Picture an all too common scenario:  An importer of fresh produce learns that a shipment has been held up at customs abroad.  Although there is no legitimate reason for delay, the foreign port authorities insist upon carrying out unspecified administrative checks and searches that “could take weeks”.  In the meantime, the cargo sits on the dockside baking in the hot sun.  It is likely to perish in days.  If the shipment is not made on time, a valuable client will be lost.  A representative of the port authorities explains that for a “small fee”, the formalities can be waived and the cargo approved.  Does paying this fee constitute a bribe?

I think anyone could be forgiven for thinking that it does not.  For one thing, this scenario just doesn’t fit what would generally be considered bribery.  On the contrary, it is the port official who is exerting illegitimate pressure on the importer.  Many would class this as a case of extortion, not one of bribery.  The official is not being corrupted; the official is acting corruptly.  The importer does not make the payment freely, but as a result of the duress being applied by the official.

Under the FCPA, the payment would likely be treated as a “facilitation payment” given that a relatively small amount is being paid to secure the performance of a non-discretionary function (i.e. approving the shipment as required under local law).  As discussed previously at the BriberyLibrary, so called “facilitation payments” are not allowed under the UK Bribery Act.  The Section 6 offence of bribing a foreign public official does not require that the public official is improperly induced to perform his functions, only that a business advantage is obtained by the party making the payment.  The section therefore applies in the scenario described above.  Is duress a defence?

The issue of payments made under duress is briefly discussed in the government guidance to the Act:

“Duress

It is recognised that there are circumstances in which individuals are left with no alternative but to make payments in order to protect against loss of life, limb or liberty. The common law defence of duress is very likely to be available in such circumstances.”

This reflects a totally orthodox application of the common law defence and is likely to have harsh consequences in scenarios such as that outlined above.  The scope of a duress defence in the context of a prosecution for bribery will be its seems be no greater than in the general criminal law.  From the guidance, it does not appear that prosecuting authorities will have any greater regard to economic duress in the context of Section 6 of the Act – despite fact that payments may be made without any intention to secure improper performance by the public official concerned.  As with other criminal offences, threats “against loss of life, limb or liberty” will be required and, even then, the defence is only “very likely” to be available.  Economic duress in a situation like the one contemplated above is apparently not regarded by the Ministry of Justice as an excuse for making such payments to foreign officials. 

What then can businesses do to avoid failing foul of the Act in these circumstances?  Some ideas are discussed by Rose Parlane in her recent post: “Facilitation payments - to pay or not to pay: a difficult question?”.  It is very much a question of avoiding the situation in the first place; trying to plan operations so that the need to make payments can be avoided, and understanding local law and customs well enough that making payments can be resisted.  Staff working in locations where such payments may be requested should receive training as to how to respond to demands for payments.

The message from the Act and the accompanying guidance is clear: economic duress is unlikely to excuse the payment of bribes to foreign officials.  Organisations may have to swallow the consequences of refusing to make those payments if they are to avoid prosecution.