Are compliance programs a mitigating factor to reduce/eliminate liability for bribery offences in your jurisdiction?
Bribery & Corruption
As at the date this guide was prepared, compliance programs are not formally a mitigating factor. However, in determining whether a corporation can be criminally liable under federal law it will be relevant whether:
- a corporate culture existed within the corporation that directed, encouraged, tolerated or led to non-compliance with the relevant provision; or
- the corporation failed to create and maintain a corporate culture that required compliance with anti-corruption law.
Given that compliance programs are used by corporations to discourage and prevent bribery and corruption within an organisation, the existence of a robust compliance program would assist to demonstrate that an appropriate culture exists. Even if during a criminal prosecution, a compliance program is found to be inadequate and does not fully exculpate a corporation, it may be a mitigating factor for the purpose of sentencing.
Although Polish law does not expressly provide for a compliance defence, such defence may be inferred from the corporate criminal liability regulations (including liability for bribery). The liability based on the current Act on Criminal Liability of Collective Entities for Punishable Offences is dependent on fault, which is either fault in selection or organisational fault. In practice, the having an effective anti-bribery compliance program in place may enable the corporate entity to argue that organisational fault cannot be attributed to it. In such a case, the criminal liability of the corporate entity would be excluded. However, the use of this potential compliance defence remains largely untested.
Based on the proposed new draft Act on Criminal Liability of Collective Entities for Punishable Offences (see: answer to Question 18), a corporate entity may be able to avoid criminal liability for corruption committed by the individuals and bodies authorised to act on its behalf if it proves that it acted with due care and diligence in the relevant circumstances. The corporate entity will also have to prove that it has mechanisms in place to ensure compliance of its activities with the law. It can be expected that, for this purpose, the corporate entity will be able to rely on having a compliance program, including anti-corruption policies, in place.
There is no authority to suggest that compliance programs currently constitute a mitigating factor to reduce/eliminate liability for bribery offences.
See Q18 for possible developments in this regard.
According to the Federal Decree, the existence of an effective compliance program is a mitigating factor in the determination of the penalties applicable to legal entities for the practice of wrongful acts. In case the compliance program is considered effective (please refer to Question 13 below), the reduction in the pecuniary penalty may range from 1% to 4% (the pecuniary penalty, as detailed in Question 5 above, may range from 0.1% to 5% of the turnover in the year immediately preceding the commencement of the administrative proceeding for investigation of the wrongful act).
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.
In terms of Article 239 of the Code, should the briber or intermediary report the offence before it is discovered, they shall be exempt from the penalty. It makes no mention of the accepter of the bribe being exempt from the penalty if they report the bribe.
Should the offender (in any context as defined) plead guilty then it would likely be considered a mitigating circumstance.
The court in these types of cases have a wide discretion to consider the circumstances of each matter and any mitigating factors that may apply. They can then apply these mitigating factors to decide the type of punishment that should be handed down.
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 system 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.
Yes. In accordance with the Anti-Unfair Competition Law newly 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 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. Therefore, we would strongly recommend that companies continue their efforts in this regard.
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.
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.
Under domestic economic laws, various compliances are put in place for an individual and a corporate entity. Such compliances act as a deterrent in facilitation of bribes. Ranging from tax compliances, to internal and statutory audits, the compliances under domestic economic laws are comprehensive preventing a person / entity from committing an overt act. However, compliance measures per se do not mitigate the risk of prosecution but may be helpful in demonstrating a lack of mens rea.
There is no specific rule set out in the Angolan legal system that excludes the liability of legal persons for corruption crimes if they decide to adopt and implement compliance programs aimed at preventing acts of corruption from being carried out.
Article 5(6) LCMLO sets out that “[the] liability of legal persons and entities treated as such shall be excluded when the perpetrator has acted against express orders or instructions of whoever is entitled to do so”. The content of the rule may be construed in the sense of excluding the liability of legal persons for acts of corruption carried out by their workers, employees or any other person who has acted in the name and/or in representation of a corporate body when compliance programs meant to prevent acts of corruption are in force. However, there is no case law or doctrine trend to confirm this interpretation.
There is no specific rule in the Portuguese legal system that excludes the liability of legal persons for crimes of corruption when they have compliance programs in place aimed at preventing the commission of acts of corruption.
However, Article 11(6) of the Penal Code – pursuant to which”[the] liability of legal persons and entities treated as such is excluded when the perpetrator has acted against the orders or instructions of whoever is entitled to do so” – has been construed both by national legal theory and case law precisely in the sense that the existence and implementation of compliance programs and mechanisms that have certain characteristics may result in the exclusion of the liability of legal persons for acts of corruption committed by their workers, employees or any other person who has acted in the name and/or on behalf of the legal entity.
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.
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.
Compliance programs (if 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 such crimes;
- 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 abovementioned 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 such kind of crimes.
As results from the reply to the previous question, in Macao’s legal system and concerning corruption crimes, the criminal liability of legal persons for corruption crimes only exists in connection to the crime of active corruption within the scope of foreign trade.
Albeit the non-existence of a specific rule to exclude legal persons’ liability for the commission of this crime, based on the existence of compliance programs, Article 5(2) of Law no. 10/2004 may be construed in that sense, i.e., in the sense that the existence and adoption of compliance programs and mechanisms that have certain features, may exclude the liability of legal persons for actions of active corruption committed by their workers, employees and any other person acting on behalf and/or representing the legal person within the scope of foreign trade
HRA: There is no express provision in the Mozambican legal system that establishes the existence of compliance programs, as a mitigating factor of the liability of legal persons for crimes of corruption. However, in view of Article 30.2 of the Criminal Code, that determines the exclusion of responsibility of the legal person when the agent has acted against orders or express instructions from a relevant body, it is arguable that the existence and implementation of compliance programs with certain characteristics may result in the exclusion of the liability of the legal person for acts of corruption and bribery committed by its employees or any other person acting on its behalf and/or representing such entity.
Compliance programs are not necessarily treated as a mitigating factor for bribery offences in Japan. Nonetheless, a compliance program may be considered as grounds for leniency in a criminal charge.
The implementation of compliance programs -such as the legal program imposed by the Sapin II Act – reduces the risk of liability for the company for several reasons. Firstly, because the risk of bribery occurring is mechanically reduced. Secondly, should an act of bribery occur despite the measures in force aiming at limiting the risk of corruption, the company would be able to contend that it has done the maximum of what could be expected from it and that there is no reason to hold its criminal liability.
Whereas it is too early at this stage to draw precise conclusions regarding the effectiveness of compliance programmes recently launched in France, one can consider that French companies are more and more concerned by the effectiveness of the fight against corruption.
Yes, see question no. 12 below.
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. DOJ and SEC, A Resource Guide to the US Foreign Corrupt Practices Act at 53 [2012, updated 2015]; FCPA Corporate Enforcement Policy [November 2017].