THE GAME CHANGER – A NEW GENERATION BRIBERY LEGISLATIONS

Society can act with a variety of measures to influence all concerned stakeholders to contribute in the combat against corruption. The sharpest tool of them all is naturally the legislative instrument that enables authorities to clearly define and criminalize unwanted behaviour.

There are to date no supranational legislations in place, but several of the intergovernmental organisations such as UN, EU, etc, are putting pressure on there member states to develop end enforce more effective anti-bribery legislations. This has resulted in a number of new national legislations in several countries, which has sharpened the teeth of the authorities and has put new demands on corporations.

Almost all nations in the world have today legislations that criminalize corruption. There are however two national legislations that is setting a new scene for multinational corporations regardless of domicile. These are the US Foreign Corruption Practice Act (FCPA) and the UK Bribery Act (UKBA). The reason why these two legislations have such dominating roles is that both have very broad jurisdictions, combined with strict definitions on

corporations responsibility to prevent corruption. Both US FCPA as well as UKBA has very broad global jurisdictions, regardless of the corporations domicile. This means that every corporation, regardless of domicile, with any business connection to the US or UK can be held liable under these laws for any bribery conducted anywhere in the world.

The multinational corporations with Swedish domicile, or others doing business in Sweden, will naturally also be covered by the new Swedish Bribery legislation. This new legislation that came into force in 2012 does not have the same type of global jurisdiction as the US FCPA and UKBA, but have otherwise adopted similar provisions regarding the definition of the criminal offence.

These three legislations have a variety of differences between them but have one very important area of similarity, which is the general definition of the criminal offense based on carelessness. In most other legislation around the world the criminal offence regarding corruption and bribery is based on the aspect of intention, which means that the intentional use of corruptive practises when conducting a business is a criminal offence. A prosecutor need in these cases to prove that a bribe has been offered or given intentionally by the giving party, in order to prosecute, i.e. that the giving party knowingly gave the bribe to the receiving party. These types of provisions have had a very strong influence on the behaviour and methodology of corporations in connection to their business conduct. The business community have consciously or subconsciously adopted their behaviour to the principle; you can not be guilty of bribery if you dont know about it. The trick has been to make sure not to know about it. This can be achieved by letting someone else handle any potential bribe that might be needed to win the business, and we will be off the hook as long as nobody can prove that we knew about it. This is why the use of third parties such as agents, commissionaires, consultants, advisors or other types of intermediaries is regarded as the single most risk driving aspect of corruption in international business.

By changing the definition of the criminal offence to carelessness, the three new legislations (US, UK and Swedish) have completely changed the playing field of influencing the business communitys way of operating. The provisions that defines carelessness as the criminal offence has flipped around the burden of proof from the prosecutor to the corporation. In case the prosecutor can prove that a bribe has been transferred, then the corporation has to prove that they have not been acting carelessly. The corporation must be able to demonstrate that it has put in place adequate procedures to prevent corruption in its business. The methods previous adopted to protect from liability under the old legislations has now become the actual crime.

In principle, the corporations defence to legal liability is now depending on the establishment of a proportional and adequate Corruption Risk Management (CRIM) program, which is operationally implemented to prevent corruption - systematically, objectively and in good faith.

The enforcement of these new legislations is still to be fully understood once more presidential cases occurs in the future. US FCPA has a legal case history in place since it has been effective in its latest form since 1998, but the UKBA and the Swedish Bribery Law is still to new to have sufficient history of prosecutions and convictions. The guidelines published by the UK Ministry of Justice describe what is expected from corporations to prevent corruption and thereby fulfil the legal requirements. This together with guidelines published by UN, ICC and OECD, gives an overview of aspects that needs to be addressed and developed.