Out-Law News | 25 Jun 2018 | 11:36 am | 4 min. read
The Criminal Justice (Corruption Offences) Act 2018 (2018 Act) was signed into law by the Irish president, Michael D Higgins, on 5 June 2018. It has not yet been announced when the legislation will come into effect, but it is anticipated to be soon.
Once in force, the 2018 Act will have significant implications for both Irish businesses and UK and other non-Irish businesses operating in Ireland. It introduces a number of new offences, as well as expands the scope of Irish anti-corruption laws beyond bribery of public officials to businesses operating across all sectors. It also introduces severe new penalties.
What offences are created by the 2018 Act?
The 2018 Act criminalises both 'active' and 'passive' corruption, broadly corresponding to the offering and accepting of a bribe. It also criminalises active and passive 'trading in influence', which is to do with promising an undue advantage to someone who claims to be able to exert improper influence over the decisions of a public official.
These offences apply regardless of whether the alleged ability to exert improper influence existed, or whether the supposed influence led to the intended result.
The Act also creates a number of new offences targeted at Irish public officials. It will criminalise any act of an Irish public official carried out in the course of their official position with the intent of corruptly obtaining an advantage for a third party, regardless of whether or not a third party was involved. It will also criminalise the use of confidential information obtained by a public official through their office for a corrupt purpose.
Can a company be guilty of an offence under the 2018 Act?
A company will be guilty of an offence under the 2018 Act if the offence is committed by an officer, employee, agent or subsidiary of the company, and the offence was committed with the intention of obtaining or retaining business or any business advantage for the company.
The individual who committed the offence will also be personally criminally liable under the Act, and officers of the company may also be personally criminally liable. The majority of offences under the 2018 Act carry a maximum penalty of ten years in prison and an unlimited fine.
This means that the same wrongful act may be prosecuted on three different fronts: the individual who undertook the wrongful act; the officer of the company who consented to the act or who was wilfully negligent; and the company itself.
Does a company have a defence?
A company will have a defence against corruption proceedings brought against it if it is able to prove that it took all reasonable steps and exercised all due diligence to avoid the commission of the offence. This defence is similar to the 'adequate procedures' defence available to UK companies under the 2010 Bribery Act (UK Act).
There is no Irish-specific guidance yet available on when the defence will apply. However, Irish businesses may refer to guidance provided by the UK Ministry of Justice as a helpful starting point for developing policies and procedures which will support the defence if it is ever needed. The UK guidance sets out six principles around which anti-corruption policies can be based:
How else does the 2018 Act reflect the UK position?
There are many similarities between the 2018 Act and the UK Act. Both contain offences of active and passive bribery and bribery of foreign officials, and both contain similar penalties and defences. However, there are two significant points of difference to be aware of:
The defence available to companies under the 2018 Act and the UK Act is also worded slightly differently, as set out above. From a practical perspective, however, if a UK company has robust anti-bribery procedures in place which are sufficient so as to allow it to rely on the UK 'adequate procedures' defence, it is likely that it will also be able to rely on the 'all reasonable steps/due diligence' defence under the 2018 Act if it implements the same procedures in its Irish business.
How might the 2018 Act impact UK businesses and other businesses operating outside Ireland?
The 2018 Act purports to have extra-territorial effect on both companies and individuals if three conditions are met:
Of course, companies and individuals will also be subject to the anti-corruption legislation of the countries in which they are operating. For example, if an Irish company operating in the UK carries out a corrupt act which is an offence under the UK Act as well as under the 2018 Act, then it could be prosecuted under both pieces of legislation for the same corrupt act.
Dermot McGirr is a white collar crime expert at Pinsent Masons, the law firm behind Out-Law.com. A version of this article first appeared on LexisPSL.