Are compliance programs a mitigating factor to reduce/eliminate liability for bribery offences in your jurisdiction? Please identify any guidance indicating what features a compliance program should have in order to provide an effective defence/mitigation.
Bribery & Corruption (2nd edition)
Yes. In accordance with the Anti-Unfair Competition Law amended in 2017, the acts of bribery committed by the employee of a company shall be deemed as the conducts of the company, unless it has evidence to prove that such acts of the employee are irrelevant to seeking for transaction opportunities or competitive advantages for the company. However, no specified regulations or judicial interpretations regarding what evidence would be most valid have been made available. In practice, some multinational and local companies have already implemented compliance projects and preventative measures such as providing regular compliance trainings and requiring employees’ written compliance commitment letters in preparation for any potential legal liability concerns. Furthermore, it has been suggested by the former State Administration for Industry and Commerce (“SAIC”) in a press conference in November 2017, that if the business operator has set up measures that are legitimate, in compliance and reasonable, and has adopted effective inspection on the implementation, the company could be relieved from the legal liabilities. And so far, there is no further guidance provided by the new State Administration for Market Regulation (“SAMR”). Therefore, we would strongly recommend that companies continue their efforts in this regard.
From a strict legal standpoint, French law does not provide for compliance programs as a mitigating factor, and thus does not set out specific guidance to that effect.
Nevertheless, in practice, the existence of a robust compliance programs may be taken into account by criminal jurisdictions in order to appreciate criminal liability and/or sanctions. For instance, the recent settlement between the PNF and the French bank Société Générale, dated 24th May 2018, mentions that the bank provided evidence that it had been substantially and continuously improving its compliance program since 2000. Although no express credit was given to the bank for it, this mere mention indicates that it was probably favorably taken into account by judicial authorities.
Relevant guidelines published by the AFA may serve as a useful indication to set up adequate compliance programs (see 13.).
The existence of compliance programs is neither mandatory nor a defence. However, the existence of a compliance program can have a major impact on the sentencing of an individual person. In specific cases an effective compliance program can also eliminate a representative’s culpability for organisational fault. In addition, it may have a positive effect on the fine a company has to pay for bribery offences committed by their representatives according to sections 30 (1), 130, of the Administrative Offences Act (Ordnungswidrigkeitengesetz). If a fine can be imposed according to section 30, the significance and dimension of the offence has to be taken into account, especially any circumstances that may prove a company’s general criminal attitude or the lack of it. In this case it is important that the compliance program can provide helpful examples to outline the existence of a general criminal attitude.
Although not specifically provided for in the legal framework governing corruption offences, the existence of a proper compliance program may serve as a mitigating factor or even a defence to reduce/eliminate liability. A compliance program may be used to argue and/or prove that there is compliance of the entity to its legal obligations and argue on the degree of liability, which would result to sanctions on the lower side of the above provisions.
In the event of a prosecution, a company’s compliance program and anti-corruption policies and procedures are likely to come under intense scrutiny and may prove critical where a company is seeking to rely on the defence that it took all reasonable steps and exercised all due diligence to avoid the commission of the relevant offence.
Companies should ensure that, at a minimum, the follows steps are taken in order to minimise the risk of conviction:
- Put in place clear and comprehensive anti-corruption policies and/or review existing policies already in place;
- Ensure all personnel receive training on the said policies and are aware of their obligations pursuant to the policies and how to recognize and deal with suspected bribery;
- Discuss and review the ongoing effectiveness of the policies and procedures at an appropriate level within the organisation (e.g. compliance or Board level);
- Appoint a compliance manager with day-to-day responsibility for implementing the policies, monitoring their use and effectiveness and updating them as necessary;
- Keep a written record of any gifts or entertainment given or received in order to ensure transparency;
- Communicate your organisation’s zero-tolerance approach on bribery and corruption to third party service providers, suppliers and other organisations with which you do business.
Compliance programs (to the extent that they are adopted according to article 6 of Legislative Decree no. 231, dated 8th June 2001) are indeed a mitigating factor to reduce or eliminate liability of companies whose directors or employees have performed bribery crimes. In particular, a company might be exempted from liability if it proves that:
- prior to the commission of the crime, the board of directors has adopted and put into effect a compliance program suitable to prevent crimes of the kind of the committed one;
- the task of monitoring the observance of the compliance program and its effectiveness, as well as its updating, has been entrusted to an internal body with independent powers of control, the so-called ‘Vigilance Body’;
- those who committed the crime acted by fraudulently eluding the compliance program; and
- the above-mentioned Vigilance Body did not fail to monitor nor was such monitoring insufficient.
In case a company has failed to perform the said activities and one of its directors or employees has committed a bribery crime, a mitigating factor (which can lead to a reduction of the imposed penalties) might consist in the adoption and implementation – before the opening of the trial – of a compliance program suitable to prevent crimes of the kind of the committed one.
With particular regard to bribery offences, article 25, par. 5 bis of Legislative Decree no. 231, dated 8th June 2001, as recently amended by the Law no. 3, dated 9th January 2019, introduces some leniency provisions, ensuring a reduced duration of the disqualifying measures if the company, before the first-instance verdict, has effectively taken action to:
- prevent the criminal activity from being brought to further consequences;
- secure the evidence of the offences and to identify the persons who committed the same;
- ensure the seizure of the transferred money (or other benefits);
- eliminate the organisational inadequacies that led to the crime by means of the adoption and implementation of a compliance program suitable for preventing crimes of the kind of the committed one.
Some guidance indicating the features a compliance program is supposed to have is provided by the ANAC as well as by private organizations and trade associations, also with the involvement of the Ministry of Justice.
The impact of the compliance programs is not regulated by the Belgian Criminal Code. However, a legal entity can put forward, as part of its defence, that it has a compliance program in place. The legal entity will then have to show it has compliance guidelines and procedures in place but also that they are effective. Therefore, it is advised that a legal entity also has operational anti-bribery and anti-corruption structures in place, such as: financial means and competent personnel to implement these guidelines and follow-up on (the respect of) the compliance procedures, means of verifying/audit, etc. Such programs and structures might however, depending on the specific circumstances of the case, still be insufficient to escape conviction.
There is no statute that explicitly provides that compliance programs should be considered as a mitigating factor to reduce or eliminate criminal liability for bribery offences in Japan.
According to the Code of Criminal Procedure (CCP), prosecutors may not prosecute if prosecution is deemed unnecessary considering the character of the suspect, his/her age and circumstances, the gravity of the offence, his/her situation after the offense and so on. The provision can be applied to corporate entities treated as suspects based on a dual liability provision.
Thus, in a decision where prosecutors apply Article 248 of the CCP, the compliance program of a corporate entity that is a suspect in an investigation may be a mitigating factor and reduce or eliminate liability for bribery offences if the implemented programs have been effectively promoted and managed.
The METI Guideline was created ‘to support companies involved in international commercial transactions to voluntarily take a preventive approach to the prevention of bribery of foreign public officials’ and contains specific information concerning compliance programs for countering bribery of foreign public officials.
A public or private entity is required under the Bribery Act to put in place procedures appropriate to its size and the scale and to the nature of its operations for the prevention of bribery and corruption. In the event that the private entity fails to put in place the procedures and the failure was committed with the consent or connivance of a director or senior officer of the entity, the said director or senior officer commits an offence under the Act. The Cabinet Secretary being responsible for matters relating to justice is required, in consultation with the EACC, to publish guidelines to assist private and public entities in the preparation of these procedures. No such guidelines have been issued since the Bribery Act came into effect in January, 2017. EACC may also provide assistance as may be necessary to any private or public entity or any other person in the implementation of procedures issued under the Bribery Act.
A compliance program will not eliminate liability for a bribery offence but may serve as a mitigating factor in determining whether to bring charges against the corporate entity and in how to settle a matter. In corporate settlements, the quality of the compliance program can influence the form of the settlement (i.e., as a non-prosecution agreement, deferred prosecution agreement or guilty plea), the quantum of financial penalty and the type of remedial requirements, including among other things whether to require an independent compliance monitor. Guidance has been issued to address hallmarks of an effective compliance program. DOJ and SEC, A Resource Guide to the US Foreign Corrupt Practices Act at 53 [2012, updated 2015]; FCPA Corporate Enforcement Policy [March 2019].
Yes, Article 25 of the LGRA expressly provides that having compliance programs may reduce the corresponding liability of the corporate entities, provided that such programs include, among others: (i) organisational manual/handbook clearly describing the functions and responsibilities of their areas and command chains, (ii) a code of conduct duly published and available to all members of the entity, (iii) adequate and effective control, monitoring and auditing systems in order to verify the compliance with integrity standards, (iv) adequate and effective complaint systems, (v) training systems and procedures, (vi) transparency mechanisms.
Additionally, as a general rule, the fact that corporate entities or business organizations implement or adopt robust internal compliance programs, control mechanisms, policies and guidelines, inter alia, may be taken into account by a judge as a merit or an attenuating factor to reduce the penalty or sanction to be imposed for a criminal offence.
Finally, as guidance, the Ministry of Public Service issued the Model of Corporate Integrity Program (Modelo de Programa de Integridad Empresarial). This guideline was issued in collaboration with the United Nations Office on Drugs and Crime and the United Nations Development Program. The purpose of this guideline is supporting companies to implement the provisions of article 25 of the LGRA and develop their own compliance programs.
The Decree No. 8,410 of 2015 determines that the existence of an effective compliance program is a mitigation factor for the calculation of the applicable penalties. The prosecuting committee will examine in accordance to the parameters determined by the same Decree and may reduce the pecuniary penalty from 1% to 4%.
Note that, as previously mentioned, the pecuniary fine ranges from 0.1% to 20% of the offending entity’s gross revenues in the fiscal year prior to the initiation of the enforcement proceedings.
Prosecutions for corruption usually focus on individuals rather than corporates, although under New Zealand law it would be possible to prosecute a corporation for a corruption offence. The existence of a corruption programme within a corporation would not eliminate or reduce the risk of a successful conviction. It may be a relevant consideration in sentencing, although it a compliance programme has been ignored within a corporation, then this is likely to be an aggravating factor for the defendant concerned. See further in question 12 below.
Examples in case law show that compliance programs may have a mitigating effect on sentencing. However, no general, clear-cut rule can be inferred from case law, and there is no general statutory rule of leniency, e.g. the UK Bribery Act.
Compliance programs are not regulated by the law, nor are they even defined by it. Therefore, there is no official guidance indicating their features.
In the national framework, compliance programs alone cannot eliminate the liability for bribery offences and, with respect to natural persons, they cannot even constitute a mitigating circumstance.
However, with respect to corporate entities, it may represent judicial mitigating circumstances. Judicial mitigating circumstances are not mandatory by law, being at the sole appreciation of the judge, who may decide, based on the circumstances of the case, whether a compliance program can be considered a mitigating circumstance or not.
In this matter, the judicial practice is not sufficiently developed in order to identify generally applicable criteria for establishing whether a compliance program could provide an effective mitigating circumstance.
As discussed above, there is no formal "adequate procedures" defence in Singapore to reduce or eliminate liability for bribery offences on account of the implementation of a compliance program.
That being said, where there is an effective anti-bribery compliance program in place, this may be a mitigating consideration for prosecutors in deciding whether to commence criminal proceedings and/or for the courts at sentencing stage.
The new Deferred Prosecution Agreements (DPA) scheme may also allow companies to highlight effective anti-bribery compliance programs as part of their negotiations on any DPA to be entered into with the Attorney-General’s Chambers (AGC). A DPA is a voluntary alternative in which a prosecutor agrees to grant amnesty in exchange for a defendant agreeing to fulfil certain requirements and specific conditions, such as, for example, co-operating in investigations into wrongdoing by individuals. For now, there are no publicly-available guidelines on when the AGC will enter into a DPA with a corporate entity.
Yes, see questions no. 12 and 13 below.
It is a defence for an organisation to prove, on the balance of probabilities, that it had “adequate procedures” in place to prevent bribery. The UK Ministry of Justice has issued guidance on procedures that commercial organisations can put into place to prevent persons associated with them from bribing (see question 13 below).
It is also a criminal offence for a company to fail to prevent a person associated with it from facilitating tax evasion. Similar to the corporate bribery offence, the company will have a defence if it had prevention procedures in place which were “reasonable in all the circumstances” to prevent the criminal facilitation of tax evasion. It will also be a defence if it was not reasonable to expect the company to have any prevention procedures in place.
Neither the Criminal Code nor the CFPOA expressly require Canadian multinational corporations to engage in anti-corruption or anti-bribery compliance programs or, by extension, the required content of such programs. While the legislation still does not require compliance programs, the justice system has shown leniency to entities that make good faith attempts to remain compliant with the CFPOA.
Nonetheless, several training initiatives have been developed to assist multinational corporations in developing best practices, in accordance with anti- bribery legislation and may be taken into account by law enforcement. Existing jurisprudence suggests that an effective anti-corruption program is one that is endorsed and enforced by management, designed to address the unique circumstances of a company and is routinely reviewed to ensure that it continues to address the company’s specific risks adequately. A compliance program typically addresses the following key topics:
- responsibilities for compliance;
- internal controls, auditing practices and documentary policies;
- internal reporting mechanisms;
- enforcement and disciplinary procedures;
- training and education; and
- regular maintenance and review.
Yes: compliance programs can contribute to reduce/eliminate liability for bribery offences.
Legal persons are held liable for acts of bribery committed in their name or in their interest. But such liability is excluded when the legal person demonstrates that the agent of bribery acted against explicitly orders and instructions namely written rules and other corporative regulation.
Any compliance program must establish clear instructions, prohibiting any sort of offers to public officials that are intended or may appear to intend to influence in any way the performance of said public official.
Offering a bouquet of flowers or season’s greetings cards are examples of what may be considered acceptable.
Having a compliance program in place is not enough by itself to exempt a legal person from liability, although concurring with the other 2 conditions described in the previous answer, it may be considered by courts to except legal persons from punishment.
Besides, according to Section 8 of Law 27401, to graduate the penalty, courts will take into account the internal proceedings of the legal entity, the omission of vigilance over the activity of the authors and participants, and if a company spontaneously reported irregularities revealed by an internal investigation.
Under Sections 22 and 23 of Law 27401, to be considered adequate, a compliance programme must:
- Be appropriate to the specific risks of the activities, size, and economic capacity of the legal entity;
- Include a Code of Ethics, and internal policies to prevent crimes in any interactions with the public sector, and
- Lay out periodic training on the Compliance Programme to directors, administrators and employees.
Additionally, the programme may contain the following elements:
- A periodical analysis of risks and consequent adaptation of the compliance program;
- Visible and unequivocal support to the compliance program from the senior management (tone at the top);
- Internal channels to report irregularities, open to third parties and adequately publicized;
- A policy to protect whistle-blowers against retaliation;
- An internal investigations system that respects the rights of the investigated and imposes effective sanctions for breaches of the Code of Ethics;
- Procedures which attest the integrity and track record of third parties or business partners, including suppliers, distributors, service providers, agents and intermediaries, on the moment of contracting their services and during the commercial relationship;
- Due diligence during the process of corporate transformations and acquisitions, for the verification of irregularities, illicit conducts or the existence of vulnerabilities in the involved corporations;
- Monitoring and continuous evaluation of the Compliance Programme’s effectiveness;
- An internal authority in charge of the development, coordination and supervision of the compliance program (compliance officer); and
- Compliance with the statutory demands over compliance programmes that were issued by the authorities of the national, provincial, municipal, or communal levels of Government.
Yes. Very common, there are Seminars organized by the Government of Angola and specific entities such as the National Service of Public Tender that informs Ministers and other public officials about the principles of the Law on Administrative Probity.