I Introduction

Jersey has criminalised bribery and corruption both domestically and internationally. Prior to the introduction of the Corruption (Jersey) Law 2006 (the Corruption Law), the offences of bribery and corruption had been dealt with by the customary (common) law and certain statutory offences, but the offences lacked clarity and there were few convictions. Following a number of international initiatives (such as the 1997 Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Transactions), the government introduced a new statute – the Corruption Law – which was intended to combat bribery and corruption in line with the international conventions. Although Jersey is a jurisdiction in its own right (distinct from England and Wales), the UK Bribery Act 2010 (the Bribery Act) is also considered in this chapter as it has the potential to have extraterritorial reach in Jersey and has done much to shape practice and approach in Jersey.

II DOMESTIC BRIBERY: LEGAL FRAMEWORK

i The Corruption Law

The Corruption Law was introduced as a comprehensive and self-contained measure to deal with corruption both locally and internationally. The existing statutory offences and any common law offences (which were unclear in scope) were abolished. In their place three principal offences were introduced.

Corruption concerning a public body

It is an offence to give or receive any 'advantage' as an inducement for anyone working within a public body to do or omit to do something. Therefore both the briber and person being bribed have committed an offence. A public body is defined to include the government of Jersey, any company in which it is a principal shareholder, and the Jersey Financial Services Commission (the financial services regulator). The law also extends to equivalent bodies beyond Jersey (see below).

Corrupt transactions with agents

It is an offence for an agent to accept or give an advantage as an inducement for doing any act or omission regarding the affairs of the principal, or for showing favour or disfavour regarding the affairs of the principal.

Corruption by public officials

This offence is aimed at what is essentially abuse of public office. The targets are the officers and employees of a public body, which extends to companies that are principally state-owned within or outside Jersey. It is an offence for a public official to do or not to do something in relation to his or her post, with a view to gaining an advantage for either himself, or herself, or another. This would cover situations such as where a public officer uses his or her power to grant or withhold a licence or permission, to benefit himself or herself or another improperly. This sort of activity would not otherwise be covered because there is often no element of bribery in such situations. The person may act on their own, for their own personal benefit, whether in a financial form or otherwise and without the involvement of anyone else.

Certain features are common to each of the offences and there is no reference to bribes. Instead, the term 'advantage' is used, which extends the possibilities of inducement to encompass both monetary and non-monetary advantages (including, for example, job offer, forbearance from enforcing a right). Legal persons are caught so that companies as well as individuals can face prosecution and, in the case of offences by a corporation, culpable officers can also be prosecuted. The act must take place 'corruptly', a term that is not defined in the statute and that the courts will need to interpret in a common-sense manner and with regard to any case law or guidance on the term in Jersey, the United Kingdom or pursuant to the relevant international conventions. The maximum penalties are 10 years' imprisonment or an unlimited fine or both, and in each case these penalties are designed as a deterrent.

ii Prohibitions on paying and receiving

Bribes are criminalised where they involve public officials or agents. These terms are widely drafted as set out below.

The Corruption Law gives an extended meaning to the word 'agent'. The expression covers both private and public sectors and includes employees. It is an offence for an agent to accept or obtain corruptly any inducement or reward for doing or not doing anything or showing or not showing any favour or disfavour to a person in relation to the business or affairs of the agent's principal. It is not necessary that the agent benefits personally from the inducement or reward.

The term 'public body' is widely drafted and includes equivalents in other jurisdictions. It is an offence for any member, officer or employee of a public body to give (or promise) or receive (or solicit) any advantage as an inducement or reward for anyone working at a public body to do or not do something. The person soliciting or receiving the inducement or reward need not necessarily be the member, officer or employee of the public body and the person giving or offering the inducement or reward need not necessarily be the person who will benefit from the member, officer or employee's act or omission.

There is extended jurisdiction in respect of any offence under the Corruption Law. First, the offence may be prosecuted in Jersey even though some of the acts constituting the offence are committed outside Jersey. Second, an offence may be prosecuted in Jersey if a national of the United Kingdom resident in Jersey, a company established in Jersey or a Jersey limited liability partnership does an act outside Jersey that, if done on the island, would constitute the offence.

iii Definition of public official

Broadly, the definition of a public official covers all those holding any form of office with any public nexus. The full definition is given in Article 4 of the Corruption Law and includes judges, members, officers and employees of public bodies, members of the police, the Auditor General, the Data Protection Authority and any other person exercising a public function for Jersey or for any public agency or public enterprise belonging to Jersey.

A public body is defined to include 'any company in which the States of Jersey are the principal shareholder, and any subsidiary of such a company'.

iv Public officials' participation in commercial activities

There is no blanket prohibition against public officials taking part in commercial activities. Members of some public bodies, some crown advocates (the Jersey equivalent of public prosecutors), members of the youth court and members of the honorary police force are allowed to engage in commercial activity. However, commercial activity has been considered incompatible with offices to which appointment is made by the Crown or the Bailiff (the Bailiff is Jersey's Chief Justice and president of the Jersey Court of Appeal). The following officers are, therefore, prohibited by statute from having, within or without Jersey, other paid employment, or any public or other office: the Bailiff and the Deputy Bailiff; the Attorney General and the Solicitor General; the Viscount and the Deputy Viscount; the Judicial Greffier and the Deputy Judicial Greffier (these are all judicial or legal roles).

v Gifts and gratuities, travel, meals and entertainment restrictions

Gifts and gratuities, travel, meals and entertainment would all be likely to fall within the definition of advantage provided by the Corruption Law but would not give rise to a criminal offence unless given or received for the illicit purpose stipulated by the Corruption Law. As a matter of practice almost every public body in Jersey has stringent rules prohibiting the receipt of anything other than the most minor gifts, and even those have to be scrupulously recorded and the record made available for inspection. A Commissioner for Standards may investigate the conduct of elected members of the government.

vi Political contributions

Jersey does not have political parties in the traditional sense. The Corruption Law would not prevent contributions to the campaign of a candidate for political election provided it was not made for a prohibited purpose under the Law.

vii Private commercial bribery

Article 6 of the Corruption Law makes it an offence for an agent to corruptly engage in any of the relevant transactions to the prejudice of the agent's principal. This, therefore, criminalises the use of bribes in the private sector. By way of example, if an employee of a company commissioning building services received an advantage to award the contract to a particular construction company, then the employee would commit an offence.

It follows that the recipient does not have to be in a specific public position. Both the 'taking' and 'receiving' offences, subject to available defences, apply within a business to those with even constructive knowledge of a bribe. Individuals seeking to ignore the realities by simply looking the other way are at personal risk, as is the company itself under the corporate offence provisions.

viii Penalties

The maximum penalties for infringement of the statute are 10 years' imprisonment or an unlimited fine or both.

III ENFORCEMENT: DOMESTIC BRIBERY

There have been no reported cases under the Corruption Law. This does not appear to be as a result of lack of enforcement or political will (offences of money laundering are routinely prosecuted, including where the proceeds relate to bribery (see Section V.v and vi)) but perhaps a reflection of the type of businesses predominant in Jersey – highly regulated banks, trust companies and funds – which do not typically operate in developing jurisdictions but may end up inadvertently holding the proceeds of corruption. It should also be noted that Jersey is a small island. Even in the United Kingdom, which has a significantly larger population, prosecutions under the Bribery Act are rare.

IV FOREIGN BRIBERY: LEGAL FRAMEWORK

i Foreign bribery law and its elements

The Jersey government has, in common with the wider international community, recognised the risks posed by bribery and corruption on good governance, standards in public life and a properly regulated private business sector. Jersey has recognised that the increasingly globalised nature of the problem has prompted the United Nations (UN), OECD, International Monetary Fund (IMF), World Bank, European Union, Council of Europe and International Chamber of Commerce to mount initiatives to improve standards of governance and combat corruption. Along with many other jurisdictions, including the United Kingdom and other EU Member States, Jersey has revised its anti-corruption legislation to be able to satisfy international conventions and demonstrate commitment to take a firm stand against corruption in all areas.

This is particularly so in view of the need to take effective action against corruption in international organisations and in relation to overseas governments and companies. The Jersey authorities have regarded it as of great importance that the island should not be seen as a weak link in this international effort and, to that end, the Corruption Law was introduced to enable Jersey to play a full part in international efforts to combat the problem and, at the same time, modernise and expand the scope of its domestic protections.

ii Definition of foreign public official

The definition of an agent includes foreign public officials (including a member of the government of any other country); a member of any parliament; a member of the European Parliament or the Court of Auditors of the European Union; a member of the Commission of the European Union; a public prosecutor; a judge of a court or tribunal in any other country or established under international agreement; a member or employee of an international establishment; a person employed by or acting on behalf of the public administration of any other country; a person appointed to hold an administrative office, whether regional or national, in any other country; a person exercising a public function, whether regional or national, for another country or for any public agency or public enterprise of another country; or an official or agent of a public international organisation.

State-owned or controlled companies are subject to the provisions of the Corruption Law by virtue of Article 3, whereby any such company that exists in a country or territory outside Jersey is within the meaning of 'public body' for the purposes of the Law.

It is immaterial that the principal's affairs or the agent's functions do not have a connection to Jersey. The effect of the provision is to ensure that bribery of agents, of foreign public officials and agents of foreign principals is made a criminal offence in Jersey provided that any of the acts alleged to constitute the offence took place in Jersey or the act is committed by a Jersey resident, Jersey company or limited liability partnership whether done in Jersey or elsewhere.

iii Gifts and gratuities, travel, meals and entertainment restrictions

There is no distinction with the domestic position described in Section II.iv – in other words, gifts and gratuities, travel, meals and entertainment restrictions would all be likely to fall within the definition of advantage in the Corruption Law, but would not give rise to a criminal offence unless given or received for a corrupt purpose.

iv Facilitating payments

It is important to recognise that the Corruption Law does not set out prescriptive procedures describing, for example, a model regime with full guidance. Rather, the Law establishes principles and it is for those potentially affected by it to consider what is acceptable.

It is recognised that facilitation payments are a particular problem for businesses that operate in some developing countries. However, the Jersey authorities do not consider they can take the approach of implementing anti-bribery and anti-corruption provisions but then creating exclusions for facilitation payments in certain jurisdictions. Not only would such an approach undermine the Law, but it would almost certainly give rise to reporting obligations under the existing proceeds-of-crime legislation. As the law stands, facilitation payments, however small, are, in principle, prohibited.

v Individual and corporate liability

Individuals, companies and limited liability partnerships can be held criminally liable for breaches of the Corruption Law.

vi Civil and criminal enforcement

The Corruption Law is a criminal statute. There are, however, civil remedies for corruption similar to those in the United Kingdom; for example, by the use of remedial constructive trusts, claims for dishonest assistance and knowing receipt, and other related civil fraud causes of action.

vii Agency enforcement

The Corruption Law forms part of Jersey's criminal law and so would be investigated by the States of Jersey Police. Prosecution would be by the Attorney General, whose consent is required for the institution of proceedings under the statute.

viii Defences

No specific statutory defences are provided; there is no equivalent in Jersey of the adequate-procedures defence in the UK Bribery Act.

ix Plea-bargaining

Plea-bargaining is not officially available in Jersey although, in practice, a defendant may offer to plead guilty to a lesser offence than the one originally charged. The prosecution may agree to this to avoid the expense and uncertainty of a trial. The defendant's sentence is likely to be lower both because of the lesser offence and credit for pleading guilty.

x Leniency

There are no provisions for plea-bargaining, deferred prosecutions or similar. However, self-reporting and subsequent cooperation, including a guilty plea, would be likely to provide powerful mitigation to reduce the penalties from the level at which they otherwise would have been.

xi Prosecution of foreign companies

As to territorial jurisdiction, a central feature is that a UK national or Jersey company or limited liability partnership can be prosecuted in Jersey for acts done entirely outside Jersey, if they would have constituted an offence under the Corruption Law; moreover, a prosecution can take place in Jersey if any constituent part of the offence charged took place there. With regard to a public body's offences, the bodies or officials involved can be located anywhere; and in the case of a public agency's offences, it does not matter if the principal's affairs are conducted and located outside Jersey.

xii Penalties

As mentioned in Section II.i, the penalties for violation of Jersey's foreign bribery provisions are 10 years' imprisonment or an unlimited fine or both. There is no specific provision debarring a person convicted of bribery offences from tendering for public contracts but it is highly likely that it would be taken into account as a relevant factor and that a public contract would not readily be granted to a body with a bribery-related conviction.

xiii UK Bribery Act

The Bribery Act received significant publicity when it was enacted, particularly in relation to the 'corporate offence' (see below). It was designed to replace the piecemeal corruption offences that existed in the United Kingdom prior to the Act. Like the Corruption Law, the Bribery Act was introduced partly to enable the United Kingdom to comply with its obligations under the various international conventions.

In brief, it created two general offences of bribing another person and being bribed; as well as a discrete offence of bribery of a foreign public official. The offences apply to companies as well as individuals. They are punishable by imprisonment of up to 10 years or a fine or both.

The Bribery Act also created a new corporate offence of failure by a commercial organisation to prevent a bribe being paid on its behalf by a person or persons associated with the commercial organisation, with the intention of obtaining or retaining business, or an advantage in the conduct of business, for the commercial organisation. Such persons could include its employees, agents, joint venture partners, subsidiaries and even (potentially) independent contractors and suppliers. It is a strict liability offence, punishable by an unlimited fine. There is no equivalent in the Corruption Law.

It is a defence for the commercial organisation to prove that it had adequate procedures in place designed to prevent persons associated with it from undertaking bribery in this way. The UK government has issued guidelines setting out the type of policies and procedures a commercial organisation should adopt, including due diligence on service providers and risk assessment. The policies should be proportionate to the bribery risks the entity faces and to the nature, scale and complexity of its activities. They should be clear, practical, accessible, effectively implemented (e.g., through training) and properly enforced. Senior management involvement is considered critical.

As with the Corruption Law, the Bribery Act has extraterritorial impact. The UK courts can prosecute offences committed outside the United Kingdom where the person committing them has a 'close connection' with the United Kingdom, by virtue of being a British national or ordinarily resident in the United Kingdom or a body incorporated in the United Kingdom. Further, in relation to the corporate offence, provided the commercial organisation is incorporated in the United Kingdom, or carries on a business or part of a business in the United Kingdom, then the UK courts will have jurisdiction. There is a close connection between Jersey and the United Kingdom – many Jersey residents are British nationals and many companies carry on part of their business in the United Kingdom. Accordingly the risk of prosecution of a Jersey resident or company under the Bribery Act is relatively high. For these reasons, it is advisable for Jersey companies to have policies and procedures in place that comply with the Bribery Act (notwithstanding the lack of a specific corporate offence under the Corruption Law).

V ASSOCIATED OFFENCES: FINANCIAL RECORD-KEEPING AND MONEY LAUNDERING

i Financial record-keeping laws and regulations

The Companies (Jersey) Law 1991 has the usual requirements regarding record-keeping and accounts. These are similar to those in the United Kingdom and include the requirement to keep adequate accounting records. Failure to do so is an offence.

There are additional record-keeping requirements for regulated financial services providers.

ii Disclosure of violations or irregularities

There is a general right not to self-incriminate so companies are not required to disclose violations of anti-bribery laws. However, as considered in Section IV.x, self-reporting may be advisable to minimise the possible penalties. Further, regulated companies (banks, funds and other financial services providers) have the obligation to file suspicious activity reports if they have any concerns that financial crime has taken place. Financial crime includes bribery and corruption offences.

iii Prosecution under financial record-keeping legislation

There has been no reported case of prosecution under financial record-keeping legislation although it is a theoretical possibility. If no records were made of bribes paid by a company then the adequate accounting records provisions would have been breached. The penalties are, however, relatively low (a maximum £10,000 fine).

iv Tax deductibility of domestic or foreign bribes

It is inconceivable that the payment of bribes would be regarded by the Jersey tax authorities as a deductible business expense.

v Money laundering laws and regulations

The Proceeds of Crime (Jersey) Law 1999 (the 1999 Law) governs money laundering and is a comprehensive statute (comparable to UK legislation). It penalises:

  1. assisting another to retain the proceeds of crime;
  2. acquisition, possession or use of the proceeds of crime;
  3. failing to disclose knowledge or suspicion of money laundering;
  4. tipping off; and
  5. concealing or transferring the proceeds of crime to avoid prosecution or a confiscation order.

It is therefore possible to use the money laundering legislation to recover the proceeds of bribery and corruption. No actual conviction of bribery needs to have been obtained in Jersey or elsewhere provided there is sufficient evidence of criminal conduct that would have constituted an offence in Jersey (regardless of whether it took place there), punishable with a minimum term of one year's imprisonment (a Schedule 1 offence).

The recent case of First Trust Management Ltd v. AG2 concerned an application to lift a saisie (the Jersey equivalent of a restraint order) imposed under the 1999 Law, at the request of the United States, resulting from illegal lobster harvesting in South Africa. The court considered whether bribery of fishery control officers in South Africa would have amounted to an offence under the Corruption Law if committed in Jersey. The court opined that it would, which would amount to a Schedule 1 offence (punishable by more than one year's imprisonment), which is necessary for the imposition of a saisie under the 1999 Law. The lobsters could be regarded as the proceeds of the bribery for the purposes of the 1999 Law. That the lobsters were also the proceeds of the crime of overfishing, punishable only by a fine and not a Schedule 1 offence under the 1999 Law, did not alter the Schedule 1 status for the purposes of this application.

vi Prosecution under money laundering laws

There have been various convictions in relation to money laundering offences. The conduct in those cases has generally predated the Corruption Law. Accordingly, the prosecution relied on establishing the customary law offences of fraud but the cases demonstrate that this is an effective route to prosecute corruption in Jersey and other offshore jurisdictions where the proceeds of corruption that took place in a foreign state may have ended up. The fact that the Corruption Law is now in force, with its wide extraterritorial effect, means it will be easier to establish that the conduct complained of would be an offence if tried in Jersey. An example is AG v. Windward Trading Limited.3 Windward Trading Limited, a Jersey registered company, pleaded guilty to four counts of money laundering before the Royal Court of Jersey. The Royal Court imposed a confiscation order of £3,281,897.40 and US$540,330.69, thereby stripping the company of all its assets. Windward admitted to laundering the proceeds of corruption between 29 July 1999 and 19 October 2001. The corrupt activities took place in Kenya where Windward's beneficial owner, Samuel Gichuru, was resident. During the period on the indictment, Mr Gichuru was also the chief executive of Kenya Power and Lighting Company, the Kenyan government's electricity utility company. It awarded valuable contracts to a number of engineering and energy companies worldwide that all made corrupt payments to Windward.

vii Sanctions for money laundering violations

The penalties for money laundering violations are 14 years' imprisonment or an unlimited fine or both.

viii Disclosure of suspicious transactions

Non-disclosure of suspicious financial transactions is generally criminalised by the Proceeds of Crime (Jersey) Law 1999. Regulated entities are under a strict obligation to file suspicious activity reports (see Section V.ii).

VI ENFORCEMENT: FOREIGN BRIBERY AND ASSOCIATED OFFENCES

There has not yet been any foreign-bribery activity under the Corruption Law (see Section III).

VII INTERNATIONAL ORGANISATIONS AND AGREEMENTS

The increasingly globalised nature of bribery and corruption has prompted the UN, OECD, IMF, World Bank, European Union, Council of Europe and International Chamber of Commerce to mount initiatives to improve standards of governance and combat corruption. The Jersey government actively monitors developments in this area and the Council of Europe Convention on Corruption 1999 and the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions 1997 were direct influences on the Corruption Law.

VIII LEGISLATIVE DEVELOPMENTS

There are currently no proposed developments or amendments to the Corruption Law or to bribery and corruption laws more generally.

IX OTHER LAWS AFFECTING THE RESPONSE TO CORRUPTION

There are no significant laws in Jersey dealing with corruption other than those set out above. Jersey does not, for example, have any whistle-blower legislation.

X COMPLIANCE

As mentioned in Section IV.viii, the Corruption Law does not set out an adequate procedures or other statutory defence. The Jersey government has not issued any guidance notes under the Corruption Law, but it is likely that adherence to the guidance issued by the Ministry of Justice and the Serious Fraud Office at the time the Bribery Act was introduced would be regarded as sound and relevant. Most Jersey companies will have guidelines in place in relation to corporate hospitality and gifts based on the UK guidance, not least because of the extraterritorial reach of the Bribery Act (as outlined in Section IV.xiii).

XI OUTLOOK AND CONCLUSIONS

The enactment of the Corruption Law has injected certainty into the potential prosecution of corruption and bribery offences in Jersey – a shift from the uncertain customary law position. Jersey is a major financial centre and, unfortunately, corrupt foreign officials, oligarchs and businesses may target such centres if they do not have adequate controls in place. As the Home Affairs Committee said when the draft legislation was being considered:

Growing recognition, on the international stage, of the threat to good governance, standards in public life and a properly regulated private business sector, posed by bribery and corruption has prompted moves by various international bodies to begin to try to raise standards generally, a process in which one of the first steps is to ensure that countries have in place adequate legislative provisions to deal with such offences.4

Jersey has recognised the need to drive the anti-corruption agenda and has put in place the legislative framework to pursue anti-corruption and bribery prosecutions both domestically and as part of multi-jurisdictional investigations in conjunction with other regulators. As noted above, there have been no prosecutions to date under the Corruption Law but it will be interesting to review the situation in a few years' time as investigations come to fruition.


Footnotes

1 Simon Thomas is a partner and Lynne Gregory is a senior associate at Baker & Partners.

2 [2018] JRC 064.

3 [2016] JRC048A.