New Irish Anti-Corruption Legislation
Corporate Liability & Penalties for Irish Companies Connected to Corrupt Individuals
The Criminal Justice (Corruption Offences) Act 2018 (the "Act") came into force on 30 July 2018. The Act consolidates Irish law on bribery and corruption and introduces tougher penalties and new offences such as corporate liability, meaning a company may now be guilty of an offence if anyone acting on its behalf is found guilty of corruption.
Expected to have a significant impact on corporates and other organisations operating in Ireland (including investment firms and fund management companies), the Act implements recommendations of the Mahon Tribunal Report and is one of several measures proposed by the Government in its White Collar Crime Package announced in November 2017.
National and Global Scope of the Act
The Act applies to individuals, companies, voluntary bodies, Irish1 and foreign2 officials including officers, directors and of Irish public and semi-state bodies, making it much broader than historic legislation addressing bribery and corruption.
Irish officials and citizens (including individuals resident in Ireland for 12 months), Irish companies or body corporates and, in certain circumstances, EU officials may also be liable for offences committed outside the State where the act in question would constitute an offence if committed in the State.
Concept of 'Corruptly' and 'Bribe'
The term 'corruptly' is used in determining what an offence is under the Act. It is defined non-exhaustively as including acting with an improper purpose personally (e.g. by making false/misleading statements or withholding information) or by influencing another person.
A 'bribe' is referred to as 'a gift, consideration or advantage' to a person as an inducement to, or reward for, or otherwise on account of, any person doing an act in relation to his or her office, employment, position or business. A bribe can be given or received directly or indirectly, alone or with another person. The bribe does not need to be actually given or received to fulfil the offence as offering, agreeing to give or requesting are also specified as being offences.
Implications for Companies
Unless it can be shown that it took 'all reasonable steps and exercised all due diligence to avoid the commission of the offence', a body corporate shall be liable in circumstances where its: (a) director, manager, secretary, officer (or persons purporting to act in that capacity); (b) shadow director; or (c) employee, agent or subsidiary, commit corruption offences with the intention of obtaining or retaining business for the body corporate or an advantage in the conduct of business for the body corporate.
Implications for Corporate Managers
Where an offence under the Act is committed by a body corporate and it is proved that the offence was committed with the connivance, or was attributable to any wilful neglect, of a person who was a director, manager, secretary or other officer of the body corporate (or a person purporting to act in that capacity) that person shall be guilty of an offence.
Summary of Corruption Offences
Active and Passive Corruption
Active (bribe-giving) and passive (bribe-taking) corruption.
Active and Passive Trading in Influence
The active bribery of a person / passive bribery by a person who asserts that he or she can exert an improper influence over a public official's decision making.
Corruption in Relation to Office
Where an Irish official does an act in relation to his or her office, employment, position or business or uses confidential information obtained in the course thereof for the purpose of corruptly obtaining 'a gift, consideration or advantage' for himself or any other person.
Bribery to Facilitate Offence Under the Act
The giving of 'a gift, consideration or advantage' to another person, where the giver knows (or ought reasonably to know) that it will be used to facilitate the commission of an offence under the Act.
Creating or Using False Documentation
The creation or use of a document3 which that person knows or believes to contain a statement which is false or misleading provided that the creation or use of such document was carried out with the intention of inducing another person to do an act in relation to his or her position which prejudices him / her or anyone else.
Where a person threatens harm4 to another person with the intention of corruptly influencing that person or another person to do an act in relation to the person's office, employment, position or business.
Presumption of Corruption
If it is proved that an Irish official or a foreign official has been given a 'gift, consideration or advantage' by a person with an interest in the function of the official, there is a presumption that it has been given and received corruptly as an inducement or reward for the official acting in relation to those functions.
A company will be liable on summary conviction to a fine of €5,000 and on indictment, there is no limit to the amount of the fine.
A person will be liable on summary conviction to a fine of €5,000 and / or 12 months imprisonment, and on indictment there is no limit to the amount of the fine and a person may also be subject to imprisonment for up to 10 years.
Time to Act
We would recommend that companies take the following actions in order to mitigate their risk:
(a) establish clear and comprehensive gift / entertainment and anti-corruption policies;
(b) train staff on these policies, including how to recognise and deal with suspected bribery; and
(c) maintain gift / entertainment registers.
1 'Irish official' means, in summary, a member of Dáil Éireann, Seanad Éireann or the European Parliament representing Ireland or any person employed by or acting for or on behalf of the public administration of the State
2 'Foreign official' means, in summary, a member of the government or parliament of any other state, a member of the European Parliament other than a person who is such a member by virtue of the European Parliament Elections Act 1997 or any person employed by or acting for or on behalf of the public administration of any other state
3 Note "document" is defined as anything in print (including electronically); maps, plan or drawings; transmission or storage devices (e.g. films, discs or tape) or copies thereof
5 Being any loss, disadvantage or injury