what constitutes a public body for the purposes of the act and a further analysis of this aspect of the Act will be provided by William Fry shortly.
Presumptions
The Act contains a number of presumptions in relation to officials and political donations under sections 14, 15 & 16 of corruption which are considerably broader in scope than in the legislation previously. The effect of these presumptions lowers the prosecution by switching the onus on to a defendant to rebut the presumption(s).
Extra territorial effect
In a similar vein to the equivalent US and UK legislation, the offences under the Act are given extra territorial effect.
Pursuant to sections 11 to 13 of the Act, Irish citizens, companies and corporate bodies registered in Ireland will be liable under the Act for actions committed outside of Ireland where those actions would otherwise constitute an offence under the Act if committed in Ireland.
The scope of this extra territorial effect is somewhat limited by the requirement that the act committed must also be an offence in the jurisdiction in which it was carried out.
It is anticipated that this dual requirement will provide some degree of breathing space for Irish citizens, companies and registered entities operating abroad. It is also likely to fuel criticism that the ACT doesn’t go far enough in holding to account parties whose actions abroad would not necessarily match their obligations in this jurisdiction.
UK Bribery Act 2010
For many Irish businesses, the UK Bribery Act 2010 was a watershed moment that triggered a detailed re-assessment of work practices. With the introduction of the Act, the first question for many business which are already complaint with the UK Bribery Act 2010 is what additional steps, if any, will be required for compliance with the Act.
The two Acts contain many similar provisions, they both make active and passive bribery offences and contain provisions on bribing foreign officials. Both Acts contain extra-territorial effect – however the Irish legislation provides that the offence abroad must also be an offence in the place where the corrupt act was done. This is not a requirement under the UK law and it would appear that in this respect the UK legislation is stricter. The effect of both Acts could mean that a company that is found guilty of an offence in the UK could also be open to prosecution for the same act under Irish law as there is no explicit double jeopardy provision in the Act.
The Irish Act contains several offences that do not appear in the UK Act. These offences are focused on public officials.
As dealt with previously a further difference between the two Acts is the defence available to companies under section 18 (2) of the Irish Act. It would appear that adequate procedures would encompass taking reasonable steps and due diligence to avoid corruption and therefore if a company had put in place procedures for compliance with the UK Act the same procedures would provide a defence under the Irish Act.
Next Steps For Companies
Due to the sweeping nature of the Act, a one-size-fits-all approach will not work. Instead, companies will need to undertake their own assessment of the risk in order to determine what due diligence and training procedures are appropriate to their business. While the form that this should take will vary, at a minimum, the following steps should be implemented:
- Companies need to ensure that they have a robust anti-bribery policy in place, and if there is one already in place, these policies should be reviewed and updated in light of the Act.
- Responsibility for rolling-out and monitoring compliance should be vested in a designated employee.
- Once the policy is in place / reviewed, notification and training should be rolled out regularly to all directors, employees and contractors
Contributed by Gerard James
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