This article summarizes the anti-corruption developments in the EMEA region (Europe, Middle East and Africa) during the first half of 2015. Recent trends in the EMEA region concern, above all, a strong dynamics to tighten legal provisions on anti-corruption legislation in the light of international recommendations by OECD and UN; shortcomings of the current legislative framework became increasingly manifest in court rulings and administrative decisions. Yet, one needs to bear in mind that the EMEA region is not homogenous and is, likewise, subject to unique developments at a more local and national level.
The latest legislative advances in Germany concern the country’s draft legal framework on the combat of corruption. This framework is designed to implement international anti-corruption guidelines, thereby expanding the prohibition of commercial bribery and the tightening provisions on bribery of foreign public officials. In particular, the future legal anti-corruption framework in Germany is intended (a) to include a more coherent protection of the interests of those principals who are disadvantaged by acts of taking and offering bribes in business transactions and (b) to expand the definition of public officials pursuant to the German criminal code to include not only German public officials but also their European and Non-European counterparts (http://globalcompliancenews.com/germany-draft-law-to-expand-provision-on-commercial-bribery-and-bribery-of-foreign-public-officials-20150203/). In particular a widening of the scope of criminal liability to (also) protect principals’ interest will substantially alter the country’s conceptual understanding of corruption: acts that “merely” violate the perpetrator’s duties towards his/her company are held by the draft legal framework to constitute a criminal offence. A violation of compliance policies and regulations does – according to the draft law – not constitute a violation of duties in the sense of the law. By the same token, German anti-corruption legislation will be widened to include independent healthcare professionals (e.g. doctors and pharmacists), all of which have – so far – not been subject to the country’s laws against corruption. To the contrary, courts have regularly held that independent healthcare professionals do not qualify as ”agents” of the public health care system and, consequently, evade criminal liability (http://globalcompliancenews.com/germany-targets-corruption-in-the-health-sector-most-likely-to-be-enacted-in-2015-20150430/).
Legislative developments in Portugal have similarly been driven by recommendations from UN, GRECO and OECD to amend the country’s criminal code, its laws on crimes of responsibility of political offices and high public offices, its provisions relating to corruption in international trade and in the private sector, its rules on corruption in sports activities, and its laws concerned with ensuring whistleblowers in corruption related matters. Portugal’s framework of anti-corruption legislation is, as a consequence, becoming more efficient, coherent and tangible (http://globalcompliancenews.com/portugal-changes-anti-corruption-laws-20150602/).
In March, Spain has joined recent trends to enforce anti-bribery compliance at the business level by means of strong incentive schemes: the country amended its criminal code to include exemptions from criminal liability for companies under narrowly defined conditions; businesses will be exempted from criminal liability if the following four conditions are satisfied:
- directors have adopted a compliance program that meets the legal requirements under Spanish law,
- the supervision of the program is entrusted to a company’s body or individual with authorized powers of initiative and control (Compliance Body),
- the officers or the employees have (nonetheless) committed a crime by intentionally violating the compliance program, and
- the Compliance Body did not neglect its duties of supervision, oversight and control.
A compliance program needs to include six key elements in order to qualify for exemption from criminal liability, namely it must include elements on:
- risk assessment,
- standards and controls to mitigate any criminal risks detected,
- financial controls to prevent the crimes,
- obligation to report to the Compliance Body any violations of the standards and controls (a whistleblowing channel),
- disciplinary system to sanction violations of the compliance program by officers and employees, and
- periodic review of the compliance program, making the necessary adjustments when serious violations occur or when the company undergoes organizational, structural or economic changes.
Given that the amended Spanish criminal code requires an “effective” compliance program, companies will need to demonstrate that their officers and employees have received proper training respectively (http://globalcompliancenews.com/spanish-criminal-code-regulates-and-defines-the-content-of-compliance-programs-20150316/ and http://globalcompliancenews.com/spains-new-criminal-code-joins-wave-countries-requiring-companies-adopt-comprehensive-compliance-programs-20150331/).
In the United Kingdom, the past year may best be characterized by three major developments around the country’s Serious Fraud Office (SFO). Firstly, the SFO for the first time successfully prosecuted a corporate entity for bribery of foreign public officials. The company in question was charged under the Prevention of Corruption Act 1906 as the Bribery Act had not yet been in force when the offences in question have been committed. Secondly, the SFO marked its first successful prosecution of individuals under the Bribery Act since the Act came into force in July 2011: SFO successfully prosecuted three men who had been entangled in a fraud case that caused damages totaling GBP 23 million. The three were convicted of conspiracy to commit fraud, conspiracy to furnish false information, fraudulent trading and other offences under the Bribery Act. Thirdly, Her Majesty’s Crown Prosecution Service Inspectorate (HMCPSI) published a report outlining the quality of casework handled at the SFO. In particular, HMCPSI described SFO as being “significantly undermined by weakness in systems and processes” and set forth specific recommendations. These and other shortcomings have been addressed by the United Kingdom Government’s Anti-Corruption Plan which ties together all of the country’s anti-corruption activity and develops a cross-government plan following an in-depth six-month review period (http://globalcompliancenews.com/sfo-first-ukba-conviction-20150108/).
Of particular importance for the EMEA region are also recent developments of anti-corruption legislation in Serbia. Serbia enacted a locally unique law on the protection of whistleblowers. It aims to effectively, systematically and comprehensively provide protection to individuals who report suspicions of corruption internally, externally, or publicly. The enacted law (a) clearly defines the term whistleblower, and (b) states all the perquisites that need to be fulfilled in order to benefit from its protection. As the law distinguishes between the three categories of internal, external and public whistleblowing, it furthermore specifies those conditions under which each of them is permissible. While the onus on providing procedures and protection for whistleblowers is primordially on its employer, whistleblowers are, in turn, under the obligation to disclose relevant information to their employer or a competent state authority before resorting to mechanisms of public disclosure (http://globalcompliancenews.com/serbia-acts-against-corruption-by-protecting-whistleblow-20150310/).
Ukraine is likewise closing the phalanx in its fight against corruption. On the one hand, the country launched a new Anti-Corruption Bureau which is meant to investigate misconduct by high-level public officials. It is believed that this new agency will be distinct from its predecessors and from numerous other (ineffective) agencies in Ukraine for numerous reasons:
Firstly, its establishing law contains several provisions designed to ensure independence and transparency. Secondly, the Bureau will have broad powers and resources, similar to those of a law enforcement agency. These include, among others, the power to initiate and conduct investigations, to make arrests and to freeze assets pursuant to court orders. Thirdly, the Ukrainian government is clearly committed to combat corruption (http://globalcompliancenews.com/ukraine-new-anti-corruption-law-20150125/).
On the other hand, Ukraine enforced its laws targeting at compliance in the private sector. A new law requiring companies to maintain compliance programs has come into effect, requiring almost all companies that participate in public tenders or contracting with state owned companies to set-up internal compliance programs. More precisely, new Ukrainian laws require companies to designate a compliance officer with responsibility to implement the company’s compliance program. Moreover, Ukrainian laws now encourage companies to, inter alia, conduct risk assessments on a regular basis, to establish mechanisms to monitor the implementation of their compliance program, to draft and implement an employee code of conduct, to establish mechanisms for holding employees liable for violations, and to include compliance provisions in contracts with third parties. While the law does not include penalties for failure to implement a compliance program, law enforcement agencies may consider the existence/absence of a compliance program when deciding on whether or not to pursue a particular case. Thus, a compliance program will provide a company with (at least) some defense in the event of an investigation. (http://globalcompliancenews.com/ukraine-new-law-requires-companies-compliance-programs-20150426/).
Kuwait has undertaken significant changes to its legal landscape on bribery and related offences. In particular, the country pursues a dual strategy in establishing a Public Authority for Combating Corruption (PCA) while maintaining its existing legislation on tax evasion, the manipulation of public tenders and auctions by public officials, money laundering, fraud, and the making of counterfeit products. In order to facilitate PCA’s enforcement of its mandate, the authority is granted extensive powers including, but not limited to, providing protection to witnesses and compelling government and private entities and individuals to disclose any information that PCA may consider relevant to its investigations. Moreover, Kuwaiti law now obliges some categories of public officials to periodically disclose certain pieces of private information during their tenure and once they leave office. More precisely, disclosure rules relate to ownership in real estate, shares, financial securities, any moveable assets and bank accounts. Failure to (a) cooperate with PCA and/or (b) to make the required disclosures are sanctioned by severe fines and, in extreme cases, imprisonment (http://globalcompliancenews.com/kuwait-developments-relating-to-bribery-and-related-offences-20150512/).