knowledge 29 October 2019 |

Disputes – Investigations and White Collar Crime: Ireland’s new Anti-Corruption Law Reviewed

The Criminal Justice (Corruption Offences) Act 2018 (the “2018 Act”) entered into force in July 2018. Amongst its objectives, the 2018 Act is intended to give effect to the OECD Convention on Combating the Bribery of Foreign Public Officials in International Business Transactions (the “Convention”).

The OECD Working Group on Bribery (the “WGB”) has recently carried out a review of the 2018 Act to see if it complies with the Convention and if it fully implements certain recommendations previously made to Ireland here. These recommendations focus on the:

• criminalisation of the bribery of foreign public officials;
• liability of legal persons for such bribery; and
• application of Ireland’s money laundering offence to the proceeds of foreign bribery when the foreign bribery offence takes place abroad.

Foreign Bribery Office

 The WGB was satisfied that Ireland has fully implemented its earlier recommendation on the amendment, consolidation and harmonisation of two overlapping foreign bribery offences. However, in relation to the practical implementation of the new foreign bribery offence, it marked out a number of issues for future review.

First, the section 5(1) corruption offence in the 2018 Act does not establish an autonomous offence of the bribery of foreign public officials. Instead, it prohibits the bribery of “a person” “on account of, any person doing an act in relation to his or her office, employment, position or business”. While this is intended to be broad enough to encompass the bribery of foreign officials as required by Article 1 of the Convention, the WGB observed that this legislative technique has not been previously used by other parties to the Convention.

Secondly, the WGB noted that section 5(1) requires proof of a corrupt intent. Although other sections of the 2018 Act set out a presumption of a corrupt intent in certain situations where a bribe has been given to a foreign public official, it said it was as yet unclear how these provisions will be applied in practice.

Corporate Bribery Offence

Article 2 of the Convention requires that all legal persons be held responsible for foreign bribery. In turn, the 2018 Act creates a new bribery offence for “bodies corporate”. The WGB said that it will monitor the application of this new provision to foreign bribery cases involving branch offices and limited partnerships to see if it is effective against those entities in practice.

The 2018 Act goes on to provide a defence for bodies corporate if they prove they “took all reasonable steps and exercised all due diligence to avoid the commission of the offence”. The WGB commented that this type of defence was not foreseen in 2009 OECD recommendations in the area. It notes that the criteria for the defence are not explained in the 2018 Act and to date have not been interpreted by the courts. This means that it is as yet unclear to what extent this defence might affect compliance with those 2009 recommendations.

Finally here, the WGB points out that although the 2018 Act creates the new corporate bribery offence, under section 5(1) of the Act it also maintains the common law identification theory of liability of bodies corporate. That section refers to corrupt activity by a “person” which under Irish law includes a reference to a body corporate.  In response, the Irish authorities have emphasised that it is expected that prosecutors will prioritise the use of the new corporate bribery offence over the common law and section 5(1). The WGB awaits clarity here, as there are as yet no practical examples to draw on.

Money Laundering

The 2018 Act inserts a new definition of “criminal conduct” into the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010. This now includes conduct occurring outside Ireland that would constitute an offence under the section 5(1) corruption offence or the 6(1) trading in influence offence, if it occurred in Ireland and the person concerned is a foreign official within the meaning of the 2018 Act.

The WGB notes that previously, in certain circumstances, it was not an offence to launder in Ireland, the proceeds of bribing a foreign public official where the bribery occurred outside Ireland. It is satisfied that the 2018 Act fully implements its previous recommendation to amend the money laundering offence in order that it is always an offence to launder the proceeds of foreign bribery.

Comment

This recent review shows the significant progress made by Ireland to combat bribery and corruption in compliance with its international obligations. However, as yet, the 2018 Act remains a relatively new and untested piece of legislation and its success in practice may only emerge over time.

Our Investigations and White Collar Crime Team have significant experience in advising clients on a variety of issues in and around anti-bribery and corruption and would be pleased to provide further information. Alternatively, your usual contact in McCann FitzGerald would be happy to assist.