International - Written by Barry & Richard on Wednesday, January 16, 2013 2:07 - 1 Comment
Focus on Finland 1: Markus Kokko of Borenius on bribery law in Finland
Regulation of Bribery in Finland
Bribery is a very current topic in Finland, with many cases pending before the courts and several preliminary investigations going on. In 2010, the police registered a record of 20 reports of suspected bribery offences. New suspicions of bribery emerge regularly, and 2012 has seen decisions handed down in some high-profile cases.
Finnish legislation on bribery is fairly strict. The Criminal Code contains over a dozen sections dealing with bribery, including provisions prohibiting the giving and acceptance of bribes by public officials and elected Members of Parliament. Bribery in business is covered as well.
It is not always easy to determine in advance whether a particular benefit might be considered a bribe since the applicable law lacks threshold values. The Courts have the final say on the matter and, as bribery legislation is interpreted strictly, caution should be exercised. To aid public officials in assessing the acceptability of benefits, the Finnish Ministry of Finance has issued two sets of guidelines: one on trips paid by third parties and another on hospitality, benefits and gifts.
This article gives a brief overview on how bribery is regulated in Finland, beginning with a description of the bribery provisions in the Criminal Code. This is followed by a description of the Ministry of Finance’s guidelines. Finally, we take a look at two recent bribery cases.
2. Criminal Code
2.1 Elements of Bribery
The provisions prohibiting bribery and aggravated bribery can be found in Chapters 16 and 40 (public officials and elected Members of Parliament) and Chapter 30 (bribery in business).
2.1.1 Bribery of Public Officials and Members of Parliament
Most bribery cases which came to light in Finland during the early 2000’s were relatively minor offences where public officials were offered a benefit, often money, in exchange for some official waiving measures. Typically, the public official did not accept the offered bribe. The recent police data indicates a change in the structure of bribery offences, with more suspicions involving high-level officials who play a significant role in public decision-making.
Public officials include persons elected to a public office, employees of public corporations, foreign public officials, persons exercising public authority and soldiers. A bribe is a promise, offer or provision of a benefit with a factual, intended or likely influence on the actions of a public official in the exercise of their service. The offeror must have been aware of the acceptor’s capacity as a public official as well as the effect of the bribe on the exercise of the public official’s service.
The promise, offer or provision of a benefit to a Member of Parliament is forbidden unless it can be considered customary hospitality. Intent is a necessary element of the offence: the offeror of the bribe must have intended that the Member of Parliament act in a certain way.
In order to be charged with acceptance of a bribe, a public official must have taken initiative in order to receive the benefit while in service. A Member of Parliament must have taken initiative and acted or intended to act in a certain manner in their parliamentary mandate.
It should be noted that giving benefits to third parties may also constitute bribery if it can be assumed, based on the nature of the relationship between the public official and the third party, that the benefit may affect the public official’s actions.
2.1.2 Bribery in Business
In Finland, reports of suspected bribery in business are less common than reports of bribery involving public officials, with only a couple of cases registered annually. However, the police estimates place the frequency of bribery in business at the same level as other types of white-collar crime, i.e. high.
Bribery in business refers to the promise, offer or giving of an unlawful benefit to:
1) a person in the service of a business;
2) a member of the administrative board or board of directors, the managing director, auditor or receiver of a corporation or of a foundation engaged in business;
3) a person carrying out a duty on behalf of a business;
4) an arbitrator solving a dispute between businesses, other parties or a business and another party.
The offeror must have intended the bribed person, in their function or duties, to favour the offeror or another person. A reward for such favouring may also be considered a bribe. A person who takes an initiative toward receiving an unlawful benefit is guilty of acceptance of a bribe. According to police data, acceptors of bribes typically try to hide their actions from their employer, whereas offerors often act to benefit their employer.
2.2 Threshold of Bribery
The Criminal Code does not prescribe threshold values which, if exceeded, make benefits unlawful, and in principle the economic value of a benefit has no relevance. However, the value of a benefit may be interpreted to reflect its uncommonness and, for example, show the offeror’s intention to influence. Possible unlawful benefits include money, jewellery, significant discounts, recreational trips and abundant hospitality. Benefits which contain sentimental value, such as honorary titles or badges of honour, may also be unlawful. Special caution should always be exercised when giving benefits to a public official whose tasks include attending to public procurements.
When assessing the acceptability of a particular benefit, the Finnish Courts have often considered whether accepting a benefit was necessary with regard to the public official’s duties. For example, if the public official’s regular duties include attending to the public relations of the office, the Court is more likely to accept benefits such as customary courtesy gifts. As regards business, it is acceptable to give birthday presents to persons employed by other corporations. Customary promotional gifts and reasonable courtesy gifts during festive season are also acceptable.
In general, the threshold of bribery in business is higher than the threshold applicable to public officials and elected Members of Parliament. In the corporate world, fostering loyalty between the entrepreneur, the company and its employees is considered a legitimate interest. By contrast, public officials and Members of Parliament must always remain impartial and act in accordance with laws and regulations while in service or exercising their parliamentary mandate.
Sanctions for violating the bribery provisions in Chapters 16, 40 and 30 of the Criminal Code range from a fine to imprisonment for up to four years. A public official may also be removed from office. Corporations in which operations a bribery offence has been committed may be sentenced to a fine even if the offender cannot be identified or otherwise is not punished. The corporate fine is imposed as a lump sum ranging from EUR 850 to EUR 850,000.
A person accused of giving or accepting a bribe may defend themselves by claiming that not all of the essential elements of the bribery offence in question are fulfilled. Lack of intent is often used as a defence.
3. Guidelines by Ministry of Finance
In May 2001, the Ministry of Finance provided guidelines for trips paid by third parties. These were followed in 2010 by guidelines on hospitality, benefits and gifts (later on referred to as “benefits”). The guidelines apply to public officials and employees of the state and the purpose of these is to clarify what is acceptable and what is not.
According to the 2001 guidelines, the main rule is that the costs of public officials’ trips are covered by the relevant public office. Where a third party covers the costs, the statutes regarding bribery must be taken into consideration, and any payments must be approved by the public official’s superior.
Benefits referred to in the 2010 guidelines must be appropriate, conventional, moderate and of reasonable value to be acceptable. Public officials must notify their superiors of all benefits offered to them. Prima facie inappropriate benefits must be refused.
The acceptability of benefits is assessed by taking into account the circumstances as a whole. The following are examples of the factors which shall be taken into account:
- the value of the benefit offered
- whether or not the benefit is customary
- the role of the offeror with regard to the public official
- the expectations of the offeror towards the public official
- whether there are matters concerning the offeror pending before the state authority in question
- the risk of the benefit jeopardising the impartiality of the public official
Since the guidelines are merely guidelines, there are no explicit sanctions for violations. However, actions that are not in line with the guidelines may more easily be interpreted to constitute bribery.
Markus heads Attorneys at law Borenius’ Dispute Resolution and Insolvency Group. Markus advises regularly in white collar crimes.
Borenius was Established in 1911, Attorneys at law Borenius is one of the largest and most experienced law firms in Finland.