What are the biggest challenges enforcement agencies/regulators face when investigating and prosecuting cases of bribery and corruption in your jurisdiction?
Bribery & Corruption
Presently, one of the biggest challenges in prosecuting companies for foreign bribery offences is the high burden of proof in establishing the requisite fault element. A company can only be found guilty of the offence of bribing a foreign or federal public official if the prosecution can prove that the company expressly, tacitly, or impliedly authorised or permitted an employee, agent or officer's bribery of a foreign official. This authorisation or permission could be established by proving that:
- the company's board of directors intentionally, knowingly or recklessly carried out the relevant conduct, or expressly, tacitly or impliedly authorised or permitted the commission of the offence;
- a high managerial agent of the company intentionally, knowingly or recklessly engaged in the relevant conduct, or expressly, tacitly or impliedly authorised or permitted the commission of the offence;
- a corporate culture existed within the company that directed, encouraged, tolerated or led to the non-compliant conduct; or
- the company failed to create and maintain a corporate culture that required compliance with anti-corruption laws.
From an evidentiary perspective, these are complex matters to prove. In comparison, the new proposed legislation creates the offence of corporate criminal liability in relation to foreign bribery unless the company can establish that it had 'adequate procedures' in place - thereby reversing the onus of proof.
One of the biggest challenges for the law enforcement agencies is to effectively conduct large-scale investigations. Sometimes the lack of sufficient resources and proper forensic support makes it challenging to efficiently collect and analyse big volumes of seized data. Transnational corruption is another area where the law enforcement agencies face challenges, as mutual assistance in criminal matters is often time-consuming.
The law enforcement agencies also encounter difficulties in gathering evidence. To date, the law does not create favourable conditions for companies to step forward and provide the authorities with documentation in exchange for leniency. Consequently, there are no sufficient grounds for cooperation (e.g. private investigations) aimed at developing better solutions for internal compliance.
Proving corruption offences in Ireland requires prosecutors to prove one acted “corruptly”, which includes acting with an improper purpose. As mentioned, in certain circumstances the burden of proof is reversed when a party can be presumed (a presumption which is rebuttable) to have acted corruptly. However, in those other circumstances, prosecutors must show that defendants acted with improper purpose in their actions, which can be a difficult hurdle to overcome.
One of the biggest challenges faced by enforcement agencies and regulators when investigating and prosecuting cases of bribery and corruption in Brazil is the lack of resources (especially human and budget resources).
In addition to that, the legal uncertainties related to the execution of leniency agreements (please refer to Question 25) may result in less cooperation from corporate entities with respect to the voluntary disclosure of wrongdoings, which are usually a faster and less money-consuming way of investigating and prosecuting cases of bribery and corruption.
However, it is expected that as time passes by and more decisions are granted by the judiciary branch and competent administrative authorities, the whole investigating and prosecuting system becomes more mature, and such challenges can be overcome.
The Conservative Party's 2017 election manifesto contained a pledge to abolish the SFO and fold it into the National Crime Agency. The NCA is tasked with investigating and prosecuting serious organised crime, cybercrime and national security cases. This pledge was believed to be in response to historic underperformance of the SFO and a number of high profile failed prosecutions.
This pledge has not been implemented, following the Conservative Party's failure to secure an overall majority government, and a number of recent SFO success stories. These include a high-profile privilege battle with Eurasian Natural Resources Corporation (ENRC), when a UK court set out a narrow scope for litigation privilege over documents created as part of internal investigations, and several high value deferred prosecution agreements (see question 16 above).
Whilst the SFO appears to be free from immediate danger, the recent uncertainty over its future has cast a cloud over the organisation, and there have been reported difficulties over the retention and recruitment of senior staff. The SFO has also yet to establish the free flow of experienced legal professionals into and out of the organisation which, for example, has helped to make the US Department of Justice so successful.
The SFO has faced challenges in the past regarding the funding of large "blockbuster" cases, although, as noted above, recent moves have been made to a more flexible budget structure which should reduce this challenge in the future.
Finally, there is a relative lack of enforcement precedent under the UK Bribery Act compared to, say, the FCPA. The body of case law is small and this can make it difficult for both the SFO and the investigated party to know where the boundaries lie.
Enforcing bribery and corruption laws, relies a lot on people reporting it and if they are not giving proper protection on a federal level, it could prevent their co-operation. The ultimate issue, is the lack of evidence. Bribes are usually done in such a way that they are extremely difficult to trace such as cash payments etc. Without evidence it is hard to discover the occurrence of bribery, let alone prosecute it. Without the good faith of people, it is almost impossible to detect in some circumstances.
Enforcement agencies and regulators in Singapore have extensive powers, however, three of the largest challenges they face include:
- Agencies and regulators hampered by laws which are not up-to-date considering the changing face of bribery: the value of bribes has exponentially increased in cases since the inception of the PCA in 1960, and maximum fines under the PCA are arguably not punitive enough to reflect these changes.
- Collaboration with international regulators too could be improved, but the interactions demonstrated in the Keppel international settlement in December 2017 reflect an enhanced focus on such co-operation.
- Under the PCA, CPIB must refer cases to the public prosecutor for prosecution. If the prosecution requires the consent of the public prosecutor, this can hamper the pace of investigations and prosecutions.
The biggest challenges facing the enforcement agencies in investigating and prosecuting cases of bribery and corruption, mostly come from the difficulties in evidence collection and consolidation, which is aggravated by the developments of economy and technology. The characteristics of the bribery related cases include the concealment of the misconducts per se, and the collusion among the involved parties. Dynamic business models in different industries and the adoption of high-end technologies require a better understanding and in-depth knowledge from the enforcement authorities in investigation and prosecution. For example, instead of going directly through the bribery offering party, improper payments in the form of bitcoin could be transferred to the bribery taking party through a non-related third party based in other countries, and in the name of the legitimate business purpose. Under the circumstances where physical evidence is not solid, the alignment among the involved parties in non-cooperation with the authorities will increase the difficulty in further conviction. Additionally, if the cases involve extra-territorial factors such as foreign entities, then cooperation from the authorities in other jurisdictions will be needed, for which the process is usually time-consuming, whilst the investigation itself is time-sensitive.
The hurdles and barriers related with gathering sufficient evidence to build strong and successful cases; in Mexico, most of the cases that are dismissed or not prosecuted by the MP are due to loopholes and formality mistakes during prosecution procedures.
In addition to the foregoing, the biggest challenge is to overcome the elevated levels of corruption within the prosecuting and judicial authorities, as well as the lack of protection of the prosecutor and judicial authorities against political retaliation.
Compliance with international agreements and incorporation of related provisions in Greek Law made available a sufficient toolbox to enforcement agencies to enable effective action against bribery and corruption. Due to the fact that same changes have been ongoing for a number of years in many fields (tax, compliance, law) there is lack of co-ordination and central monitoring of these efforts. This is especially true when it comes to defining the jurisdiction of various enforcement agencies within different or parallel procedures.
There is need to focus on certain areas of interest (depending on the indications or information available on possible misconduct) so that enforcement agencies do not exercise overlapping powers on the same subject- matter.
Recently, the biggest challenge faced by the investigating agencies is when the accused leaves the country and resort to delaying tactics so as to frustrate the purport of the investigation. With enormous delay, securing sufficient evidence becomes a difficult task for the agencies, leading to prolonged proceedings resulting in acquittal of the accused. Another roadblock to effective and speedy justice in India is the large pendency of cases before the Courts.
The hardships related to the access to the relevant information; and the problems in obtaining prompt judicial decisions.
We believe that the Portuguese public authorities are, in the present times, fully prepared to conduct thorough investigations related to bribery and corruption. As such, we believe that the biggest challenges are the same as in any other jurisdiction, such as the complexity of the facts and operations carried out by the perpetrators and the difficulties in the gathering of evidence, particularly when the cases involve several jurisdictions.
The biggest challenge that enforcement agencies face is the lack of available resources.
It is a general problem that the public prosecutor’s offices are not best. Their personnel capacities are often not sufficient to manage extensive cases of bribery and corruption. Enforcement agencies need special knowledge to uncover and recognize the generally well-hidden structures of complicated corruption and bribery cases. As a consequence, major difficulties arise for enforcement agencies while investigating, gathering evidence and prosecuting.
Perhaps the biggest challenges that enforcement agencies/regulators face when investigating and prosecuting cases of bribery and corruption in Italian jurisdiction are those related to the limited traceability of money flows, as a consequence of an historical preference in some areas of Italy for the use of cash payments instead of other (more easily traceable) payments methods. Of course, this characteristic has led to the formation of large quantities of money of unknown origin that can be used as a bribe. On top of that, the proceedings related to bribery and corruption crimes share the same problems which affect all the other criminal proceeding (such as the regulation of the statute of limitations, which elapses sooner than in other Countries, causing many trials to end without any conviction, even in presence of strong evidence of guiltiness).
The complexity of the corruption activities carried out by the perpetrators and the gathering of evidence, particularly in cases that involve several jurisdictions. The enforcement of judicial decisions on persons that are not in the Macao territory has also been a challenge to the public authorities.
HRA: We are not very familiar with the investigation and prosecution details, but believe that the major challenge is the fact that corruption is set in all sector and levels of the Mozambican society, which makes it difficult to tackle when the entity is acting solo.
Enforcement agencies/regulators in Japan may find it difficult to meet the burden of proof of elements of bribery offences (e.g. a relationship between bribery and a duty of the bribery taker) since the Japanese judicial process imposes a strict burden of proof for prosecutors.
Despite a certain will to fight effectively against corruption, the French anti-corruption agency has to rely on limited financial resources as well as a limited number of professionals regarding the number of companies concerned by the Sapin II Act obligations (less than 70 persons).
Generally, Swiss law enforcement agencies suffer from the same limited resources as many of their colleagues abroad, leading to a need to select the key cases carefully in order to prosecute them successfully.
In international cases in particular, Swiss prosecutors frequently struggle with obtaining the necessary evidence from abroad to prosecute Swiss businesses and the responsible management, despite considerable efforts to obtain access to evidence by means of mutual legal assistance. This applies mutatis mutandis to the prosecution of money laundering offences, where the assets in question stem from corrupt foreign business activities. On the other hand, the recent efforts to coordinate the Swiss prosecution with the activities of foreign authorities has shown promising results, and it is therefore expected that this approach is pursued further.
In domestic cases in particular, it seems that bribery in the private sector is not prosecuted to the full extent possible, mainly due to a lack of access of the authorities to the information required for a successful prosecution, as well as a noticeable lack of interest in such prosecution on the side of the affected private sector.
FCPA investigations are inherently international in scope because they involve wrongdoing outside the United States. Any successful government investigation requires coordination with foreign government counterparts to, for example, obtain evidence abroad. In the absence of coordination and cooperation, US government investigations are more difficult and take more time to pursue. Where US law enforcement has a close relationship with a foreign counterpart, information about a violator can be quickly and easily exchanged without awaiting results from formal, lengthy channels established by mutual legal assistance treaties. As a result of such relationships, US and foreign authorities have been able quickly to share investigative leads and documents, as well as jointly pursue global resolutions.