White Collar Crime Update: Criminal Penalties for Company Corruption Offences
06 December 2017
The Criminal Justice (Corruption Offences) Bill 2017 (Bill) is a key staple of the Government’s recently announced measures to tackle white collar crime in Ireland and bring the State in line with various international conventions on the issue. The Bill also seeks to address recommendations made by the Mahon Tribunal, which investigated planning and political corruption, and is expected to become law in the fourth quarter of 2018.
As highlighted in Part 2 of this series, the Bill introduces the concept of strict criminal liability and resulting criminal penalties for companies convicted of offences.
In addition to the principle of strict criminal liability for companies, sections 18(3) and 18(4) of the Bill also introduce criminal penalties for both officers of the company and members who control the affairs of the company in circumstances where the company has been convicted of an offence. These new provisions mirror the approach of similar legislation enacted in other European jurisdictions, such as the United Kingdom (Bribery) Act 2010.
Strict criminal liability for companies
Under section 18(1) of the Bill, a company will be found criminally liable where a “director, manager, secretary or other employee or subsidiary” commits an offence under the Bill with the intention of obtaining business or an advantage in the conduct of business for the company.
This carries a potential criminal penalty for the company of a class A fine of up to €5,000 upon summary conviction in the District Court, or an unlimited fine upon conviction on indictment before a superior court.
Criminal liability for officers and members
In tandem with section 18(1) which deals with companies, section 18(3) of the Bill states that where a company is convicted of an offence under the Bill and it is proved that the offence was committed with “consent”, “connivance” or is attributable to the “wilful neglect” of an individual who is or was a “director, manager, secretary or other officer” of the company, that individual is also liable to criminal conviction.
Crucially, for smaller companies, section 18(4) states that where the affairs of a company are managed by its members rather than its officers, a criminal conviction under section 18(3) shall apply to the controlling member in question.
An individual convicted under section 18(3) or section 18(4) of the Bill could be liable for criminal penalties of a class A fine and/or a prison sentence of up to 12 months on summary conviction, or an unlimited fine and/or prison sentence of up to 10 years on conviction on indictment.
The Bill states that in order for a company to successfully present a defence to a charge of corruption under section 18(1), it must demonstrate that it took all “reasonable steps” and exercised all “due diligence”.
This is similar to the defence contained in the UK’s Bribery Act 2010 where a company can argue that it had in place “adequate procedures” designed to prevent officer/employee misconduct which amounts to corruption. In the UK, this has been interpreted as requiring companies to have clear internal anti-corruption policies and procedures which are consistently enforced on officers and employees.
The new criminal penalties under the Bill, in addition to the Government’s recent announcement that it is planning to create a new police-led joint agency task force to investigate and prosecute white collar crime, signals a shift in approach by the State in tackling the issue. The new anti-white collar crime package now leaves both company officers and members exposed to the full rigours of criminal investigations.
As a result, it will be necessary for company officers to ensure that the company has robust anti-corruption practices and procedures in place, which should be regularly reviewed.
Specialist legal advice should be sought when interpreting the new legislation and implementing measures to ensure full compliance. For more information and assistance please contact our Investigations & White Collar Crime team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.