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Bribery and Corruption - Research Repository

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FinancialRegulation: An Essential or IncidentalComponentin the Anti-CorruptionToolkit
Dr.Nicholas RyderProfessor in Financial CrimeDepartment of LawUWE21stOctober 2015
Introduction
DefinitionsWhat is the offence of bribery?The extent of briberyPolicy backgroundFinancial institutions and regulatorybodiesFinancial Conduct AuthoritySentencingand recoveryConclusions
Definitions
Bribery has been referred to asan:illegalgratuity,extortion,conflictof interest,kickback,corporateespionageandacommission or fee
Definitions
Organisationfor Economic Co-operation andDevelopment,bribery is definedas:‘the offering, promising or giving [of] something in order to influence a public official in the execution of his/her official duties’.Perhapsone of the simplest definitions, however, is offered by theSFO:‘giving or receiving [of] something of value to influence a transaction’.
Definitions
Briberycan be divided into two categories:directandindirect.Themore common of these two types is indirect,Usuallyconducted via an agent or a go-between.
Definitions
There are several differentstatutory definitions ofbriberyPublicBodies Corrupt Practices Act 1889,Preventionof Corruption Act1906,Preventionof Corruption Act1916 and theBriberyAct 2010
What is the offence of bribery?
Bribery Act 2010a person is guilty of an offence if he/she offers, promises or gives a financial or other advantage to another person in one of two possiblecircumstances (s.1)
What is the offence of bribery?
Bribery Act 2010is guilty of an offence under this section if he/she wishes, consents to, or accepts an advantage with the specific purpose that he/she will perform a relative function or activity improperly either by himself or by another person, or as a reward for such a performance (s.2)
What is the offence of bribery?
Bribery Act 2010aperson ‘(P)’ commits the offence of bribing a foreign public official ‘(F)’ if ‘P’s intention is to influence F in F’s capacity as a foreign public official’ (s.6)
What is the offence of bribery?
Bribery Act 2010Failureof commercial organisations to preventbriberya new form of corporate criminalliability (s.7)a commercial organisation can also be found guilty of an offence if a person associated with the organisation bribes another, intending to obtain or retain business or a business advantage for that organisation
The extent of Bribery
$1 trillion is paid in bribes on a worldwide basis eachyear (Pope and Webb, 2010)$30trillionis paid per year (World Bank)
Policy background
UK policy heavily influenced by:United Nations (UN),theEuropean Union (EU) andthe OECD.OECD Convention on Combating Bribery of Foreign Public Officials in International BusinessTransactions (1994)
Policy background
EU:Conventionof the European Union on the Fight againstCorruption (1995)Convention on the Fight against Corruption involving Officials of the European Communities or Officials of MemberStates (1997)UN:Convention againstCorruption (2003)
Policy background
The UKs reform of its bribery laws began with the publication of a Law Commission Report in 1998.TheLaw Commission recommended that ‘the common law offence of bribery and the statutory offences of corruption should be replaced by a modern statute’.
Policy background
The then Labour government responded by publishing a Corruption Bill, which was rejected,This was followed by another consultation exercise by the Law Commission in 2007, which subsequently led to the publication of its 2008 Report,Bribery Act 2010
Financial institutions and regulatory bodies
Twomain regulatory bodies that enforce the provisions of the Bribery Act2010:Serious Fraud Office (SFO) andtheFinancial Conduct Authority (FCA)The SFO enforce the criminal offences created by the Bribery Act 2010Firms authorised and regulated by the FCA are boundto comply with its anti-bribery provisions as set out in its Hand Book andit’s Principlesfor Business
Financial Conduct Authority
The FSA was given a statutoryobjectiveto reduce financial crime (Financial Services and Markets Act 2000, s. 6)Thecombinedthe efforts of financial regulation with those of criminal law intelligence, investigation and the prosecution agencies.Themain objectiveof theFSA was to ensurethat financial institutions havesystemsandpracticesin place to protect themselves against being used as vehicles by financial criminals.
Financial Conduct Authority
FCAauthorisedfirms have a regulatory obligation to put in place and maintain policies and processes to prevent bribery and corruption and to conduct their business with integrity.Firms have to demonstrate that they:Identify, assess and mitigate bribery and corruptionrisk andTake reasonable steps to prevent bribery and corruption riskcrystallising.
Financial Conduct Authority
The FCA’s powersapply in relationto:anti-briberyand corruption whereauthorisedfirms / FSMA-authorisedfirms fail to adequately address bribery and corruption risk,including, but not limited to, where these risks arise in relation to third parties acting on behalf of the firm.
Financial Conduct Authority
The FCA doesn’t haveto wait for a bribe to be paid or for evidence of a bribe to take action–The FCA will take actionagainst firms with deficient anti-bribery and corruption systems and controls irrespective of whether or not bribery or corruption has taken place.
Financial Conduct Authority
TheFCAunder this objective will aim to play a primary role in three main areas:money laundering;Fraud,or dishonesty, including financial e-crime and fraudulent marketing of investments; and criminal market misconduct, including insiderdealingBribery
Financial Conduct Authority
Financial Conduct AuthorityImpose financial penaltiesFinancial Services and Markets Act 2001 (s. 206(1)).Willis Limitedwere fined £6.8m forweaknesses in its anti-bribery and corruption systems andcontrols (July 2011)Aon Limited £5.25m (July 2011)Civil Recovery Orders (Proceeds of Crime Act 2002, s. 2A).
Sentencing and recovery
Smith andOuzmanLtdChristopher John Smith was convicted of two counts of corruptly agreeing to make paymentsSentenced to 18 months imprisonmentNicholas Charles Smith was convicted of three counts of corruptly agreeing to make paymentsSentenced to three years imprisonment
Sentencing and recovery
Sustainable Growth GroupGary Lloyd West sentenced to a total of 13 years' imprisonment.James Brunel Whale sentenced to a total of 9 years' imprisonmentStuart JohnStonewassentenced to a total of 6 years' imprisonment.
Sentencing and recovery
Yang Li – the failing studentAttempted to bribe his professor £5,000Carried a loaded air pistolSentenced to 12 months imprisonment
Sentencing and Recovery
MunirYakubPatel – the Magistrates Court Clerkworked atRedbridgeMagistrates' Courttook £500 to avoid putting details of a traffic summons on a court databaseHe admitted one count of briberysentenced to six yearsCourt of Appeal reduced the sentence to three years
Sentencing and Recovery
MawiaMushtaq–  the driving examineeHe was  successfully prosecuted for offering a bribeHe had failed a driving test before an Oldham Council licensing officer.Passing the test was necessary forMrMushtaqto obtain a taxilicence.MrMushtaqoffered £200 which was later increased to £300 if the result of the test was changed to a pass.The officer refused the bribe and the matter was reported to the police.
Sentencing and Recovery
R v Anderson (Malcolm John),[2003] 2 Cr. App. R. (S.) 28.R v FrancisHurell.[2004] 2 Cr. App. R. (S.) 23.
Sentencing and Recovery
Civil Recovery Orders (Proceeds of Crime Act 2002, s. 2A).Serious Crime Prevention Order(Part1 of the Serious Crime Act2007)

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Bribery and Corruption - Research Repository