Bribery of an agent or official of a foreign body has been a crime in the UK since 1906. Previous uncertainty had led to amendments in 2002 to clarify the foreign scope of bribery offences. However, the case of R v Ail, GH & RH [2016] EWCA Crim 2, in the context of bribes allegedly paid in the transport/power sector, confirmed that even prior to 2002 the offence was not restricted to bribing officials of UK public and private bodies. The decision is likely to impact several other pending prosecutions and investigations which the SFO is currently pursuing. 

The question before the Court of Appeal was whether, prior to 2002, it had been an offence in the UK to bribe the agent of a foreign principal or body.

Transport, power and bribes

The underlying criminal case is on-going and therefore subject to reporting restrictions, however it is understood that the SFO is prosecuting an English subsidiary (the Company) of a multinational conglomerate that operates in the power generation and transport sector. It is alleged that the Company paid bribes, disguised as "consultancy payments", to agents of foreign organisations in India, Poland and Tunisia. The Chairman and Chief Executive of the Company and the Managing Director of the group's Indian subsidiary stand accused of arranging the payments.

The territorial jurisdiction to try these offences was not in question as the allegedly corrupt payments had come from UK bank accounts, and hence the actus reus had occurred in the UK. However, in a preparatory hearing under s7 Criminal Justice Act 1987, His Honour Judge Pegden QC, sitting at the Southwark Crown Court, had ruled that (prior to amendments contained in the Anti-Terrorism, Crime and Security Act 2001 (the 2001 Act)) the corruption offences under s1 Prevention of Corruption Act 1906 (the 1906 Act), were limited to the bribing of agents of UK public or private bodies.

This had the effect that those of the allegedly corrupt payments that occurred before 14 February 2002 (when the amendment in the 2001 Act took effect) could not have constituted offences. The SFO appealed this ruling.

The Court of Appeal reversed the first instance ruling as they were satisfied that even prior to the amendments in the 2001 Act it was an offence under s1 1906 Act to corrupt the agent of a foreign principal or body.

Section 1 of the 1906 Act made it an offence to corrupt any "agent" in respect of the affairs of his "principal". It was common ground that there was no direct authority on the point, nor did the Parliamentary proceedings provide any assistance. Hence the court approached the question as a matter of interpreting whether the plain, ordinary and natural meaning of "agent" and "principal" included foreign persons or bodies. The court acknowledged the particular need for legal certainty in criminal matters, albeit a need for "sufficient rather than absolute certainty".

The definition of "agent" and "principal" in the 1906 Act were wide and non-exhaustive: for example an agent "includes any person employed by or acting for another". The court held that the intention of the definitions was to evoke the ordinary meaning of "agent" rather than the narrower technical meaning under the law of agency.

The court noted that, in the context of the expansion of global trade, early 20th century legislators would not have had difficulty in using "agent" and "principal" to include foreign bodies. The terms agent and principal were neutral as to nationality and location. There was nothing in the 1906 Act to limit or to restrict the offences to UK agents and principals and if Parliament had intended to make such a restriction it would have done so. The court agreed with the view of the Law Commission's 1998 report that the law had covered corruption of foreign agents and principals even before 2002. The 2002 amendments had been made to clarify the legislation.

Comment: This is the second time that the Court of Appeal has assessed the scope of the 1906 Act in recent years and broadly found in favour of the SFO. In the first case (R v J & ors [2013] EWCA Crim 2287), the court found that the prosecution did not have to prove that the principal did not consent to the bribe (albeit it found that often an offence would not have been committed where the defendant could prove that the principal had in fact so consented).

Here, the Court of Appeal showed again that it is not afraid to take an expansive approach to interpreting the scope of historical offences. This is despite the accepted principles that criminal statutes should be construed narrowly and that the need for certainty in criminal law is paramount. That said, in the context of the extra-territorial reaches of modern anti-corruption regimes it is unsurprising that the court rejected the public policy argument that criminalising the bribery of foreign bodies amounted to illegitimate interference with activity that may be lawful in the affected country.

This decision will give the SFO more teeth in a number of cases currently going through the courts and under investigation. While not nearly as far-reaching as the Bribery Act 2010, the extra-territorial impact of this offence may provide further trouble for suspects and defendants that had previously believed that historic conduct in relation to foreign bodies could not constitute an offence.