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When commissions become corruption

When commissions become corruption

Worldwide bribery investigations

Given its seriousness, it’s one of a unique group of crimes – along with terrorism and war crimes – that the authorities can, and will, investigate worldwide. All that’s needed is a ‘close connection’ with the UK – including a person of interest just being a passport holder or ordinarily resident in the UK.

The UK’s Serious Fraud Office (SFO) acts as the focal point for any allegations of corruption by UK nationals or incorporated bodies overseas, while the City of London Police has an Overseas Anti-Corruption Unit with the specific function of supporting overseas corruption investigations undertaken by the SFO.

The idea that prosecuting authorities have tentacles that can reach worldwide is not limited to the UK. As with many areas of the criminal law, most countries’ laws are broadly similar, and both European Union (EU) and United Nations (UN) conventions provide for international co-operation with regard to both the investigation and prosecution of bribery and corruption.

While the reach of US law enforcement agencies is equally global in nature, a slight difference can be seen in their approach. The US Foreign Corrupt Practices Act of 1977 allows payments to be made to foreign public officials to facilitate or expedite their performance of the duties they’re already bound to perform, even if this still violates local laws. So making a payment to an official to speed up a visa application, for example, would be acceptable.

In addition to the threat of prosecution, an owner may sue an employee or other agent for any loss – and, while a criminal conviction is not necessary for a civil action, it would be undeniable proof of civil liability.

The owner may also be able to withdraw from the contract agreed to by the agent, whether or not he or she brings an action against the agent. This option may be useful if, for example, the owner has managed to find a better deal elsewhere.

While it might seem that the authorities are coming down rather hard on corruption, it’s not because they are spearheading a moral crusade. It’s simply because corruption distorts rational product and service choices, which can ultimately prevent the cream of the industry from rising to the top, distort markets, and threaten economic growth.

Benjamin Maltby is an English barrister with consultants MatrixLloyd, providing impartial guidance on all aspects of large yacht purchase, building, ownership and operation.

Originally published: October 2008. Updated August 2012.

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