Bribery And Anti-Corruption Laws
๐ Overview: Bribery and Anti-Corruption Laws
Bribery and corruption involve the abuse of entrusted power for private gain. These acts undermine governance, distort markets, and erode public trust. Anti-corruption laws are designed to criminalize and prevent such misconduct.
๐ Key Elements of Bribery and Corruption
Offer or receipt of undue advantage (money, gift, favor).
Intent to influence the actions of an official or a person in power.
Quid pro quo โ expectation of return in exchange.
Public and private sectors can both be involved.
๐งโโ๏ธ Major International Anti-Corruption Frameworks
United Nations Convention Against Corruption (UNCAC)
OECD Anti-Bribery Convention
U.S. Foreign Corrupt Practices Act (FCPA)
UK Bribery Act 2010
๐งพ Key National Laws
| Country | Law Name |
|---|---|
| USA | Foreign Corrupt Practices Act (FCPA) |
| UK | UK Bribery Act, 2010 |
| India | Prevention of Corruption Act, 1988 |
| Australia | Criminal Code (Division 70) |
| China | Anti-Unfair Competition Law |
| Nigeria | Independent Corrupt Practices Commission Act |
๐งโโ๏ธ Landmark Case Laws (Detailed)
1. U.S. v. Siemens AG (2008) โ Foreign Corrupt Practices Act (FCPA)
Jurisdiction: United States
Facts:
Siemens AG, a German engineering giant, was found to have engaged in systematic bribery of foreign officials across various countries to win public contracts. Over $1.4 billion in bribes were paid through complex schemes including slush funds and off-the-books accounts.
Issues:
Violations of the FCPAโs anti-bribery and accounting provisions.
Held:
Siemens paid $800 million in combined fines to the U.S. DOJ and SEC.
The company also paid hundreds of millions in Germany.
Significance:
One of the largest global anti-corruption settlements.
Emphasized corporate accountability and the need for internal compliance systems.
2. UK Serious Fraud Office v. Rolls-Royce (2017) โ UK Bribery Act 2010
Jurisdiction: United Kingdom
Facts:
Rolls-Royce admitted to paying millions in bribes to secure contracts in countries like India, China, Indonesia, and Nigeria. These included payments through intermediaries to government officials and state-owned entities.
Issues:
Bribery of foreign officials under Section 6 of the UK Bribery Act.
Failure to prevent bribery under Section 7.
Held:
A Deferred Prosecution Agreement (DPA) was reached.
Rolls-Royce paid ยฃ497 million in penalties in the UK, plus fines in the U.S. and Brazil.
Significance:
A landmark use of DPA under the UK Bribery Act.
Demonstrated how enforcement agencies cooperate internationally.
3. State of Maharashtra v. Som Nath Thapa (1996) โ India: Prevention of Corruption Act
Jurisdiction: India
Facts:
This case involved army officers accused of accepting bribes for favoring certain parties in the allocation of army supplies and contracts.
Issues:
Whether framing of charge requires full proof of bribe or prima facie case is enough under the Prevention of Corruption Act, 1988.
Held:
Supreme Court held that at the stage of framing charge, the court need not conduct a mini-trial.
If a prima facie case of corruption is made, trial must proceed.
Significance:
Clarified evidentiary threshold at pre-trial stage in corruption cases.
4. Commonwealth v. Musharraf Rasheed (Pakistan) โ NAB Ordinance
Jurisdiction: Pakistan
Facts:
Musharraf Rasheed, a senior customs officer, was accused of acquiring wealth beyond known sources of income, a violation under the National Accountability Bureau (NAB) Ordinance.
Issues:
Whether unexplained wealth constitutes a presumption of corruption.
Held:
The court held that failure to explain disproportionate assets amounts to corruption under the ordinance.
Burden of proof shifts to the accused once initial prosecution threshold is met.
Significance:
Reinforced the legal presumption against public servants holding disproportionate assets.
5. U.S. v. Jeffrey Tesler (2012) โ Bribery in Nigeria LNG Contracts
Jurisdiction: United States (FCPA)
Facts:
Jeffrey Tesler, a UK lawyer, helped channel over $132 million in bribes to Nigerian officials to secure LNG (liquefied natural gas) contracts for a consortium of multinational companies including Halliburton.
Issues:
Bribing foreign officials through third parties under FCPA.
Held:
Tesler pleaded guilty and was sentenced to 21 months in prison.
Over $149 million forfeited.
Significance:
Highlighted that intermediaries and consultants can be liable under FCPA.
Reinforced that both individuals and companies face penalties.
6. Regina v. Skansen Interiors Ltd (2018) โ UK Corporate Bribery
Jurisdiction: United Kingdom
Facts:
Skansen Interiors, a small refurbishment company, was prosecuted under Section 7 of the UK Bribery Act for failing to prevent bribery by its employee, even though the company had no active compliance measures.
Issues:
Can a small company be liable for not having anti-bribery procedures?
Held:
Company convicted.
No financial penalty as the company had ceased trading.
Significance:
First contested trial under Section 7.
Clarified that size of a company does not excuse lack of anti-bribery compliance.
๐งญ Key Takeaways
| Principle | Explanation |
|---|---|
| Strict Liability for Companies | Especially under the UK Bribery Act (Section 7), a company can be liable even without direct knowledge. |
| Global Jurisdiction | FCPA and UK Bribery Act have extraterritorial application. |
| Burden of Proof | In some jurisdictions, unexplained wealth can shift the burden to the accused. |
| Use of Intermediaries | Engaging third parties to offer bribes is still prosecutable. |
| DPAs & Corporate Settlements | Deferred Prosecution Agreements allow large fines without trial, focusing on future compliance. |
๐ก๏ธ Preventive Measures for Corporations
Robust anti-bribery policies
Due diligence on third parties
Training and compliance audits
Whistleblower mechanisms
Clear accounting and documentation
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