Bribery and corruption - Jersey19 Sep 2012
This briefing explains the laws governing bribery and corruption in Jersey. Jersey has its own legal system and is a separate jurisdiction from that of England and Wales. To combat bribery and corruption, it enacted the Corruption (Jersey) Law 2006 (the "Corruption Law"), which came into force in March 2007. However, the United Kingdom's Bribery Act 2010 (the "Bribery Act"), which came into force on 1 July 2011, is not only capable of extra-territorial effect but is also shaping current market practice and expectations in Jersey.
The aim of the Corruption Law was to introduce comprehensive measures to combat bribery and corruption both domestically and internationally. A "start from scratch" approach was adopted, abolishing the customary law offence of bribery and certain existing statutory offences so that all such offences are dealt with by one statute.
The Corruption Law contains three main offences. The offences apply to legal persons, and so apply to companies as well as individuals. None of the offences refer to "bribes". Instead the word used is "advantage" which includes almost anything imaginable, monetary or otherwise. Further, each offence must be carried out "corruptly", which is not defined. Therefore, a broad, commonsense approach must be taken.
- Corruption concerning a public body (Article 5). It is an offence to give (or promise/offer) or receive (or solicit/agree to receive) any advantage as an inducement or reward for anyone working at a public body to do or not do something. It catches both the briber and the bribed. "Public body" is broadly defined and includes bodies such as the States of Jersey, the Jersey Financial Services Commission and, indeed, any company in which the States are principal shareholder. It also extends to any such equivalent body which exists in a country or territory outside Jersey. Moreover, the person giving the bribe need not be the person who benefits from the act or omission, and the person receiving the bribe need not be the person who works at the public body.
- Corrupt transactions with agents (Article 6). It is an offence for an agent to accept or obtain (or agree to do so) or give (or agree to give/offer) any advantage as (i) an inducement or reward for doing or not doing any act in relation to the affairs of the principal, or (ii) for showing or not showing any favour or disfavour in relation to the affairs of the principal. "Agents" include both public and private sector agents (including employees) in Jersey or abroad, acting on behalf of a principal.
- Corruption by public officials (Article 7). The offence catches what might colloquially be called abuse of public office. "Public official" is broadly defined, including officers or employees of a "public body" - so the offence is relevant to companies which are principally state owned (whether by the States of Jersey or their equivalent outside Jersey).
The penalties for each offence are severe, being up to 10 years imprisonment and a fine.
If the offence is committed by a company, liability can also attach to the individuals involved. Article 10 provides that where an offence is committed by a body corporate (or limited liability partnership) with the "consent or connivance of" or is "attributable to the neglect on the part of" a director, manager, secretary or other similar officer (or partner in the partnership), or anyone purporting to act in such a capacity, then that person shall also be guilty and liable in the same manner.
Moreover, anyone who aids, abets, counsels or procures the commission of an offence shall also be guilty of the offence and liable in the same manner as the principal offender.
Territorial scope of the Corruption Law
Anyone may be prosecuted in Jersey if any of the acts which constitute the offence were committed in Jersey, notwithstanding that other acts constituting the offence were committed outside Jersey. As noted above, the public bodies or public officials involved may be located elsewhere in the world, and in the case of corrupt transactions with agents, it is immaterial if the principal's affairs or business, or the agent's functions, have no connection with Jersey and are conducted, or carried out, outside Jersey.
In addition, UK nationals resident in Jersey, Jersey companies or Jersey limited liability partnerships can be prosecuted in Jersey for acts carried on wholly outside Jersey, where such acts (if carried out in Jersey) would be an offence under the Corruption Law.
The UK's Bribery Act was designed to replace the fragmented and complex offences at common law and contained in the Prevention of Corruption Acts 1889 to 1916 and to provide a more effective legal framework to combat bribery in the public or private sectors.
The Bribery Act creates two general offences of bribing another person (the offering, promising or giving of an advantage - section 1) and being bribed (the requesting, agreeing to receive or accepting of an advantage - section 2). It also creates a discrete offence of bribery of a foreign public official (section 6). The offences apply to legal persons, and so can apply to companies as well as individuals. These offences are all punishable by imprisonment of up to 10 years imprisonment and/or a fine.
The Bribery Act also creates a new specific corporate offence of failure by a commercial organisation to prevent a bribe being paid for or on its behalf by a person "associated with" the commercial organisation, with the intention of obtaining or retaining business, or an advantage in the conduct of business, for the commercial organisation (section 7). Such persons include anyone who "performs services" for the commercial organisation and could include its servants, agents, joint venture partners, subsidiaries and even independent contractors and suppliers. This is a strict liability offence, punishable by an unlimited fine.
It is a defence to the section 7 offence for the commercial organisation to prove that it had in place "adequate procedures" designed to prevent persons associated with it from undertaking such conduct. The Bribery Act requires the Secretary of State to publish guidance about such procedures, and the first such guidance was published on 30 March 2011, in advance of the Bribery Act coming into force on 1 July 2011.
Adequate procedures - the six guiding principles
The Guidance issued by the Secretary of State for Justice in March 2011 is designed to be of general application and is formulated around six general principles, which provide a working framework for the creation of adequate (but not overly burdensome) policies and procedures.
- Proportionate procedures: A commercial organisation's procedures to prevent bribery by persons associated with it should be proportionate to the bribery risks it faces and to the nature, scale and complexity of the commercial organisation's activities. They should also be clear, practical, accessible, effectively implemented and enforced.
- Top-level commitment: The top-level management of a commercial organisation (be it a board of directors, the owners or any other equivalent body or person) should be committed to preventing bribery by persons associated with it. They should foster a culture within the organisation in which bribery is never acceptable.
- Risk assessment: The commercial organisation should assess the nature and extent of its exposure to potential external and internal risks of bribery on its behalf by persons associated with it. The assessment should be periodic, informed and documented.
- Due diligence: The commercial organisation should apply due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organisation, in order to mitigate identified bribery risks.
- Communication: The commercial organisation should seek to ensure that its bribery prevention policies and procedures are embedded and understood throughout the organisation through internal and external communication, including training.
- Monitoring and review: The commercial organisation should monitor and review procedures designed to prevent bribery by persons associated with it and should make improvements as and where necessary.
Ultimately, what counts as "adequate" will depend on the bribery risks faced by the commercial organisation and the nature, size and complexity of the business.
Territorial scope of the Bribery Act
Anyone may be prosecuted in the UK for the section 1, 2 and 6 offences if any act or omission which forms part of the offence takes place in the UK.
In addition, the UK courts will also have jurisdiction to prosecute such offences committed outside the UK where the person committing them has a "close connection" with the UK, by virtue of being a British national or ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership.
In relation to the corporate offence, provided the commercial organisation is incorporated or formed in the UK, or carries on a business or part of a business in the UK (wherever in the world it may be incorporated or formed) then the UK courts will have jurisdiction. The requirement of a close connection does not apply, and the commercial organisation can be liable for bribery on the part of a person who is neither a UK national or resident in the UK, nor a body incorporated or formed in the UK. It does not matter whether the acts or omissions which form part of the section 7 offence take place in the UK or elsewhere.
Combating the risks of bribery
Despite the fact that the Corruption Law has been in force in Jersey for some time, the recent implementation of the UK's Bribery Act has received great publicity and probably heralds the arrival of greater scrutiny on issues of bribery and corruption. Many individuals in Jersey will be subject to both the Jersey and UK statutes by virtue of their nationality, as will many commercial organisations in Jersey which carry on part of their business in the UK.
Whilst the Corruption Law contains no specific corporate offence, and therefore no defence of "adequate procedures", establishing effective anti-bribery and corruption policies and procedures in line with the UK Guidance will help to detect and prevent unscrupulous acts, reduce the risk of reputational damage and assist in defending any prosecution. There is also a growing trend for companies operating globally to seek to ensure that such standards are adhered to by all those with whom they contract.
Bedell Cristin offers clients a "healthcheck" of their anti-bribery and corruption procedures to ensure that they are fit for purpose.
 The extent of the customary law offence of bribery was uncertain, with the only recorded incidence thought to be PG v Langtry (1945) 31 PC 249. Despite the Corruption Law expressly abolishing the customary law offence of bribery, the Jersey Court of Appeal (surprisingly) held in Bhojwani v Attorney General 2010 JLR 78 that the customary law offence never in fact existed.
 The definition of advantage includes "any gift, any office, employment or contract, any dignity, any deferral, payment, release or discharge of any loan obligation or other liability whether in whole or in part, the exercise or forbearance from the exercise of any right, power or duty…"