Anti-Corruption Regulation in Sweden and Abroad

Sammanfattning: The negative effects that corruption has on both individual nations and the global society as a whole are known and well documented. Still, an estimated one trillion US dollars (US $1.000 billion) is paid each year in bribes worldwide and both individuals and organizations testify to engaging in corrupt behavior. The interest in fighting corruption has grown significantly in recent years, both in individual nations and within the international community. Compliance with the American legislation on bribery and corruption, the Foreign Corrupt Practices Act (FCPA), has become one of the most important compliance issues for multinational companies, both US and non-US, and one of the most prioritized parts of due diligence in relation to mergers and acquisitions. The FCPA is designed to deter improper inducements to foreign officials in connection with business activities and in doing so it consists of two major components namely, the accounting and record-keeping provisions and the anti-bribery provisions. The anti-bribery provisions apply to both physical and juristic persons and criminalize corrupt payments of foreign (non-US) government officials for the purpose of obtaining business. The United Kingdom recently enacted a reconstructed anti-bribery law, the Bribery Act 2010 (Bribery Act), with far-reaching exterritorial effects. The Bribery Act introduces a specific offence applicable to corporations failing to prevent acts of bribery committed by employees or agents. The basic provisions on bribery and corruption in Swedish law are found in the Penal Code of 1962 (Penal Code), where passive bribery and active bribery are separated as two different offences, listed in different chapters of the Code. Swedish anti-bribery law may soon be subject to change as an Inquiry has been appointed by the Swedish government to investigate and evaluate Swedish law in the area of anti-bribery and corruption. The Inquiry recently presented a report containing proposed changes of the bribery provisions of the Penal Code and a Code on Gifts, Rewards and Benefits in the Business Sector. The overlying purpose of the proposed changes of the Swedish Penal Code presented by the Inquiry is to update Swedish anti-bribery law making it clearer and easier to understand and to apply. In order to do so, the Inquiry proposes structural change, organizing the bribery offences in one single chapter of the Penal Code - namely current chapter 10 with the proposed title of “On Embezzlement, Other Breaches of Trust and Bribery”. However, the structural arrangement proposed by the Inquiry is misleading as it puts a disproportionate focus on breach of trust. As analyzed in this thesis there are a number of advantages to be obtained by regulating bribery in a separate law or in a separate chapter of the Penal Code. Among a number of material changes, the Inquiry proposes that the key element of improper reward is to be replaced by improper influence. However, the problem of what is to be considered improper remains. The Inquiry has to some extent made interpreting the bribery provision and its key elements easier, by providing for sub-sections. The sub-sections highlight that there are different interests protected by the provision on bribery. However, to fully eliminate the problem a clearer separation of the different sets of interests protected by the provisions on bribery is required. The different aspects taken into consideration when determining what is to be deemed as improper should be reflected in the statutory language of the bribery provisions. Even though the change proposed by the Inquiry is important since it is indeed the effects of a given reward that are improper and unwanted not the reward itself, the proposed change does not make it easier to differentiate a proper reward from an illicit bribe. The purpose and the field of application of the Code on Gifts, Rewards and Benefits in the Business Sector, proposed by the Inquiry, need not only be clarified but analyzed and questioned. The code is intended to provide for a buffer for the corporations and organizations that choose to follow it, as the provisions of the code are stricter and reach further than the provisions of the Penal Code. Corporations who choose to implement the code and be in compliance with it, are intended to be able to feel fairly confident that they are not offending the bribery provisions of the Penal Code. It is unclear however, what the consequences will be if a corporation, accidentally or intentionally, offends the provisions of the code. Self-regulation and ethical rules are indeed very welcomed as part of maintaining good business practice and there should be incentives for corporations and organizations to put forward and adhere to ethical standards. But when linking these ethical rules and standards to the law, one should do so with care. There is a risk of developing a notion that what is unethical consequently is unlawful, which would undermine the purposes of self-regulated codes such as the Code on Gifts, Rewards and Benefits in the Business Sector, discouraging corporations from voluntarily committing to ethical standards higher than the ones provided for by law. The Bribery Act, when it comes into force, will have a significant impact on multinational corporations. The Bribery Act applies to all corporations incorporated in the UK and in terms of the offence failure of commercial organizations to prevent bribery to all bodies or partnerships that carry on a business or part of a business in any part of the UK. Thus its exterritorial jurisdiction is broad. Two important questions in regards to the offence failure of commercial organizations to prevent bribery are (i) what “carrying out part of a business in the UK” really means and (ii) what “an associated person” will come to mean and thus whose actions a corporation is responsible for. Employees, agents and subsidiaries will most likely be presumed to be associated with a corporation, for the purpose of this offence, but what other business associates, performing services for or on behalf of a corporation, will come to be included? These questions are analyzed in this thesis. Unlike the Bribery Act and the Swedish Penal Code, the FCPA provides for an affirmative defense for reasonable and bona fide business expenditures related to certain company promotions. The Bribery Act sets itself apart from both American and Swedish anti-corruption regulation in that it is not necessarily a defense to state that the illicit payment was permitted under the written laws of the country where the act took place. In theory one can be held liable for bribery, under the Bribery Act, even if the written laws of the jurisdiction where the act took place permitted the act. These as well as other differences between the respective laws are analyzed in this thesis. Swedish, British, American and multinational corporations and organizations with some form of connection to either of these countries are all affected by the anti-corruption regulations presented in this thesis. Accordingly, being aware of the jurisdictions an organization is exposed to and making sure that the organization is in compliance with the anti-bribery and corruption laws of those jurisdictions is of the utmost importance. If not, both organizations and individuals risk facing considerable sanctions such as several years of imprisonment, unlimited fines, considerable legal costs, debarment from public procurements and a damaged reputation. A well crafted compliance program does not only provide for sound corporate conduct preventing acts of corruption from taking place, but will also serve as a vital component when trying to limit or cut off liability as well as arguing for a reduced sentence when acts of corruption have taken place. As a corporation can be found liable for the acts of subsidiaries, agents and other business partners, it is also important to perform adequate due diligence before entering into these types of business relations. The basic components of a compliance program include top level commitment, risk assessment, clear and accessible policies and procedures, effective implementation, monitoring and review as well as performing due diligence of business partners and middlemen. Successful action against corruption is impossible without the combined efforts of governments, individual organizations, corporations and people. And a corporation choosing to be in compliance with anti-bribery and corruption law does so, not only to the benefit of social justice and global and national economic growth but also to the benefit of its own profitability.