20 Apr 2022
Bribery is a verb that cannot have a set definition. Still, it can be understood as a deliberate act committed by an individual in an appointed position towards breach of trust in lieu or exchange for a benefit or advantage. These advantages can be in any form, such as cash or lavish gifts, loans, fees, rewards, services, donations, or return the favor to any family or friend.
In other words, bribery can be defined as the making of any promise, requesting or accepting, offering or soliciting of an advantage, benefit, or incentive as an inducement a public official or a direct or indirect person who manages or is employed by a legal entity, for an action which is illegal, immoral or unethical or a breach of trust.
The act of bribery generally involves at least two individuals and has two kinds:
- Active Bribery: An act of offering, promising, or giving a bribe is called ‘active bribery.’ For instance, giving bribes to a consultant to win public contracts or paying an extra tip to customs officials to expedite the passage of goods through a port.
- Passive Bribery: An act of requesting, receiving, or accepting a bribe, is called ‘passive bribery.’ For instance, a security officer in a company receives a bribe from people who want to commit theft, or a bank employee requests a bribe in exchange for details of the bank’s customers.
Both forms of bribery are outlawed and illegal in most countries. The United Arab Emirates(UAE) has had legislation for anti-bribery in place from the 1980s in the form of ‘the UAE Federal Penal Code,’ also referred to as The Code. As corruption impacts the country both politically and economically, the UAE authorities have sustained a sustained and diligent effort to eradicate corruption and its practice at all government levels. However, the authorities’ focus has primarily been on corruption at the government level. The Code also contains provisions that apply to the private sector. The word “bribe” has not been explicitly defined in the Code, but by the implication of the offenses of bribery, it can be understood as a gift or monetary benefit or any other form of advantage which is offered or received to induce a breach of performance or an illegal act from an official or an appointed personal. Since the UAE does not have stand-alone anti-bribery law, the offenses with respect to corruption and bribery are ruled as per overlapping and several distinct laws.
However, the key law governing bribery is Federal Law no. 3 of 1987 (the UAE Criminal Code). The Code rules the bribery and corruption offenses in all the seven emirates, including the economic free zones: the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), which have their own civil and commercial laws, but UAE criminal laws are applicable here. In that sense, UAE provides for broad application and governance of the anti-bribery laws and regulations. As mentioned above that the main federal law regulating anti-bribery practices in the UAE is The Code, it is important to mention the relevant articles. Articles 234 to 239 lays down the provisions which make the bribery or attempted bribery a criminal offense for both public and private sector employees. According to The Code, for an act to be considered bribery and anti-corruption offense, it has to comprise of the following factors:
- Making a promise, offering, or giving a bribe to an appointed person or a public
- Requesting, receiving, or accepting a bribe in any capacity of a public official.
- Purposefully aiding or abetting in the act of bribery.
- Play the role of an intermediary in a bribery transaction.
In 2016, the UAE refreshed and renewed the anti-corruption rules and legislation to strengthen its governance over these kinds of offenses. These initiatives are implemented with an objective to carry on the large anti-corruption drive in the Gulf region, which in turn will lead the country towards enhanced transparency and detailed scrutiny of anti-corruption activities. The establishment of new Dubai economic security “super-regulator” to monitor and combat corruption, aimed at the Dubai financial services sector, extending the anti-bribery legislation to the private sector (which makes bribery between private persons a criminal offense), increasing the cap on fines to private companies by ten folds and expanding its territorial reach (i.e. the Code will be applicable if the bribery offenses are committed outside the UAE where the criminal or victim of the bribery offense is a UAE national or a person hired by a UAE national) are some of the main modifications that have been made by the UAE government.
Companies should keep in mind the change mentioned above in order to invigorate their compliance policies and formulate training programs for their employees to make them aware of the anti-corruption laws. Limitation period regarding bribery offenses Interestingly, there is no limitation period for bribery and corruption offenses. This means that an anti-corruption activity or a cause of action arising from bribery can be reported to the office whenever it surfaces. The rule mentioned above was implemented in 2016 when the UAE needed to align itself with other international jurisdictions. Moreover, there is no limitation period for any civil actions brought in connection with bribery offenses. Defense In case a false bribery offense is registered against a public official or an individual, or a company, Self-reporting an anti-corruption act of bribery is a major clause for defense. The Code expressly lays down that if a briber or intermediary successfully “self-reports” a bribery act prior to its discovery, he shall be exempted from the penalty connected to the act. However, it is not explicitly mentioned if that briber or receiver would be exempt from the bribery or corruption offenses in other legislations.
Legal consequences
The Legal penalties in anti-corruption offenses are as follows:
- If proven guilty of committing a bribery offense, the offender can face imprisonment up to five years and an additional fine equal to the bribe, which is not less than AED5,000, for each and every offense.
- Since all private companies are liable for the criminal acts of their representatives, directors, or agents, in the case of bribery offenses, the offenders can receive an imprisonment sentence along with a fine of AED500,000 for each offense.
- If the bribery offense is proven, parent companies can also be made liable for a subsidiary’s involvement in that offense.
- If the act of bribery is proven, then the Proceeds of such an offense (e.g., bribes paid in cash or kind) will be confiscated.
- If the bribery offense is proven, then Intermediaries and accessories to such a crime may also be held liable. Companies can also face business disruption and risks of losing licenses and permits if a regulatory investigation is conducted.
Notably, in the UAE, the Public Prosecutor has the right and power to prosecute all matters relating to bribery and corruption. Consequently, it can be said that the UAE is well aware and conscious of the anti-corruption practices that are going on and is continuously taking steps in order to keep a check on bribery and similar offenses. In doing so, it can be predicted that the authorities in the near future may expand the provisions and its applicability of the Code to facilitate prosecution of bribery and other anti-corruption activities. Hence, it will be a smart step for individuals and companies to be aware of the changing laws and follow complete compliance.