1. © Johan Løje, 2009 1 Introduction to the legal framework and relief channels regarding the prohibition of commercial bribery in EU and Denmark Advokat Johan Løje Sandel, Løje & Wallberg jl@slw.dk

2. © Johan Løje, 2009 2 Facts European Union –Union based on a treaty Council of Ministers European Parliament Memberstates –27 countries –494 mill people –GDP 15 trillion US $ –Great diversity among memberstates

3. © Johan Løje, 2009 3 Facts Denmark –Kingdom Parliament –5,5 mill people –43.000 km 2 –GDP 196 billion US $ –Homogeneous country

4. © Johan Løje, 2009 4 Facts ChinaEUDenmark GDP (bill. US $) 7.91615.247204 Inhabitants (mill.) 1.3004945 GDP pr. capita 3.25929.90062.097

5. © Johan Løje, 2009 5 Corruption in OECD Source: Transparency International (2008)

6. © Johan Løje, 2009 6 Legal framework of EU EU-treaty EU legislation –Regulations –directives National laws

7. © Johan Løje, 2009 7 Legal framework of EU re. corruption JOINT ACTION of 22 December 1998 adopted by the Council of EU Criminal law convention on Corruption (1999) Group of states against corruption (GRECO) convention National laws

8. © Johan Løje, 2009 8 Issues “Corruption threatens the rule of law, democracy and human rights, undermines good governance, fairness and social justice, distorts competition and hinders economic development” (source : Criminal law convention) corruption distorts fair competition and undermines the principles of openness and freedom of markets, and in particular the smooth functioning of the internal market, and also militates against transparency and openness in international trade (source : JOINT ACTION of 22 December 1998 adopted by the Council on the basis of Article K.3 of the Treaty on European Union, on corruption in the private sector )

9. © Johan Løje, 2009 9 JOINT ACTION – active corruption Active corruption in the private sector is a –Deliberate action –of whosoever –promises, offers or gives, –directly or through an intermediary, –an undue advantage of any kind whatsoever –to a person, –for himself or for a third party, –In the course of the business activities of that person –In order that the person should perform or refrain from performing –an act, in breach of his duties,

10. © Johan Løje, 2009 10 JOINT ACTION – passive corruption passive corruption in the private sector is a –deliberate action –of a person who, in the course of his business activities, –directly or through an intermediary, –requests or receives –an undue advantage of any kind whatsoever, or –accepts the promise of such an advantage, –for himself or for a third party, –for him to perform or refrain from performing an act, in breach of his duties,

11. © Johan Løje, 2009 11 JOINT ACTION – measures Measures are to be taken –Cover conduct which involves, or could involve, the distortion of competition, as a minimum –within the common market, and –which results, or might result, in economic damage to others –by the improper award or improper execution of a contract

12. © Johan Løje, 2009 12 JOINT ACTION – liability of legal persons Legal persons must be held liable, if an act is committed for its benefit by: –any person, acting either individually or as part of an organ of the legal person, who has a leading position within the legal person, based on: a power of representation of the legal person, or an authority to take decisions on behalf of the legal person, or an authority to exercise control within the legal person, –as well as for involvement as accessories or instigators in the commission of such an offence

13. © Johan Løje, 2009 13 JOINT ACTION – liability of legal persons Legal persons must also be held liable, if an act is committed for its benefit as a result of: –lack of supervision or control by any employee or other person –when directing or working in any capacity for or on behalf of a natural or legal person operating in the private sector –making it possible to commission active corruption for the benefit of that legal person by a person under its authority

14. © Johan Løje, 2009 14 JOINT ACTION – liability of legal persons Liability of a legal person shall not exclude criminal proceedings against natural persons who are involved as –perpetrators, –instigators or –accessories in the active corruption

15. © Johan Løje, 2009 15 JOINT ACTION – penalties Laws must be passed to secure that active and passive corruption is punishable –To cover both the actual person involved and –the acting as an accessory in or instigator Criminal punishment must be –Effectively –Proportionately –Dissuasively Criminal punishment must at least include –deprivation of liberty which can give rise to extradition

16. © Johan Løje, 2009 16 JOINT ACTION – sanctions against legal persons Must be –effective, proportionate and dissuasive sanctions Shall include –Criminal and non criminal fines may include other sanctions such as: –(a) exclusion from entitlement to public benefits or aid; –(b) temporary or permanent disqualification from the practice of commercial activities; –(c) placing under judicial supervision; –(d) a judicial winding-up order.

17. © Johan Løje, 2009 17 Criminal law Convention (CLC) Acts covered by the convention –Bribery of officials and private individuals Passive Active –Trading in influence –Account offences Jurisdiction Corporate liability Sanctions and measures –Specialized authorities –Co-opreation –Protection of collaborators and witnesses –Gathering of evidence –International cooperation

18. © Johan Løje, 2009 18 CLC - Bribery Covers both –domestic public officials, –Foreign public officials –Any person, who direct or work for a private sector entity –Officials of international organizations –Members of international parliamentary assemblies –National or international judges –anyone who asserts or confirms that he or she is able to exert an improper influence over the decision-making of any of the above persons the promising, offering or giving by any person, directly or indirectly, of any undue advantage to any of its public officials, for himself or herself or for anyone else, for him or her to act or refrain from acting in the exercise of his or her functions

19. © Johan Løje, 2009 19 Account offences An account offence is creating or using an invoice or any other accounting document or record containing false or incomplete information; unlawfully omitting to make a record of a payment. In order to commit, conceal or diguise the offences mentioned above

20. © Johan Løje, 2009 20 Jurisdiction A Party has jurisdiction when an –offence is committed in whole or in part in its territory; –offender is one of its nationals, one of its public officials, or a member of one of its domestic public assemblies; –offence involves one of its public officials or members of its domestic public assemblies or any person referred to in Articles 9 to 11 who is at the same time one of its nationals.

21. © Johan Løje, 2009 21 Corporate liability legal persons can be held liable for the criminal offences of active bribery, trading in influence and money laundering established in accordance with this Convention, committed for their benefit by –any natural person, acting either individually or as part of an organ of the legal person, who has a leading position within the legal person, based on: a power of representation of the legal person; or an authority to take decisions on behalf of the legal person; or an authority to exercise control within the legal person; –as well as for involvement of such a natural person as accessory or instigator in the above-mentioned offences.

22. © Johan Løje, 2009 22 Sanctions The sanctions imposed must be –Effective, proportionate and dissuasive sanctions and measures, including, when committed by natural persons, penalties involving deprivation of liberty which can give rise to extradition The sanctions for legal persons must also be –criminal or non-criminal sanctions, including monetary sanctions

23. © Johan Løje, 2009 23 Sanctions – 2 Sanctions must involve the right to –confiscate or otherwise deprive the instrumentalities and proceeds of criminal offences established in accordance with this Convention, or property the value of which corresponds to such proceeds

24. © Johan Løje, 2009 24 Authorities The authorities available to fight corruption must be –persons or entities specialized in the fight against corruption with –necessary independence in accordance with the fundamental principles of the legal system of the Party –effectively and free from any undue pressure –adequately trained and with financial resources

25. © Johan Løje, 2009 25 Witness protection effective and appropriate protection must be available for those –who report the criminal offences –otherwise co-operate with the investigating or prosecuting authorities –witnesses who give testimony concerning these offences

26. © Johan Løje, 2009 26 Facilitate the gathering of evidence Measures must facilitate the gathering of evidence related to criminal offences –identify, trace, freeze and seize instrumentalities and proceeds of corruption, or property the value of which corresponds to such proceeds liable to measures –empower its courts or other competent authorities to order that bank, financial or commercial records be made available or be seized Bank secrecy shall not be an obstacle

27. © Johan Løje, 2009 27 Implementation The Group of States against Corruption (GRECO) shall monitor the implementation of the convention

28. © Johan Løje, 2009 28 GRECO Organization to monitor fight against corruption –Located in Strassbourg –The Group of States against Corruption (GRECO) shall monitor the implementation of the convention

29. © Johan Løje, 2009 29 International Cooperation The parties must cooperate according to available international instruments

30. © Johan Løje, 2009 30 International Cooperation International cooperation shall include –Prompt processing requests from authorities that, in conformity with their domestic laws, have the power to investigate or prosecute criminal offences –Mutual legal assistance under paragraph 1 of this article may be refused if the requested Party believes that compliance with the request would undermine its fundamental interests, national sovereignty, national security or ordre public Parties shall not invoke bank secrecy as a ground to refuse any co-operation

31. © Johan Løje, 2009 31 Bribery of officials in Denmark Active –Criminal Act art. 122 Those who unauthorized renders, promises, or offers someone, who act in Danish, Foreign or international official duty or assignments, gifts or other advantage in order to induce the person in question, is punishable with a fine, or imprisonment up until 3- years

32. © Johan Løje, 2009 32 Bribery of officials in Denmark Passive –Criminal Act art. 144 He who in exercise of his Danish, Foreign and international public affairs or assignments unlawfully receives, requires og let himself accept a gift or other advantages is punishable by law by imprisonment unto 6 years or in minor instances a fine

33. © Johan Løje, 2009 33 Bribery in private affaires Art. 299 –Covers both active and passive bribery –Covers also administration of public property by a private individual –Any contribution Against a fine or imprisonment up until 1 ½ years those are punished, who In connection with the administration of another persons property for himself or others unlawfully receives, requests or let himself obtains a gift or other advantage, as well as he, who gives, promises or offers such gift or other advantage

34. © Johan Løje, 2009 34 Bribery in private affairs - contribution Contribution to bribery is penalised according to art. 23 No matter –whether the contributor recieves any advantage himself –The criminal act is in fact perfected

35. © Johan Løje, 2009 35 Bribery in private affairs - Attempt Attempt to bribery is penalised according to art. 19 Does not apply if the perpetrator voluntarily withdraws from the action –Unles he does that because he is forced to do so

36. © Johan Løje, 2009 36 Bribery – liability of legal entities Art. 306 –Legal entities are liable for committing criminal offences Art. 27 –Criminal liability for a legal entity requires that within its boundaries a criminal offence is committed, which may be blamed on one or more people connected to the legal entity or to the legal entity as such.