Into the guts of the Bribery Act
Corruption is a complex social, political and economic phenomenon that affects all countries, so said in November 2017 by the United Nations Office on Drugs and Crime Action against Corruption and Economic Crime.
Bermuda is not yet a signatory to the United Nations Convention Against Corruption, the only legally binding, universal anti-corruption instrument. However, there are many states that have signed up. Nicaragua and South Sudan, by way of two simple examples as signatories, have been assessed to have the highest perceived levels of public-sector corruption according to the Corruption Perceptions Index 2016 — published by Transparency International, which labels itself as the “global coalition against corruption”. The convention sets the right tone and standard to aspire to. All signatories, it may be argued, have the right intention, whatever else is said.
Bermuda has, though, passed its own legislation, moulded around the British legislation of the Bribery Act of 2010, namely, the Bribery Act 2016, which came into force in June 2017.
Bermuda has done this as a recognition not just of its obligations to its own citizens, but to the wider international community, paving the way to becoming a signatory to the UN convention in due course.
As is said in the official government guidance document of June 2017, it will help to enhance Bermuda’s international reputation for the highest ethical standards; it is part of a strategy to maintain the island’s status as a clean and reputable business jurisdiction.
This begs the question: “What is Bermuda’s reputation?”
By reference to some of The Royal Gazette’s own past reports, the public’s own perception is arguably such that it appears that confidence in standards is not all that high. Perhaps not all would agree with me; I may be wrong.
However if so, this undermines public confidence in the ethical standards of others in this small community; this would in its own right, if correct, be troubling, where typically, Bermudians know almost everyone else on the island — if not personally then by knowing someone else who does. Such a small community needs to hold its head up high in this regard and be confident that everyone got to where they got to — businesses, officials, etc — through merit. A good-enough reason, then, for promoting this law.
Detective Chief Inspector Nicholas Pedro on October 24, 2017 in the Gazette said “reports in recent years suggested corruption was more prevalent than had traditionally been the case”, but “was keen to emphasise that it is not as widespread as in many other countries”. He also said that “traditionally in Bermuda, corruption or bribery was limited only to public officials”. He said lastly that “priority will be given to alleged offences that could affect public confidence in the island’s legal system”.
Pedro said that “more than 40 criminal investigations involving money laundering, serious fraud and corruption were under way at the time of making his statement, involving individuals and businesses”.
The average Bermudian has probably heard enough about all this corruption stuff in The Royal Gazette over the past few months if not years, so why should any of it matter, as hardly any of it touches their lives? Why bother getting excited or concerned, let alone pay any interest?
Well it matters, for two reasons.
First because of the desire to be proud to be part of a society that is “walking the walk” as well as “talking the talk”. To live eat and breathe in the knowledge that all are equal in the eyes of the law, and we get where we get by merit and achievement and so does everybody else. A level playing field, in other words.
Second, it matters because business climate and attitudes to moneymaking forums can change; less investment here means fewer expatriates and workers from overseas taking up appointments and spending money earned here. It also means fewer jobs for Bermudians.
The US State Department Office of Investment Affairs’ Investment Climate Statement, published on October 14, 2014 within its Bermuda — Corruption Commercial Guide said: “Corruption, including bribery, raises the costs and risks of doing business. Corruption has a corrosive impact on both market opportunities overseas for US companies and the broader business climate. It also deters international investment, stifles economic growth and development, distorts prices and undermines the rule of law.”
Importantly, Bernews on June 8, 2017 reported former attorney-general Trevor Moniz as saying “taxpayers are defrauded, honest businesses suffer from unfair competition and a society’s economic and social development is undermined”. Who among honest and reasonable folk want that in their society?
Yes, it’s important therefore to everyone.
Less and less tolerance of achievement through enhanced means is evident; sportsmen and women taking drugs are the subject of scrutiny and sanction. This is the way the world is becoming these days: protective of minorities and promoting equality and fairness for all. Sport, an enormous generator of wealth globally is high-visibility; so now is business on every level. A culture of abhorrence of enhancing individual positions through bribery and corruption is no longer something that Bermudians can turn a blind eye to — if they ever did, that is to say.
The world of business is not exempt and Bermuda requires a level playing field for all at every level of society.
This new law is expected to bring about, so far as Pedro is concerned at any rate, “a change in mindset for the island”. All businesses are required to take positive steps and to give leadership from the top down. Those in management roles, “watch out” because it is your absolute obligation to ensure compliance and to have effective policies in place. If there is no policy in place, there will be no available defence.
If unsure of what must be done and if overwhelmed by the new obligations, each individual business must, without fail, take measures to prevent corruption through bribery. This is a statutory obligation and not an option, with failure attracting potential liability. Every business is different and should tailor its procedures to address the particular risks it has in its own marketplace.
The Government has published its guidance document on good practice and procedures for corporate anti-bribery programmes, which businesses are obliged to implement.
If in any doubt advice should be sought from qualified persons.
There has developed in all societies a desire to encourage whistleblowers for whom protections are given. Further to the tolerance, a positive legal duty exists in some cases to report on corrupt or unfair practices.
This Act makes it an offence for anyone to bribe anyone, or to receive a bribe, or to request one that includes gifts, donations, discounts and favouritism in employment.
In this light, therefore, no Bermudians are exempt. It is now almost considered a moral duty to report these practices, whereas it might have been the case for turning a Nelsonian “blind eye”. Not any more.
Happily and finally, in Bermuda, many good steps have been taken with a series of laws, regulations and penalties to combat corruption and, generally speaking, according to the statement by the US State Department’s Office of Investment Affairs, “positively enforces them ... [examples are] ... the Good Governance Act 2012, the Bermuda Criminal Code and the Proceeds of Crime Act, and in order to distance itself from perceived impropriety often associated with offshore banking centres, Bermuda continues to update its regulatory framework to meet international standards.
“In response to the Panama Papers in the spring of 2016 (in which Bermuda was not significantly featured), Bermuda announced that it would provide faster access to the UK’s National Crime Agency to Bermuda’s longstanding registry of ownership of companies”.
Hitherto the focus of concern, if I have understood correctly, has been the conduct and activities of public officials. There is no evidence that any reference by Pedro to the legal system generally is focused on any particular concern or derived from the conduct of legal practices themselves.
In Transparency International’s document, Assessment of Key Sectors, first published in June 2011, and its assessment of legal profession corruption risks, this was said: “There are few recorded examples of corruption in the UK legal profession — and very little evidence to suggest that the UK legal profession is being targeted by organised criminals to the extent that happens in other countries ... it would appear from this evidence that corruption in the legal profession is infrequent and is neither systematic nor organised.”
It would appear that the same broad considerations might well or should apply to Bermuda, and Pedro’s concerns as identified above might well therefore have applied to concern rooted in criminal proceedings and the same issues raised in the same report, such as “avoiding pre-trial detention, delaying court action, influencing trial outcomes, leaking information to criminals about ongoing investigations”, rather than to the profession as a whole.
That much has to be surmised from the available evidence, as nothing more specific was mentioned by Pedro.
To date in Bermuda, only once in 1989, is there evidence concerning “kickback” payments in the private sector. The results were fines of $5,000 and $1,500 for the respective defendants, or $10,000 and $3,000 respectively, in today’s money.
The maximum penalties under the Bribery Act 2016 [section 16] are, for an individual, on summary conviction, a fine not exceeding $500,000 or ten years’ imprisonment, or both, and on indictment, an unlimited fine or imprisonment for a term of 15 years, or both. Any other person on summary conviction is liable to a fine not exceeding $500,000, or on indictment, to an unlimited fine.
The above serves to illustrate the seriousness of the offending, such are the levels of penalty available to the court.
• Joseph Giret QC has worked for Wakefield Quin since his arrival in Bermuda at the beginning of October 2017. He is ranked as a Band 1 silk in Britain for commercial law and has been recommended in a number of legal directories including the Legal 500
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