International - Written by Barry & Richard on Friday, December 12, 2014 2:51 - 0 Comments
The Corruption Enforcement View from Norway By Frode Elgesem, Thommessen, Norway
Norway may be no. 5 on the Transparency International Corruption Perception Index published last week. But it isn’t corruption free. Todays article is from friend of thebriberyact.com, the excellent Frode Elgesem. Frode gives us the Norwegian legal context and a run down of recent cases and a taster of things to come with the next cases slated for January 2015.
By Frode Elgesem – Partner Thommessen, Oslo Norway Enforcement in Norway shed light on general issues pertaining to the application of anti-corruption legislation.
The ambition behind the 2003 reform of Norway’s anti-corruption legislation was no less than to establish the world’s strictest regime. The legislation has wide international reach and covers both bribery committed in Norway and in any other place in the world. Bribery outside Norway involving only foreigners is also covered. Prosecution in such cases is absolutely thinkable when there is a Norwegian nexus, but requires a separate decision by the King in Council (i.e. the Government).
Norwegian legislation makes it an offence to offer, give, request or receive a bribe. The legislation applies to the private and public sector alike, but in practice a stricter assessment will be applied to a public official – especially in cases near the low limit of corruption (e.g. assessing the proper limits for hospitality, gifts and “business dining”). It is an offence to bribe foreign officials as well as Norwegian officials. Facilitation payments fall within the definition of corruption in the Penal Code and is thus prohibited.
Both private individuals and legal persons (i.e. companies) can be prosecuted for corruption. Criminal liability for companies requires, however, that an individual has violated the penal provision “acting on behalf of” the company.
In addition, criminal liability depends on the prosecuting authority’s – and eventually the court’s – discretion, taking into account a wide range of considerations. An important consideration in corruption cases is whether the company could have prevented the criminal act through guidelines, instructions, control, education, etc. In this assessment the National Authority for Investigation and Prosecution of Economic and Environmental Crime (ØKOKRIM) (the agency that are responsible for investigation and prosecution of the most complex and severe corruption cases in Norway) is heavily inspired by the Six Principles for adequate procedures that can be found in the Ministry of Justice’s Guidance to the UK bribery act.
Bribery can be punished with fines and – for individuals – also prison. The prison sentence can be up to 10 years in cases of aggravated corruption. There is no fixed limit for fines. Proceeds from the corrupt activity can and will be confiscated. DPAs are not known in Norwegian criminal procedure, but many corruption cases – typically charges against companies – are settled out of court, by way of accepting a fine (and confiscation) proposed by the prosecuting authority in a penalty notice.
A separate provision in the Criminal Code prohibits trading in influence, but with a more lenient punishment. Thus, it is an offence to give, offer, request or receive an improper advantage in return for influencing the conduct of any position, office or assignment. In these cases, the boundary against legitimate lobbying is complicated. In general, the degree of openness regarding the lobbyist’s assignment is an important factor for drawing the line.
Relative to its population and size of the economy, Norway has seen enforcement of anti-corruption laws in quite many cases since the legal reform in 2003. These cases involve many issues that will be familiar to any lawyer working with anti-corruption, and will thus shed light on some general issues of interpretation and application of anti-corruption laws. Let’s have a look at two of them:
In September this year, the Supreme Court handed down a judgment dealing with the definition of the low limit of corruption.
A production manager in a publicly owned company responsible for the public transport in the Oslo area, had been convicted and fined by the City Court for – over a period of two years – having accepted three business dinners paid by representatives of a bus manufacturer. The total value of the dinners was equivalent to approximately GBP 450.
The key point for the prosecution was that the production manager was central in developing the specifications for busses that should be purchased for public transport, and that the bus company had an interest in influencing these specifications. However, the Court of Appeals acquitted the production manager, and the Supreme Court upheld that acquittal upon appeal from the prosecuting authority. The Supreme Court reiterated that a criminal conviction for corruption presupposed that the act at issue was “clearly reprehensible”.
The facts showed that there was no intention to influence concrete decisions and the dinners were not arranged in relation to any upcoming procurement decisions. Thus, there was no element of influence that in itself could underpin a reprehensible conduct. In this situation, the Supreme Court distinguished between an advantage of permanent nature and an advantage that was consumed at the business relevant event (office translation):
“When an advantage is not of permanent nature, it is consumed in connection with the event that in itself is of relevance for the employee’s position, then it will normally not be appropriate to apply the anti-corruption provisions of the Penal Code. The relationship with ordinary customer care and traditional customer contact is so strong that it will take a lot for such events to be so overly costly that participation may be seen as improper. Naturally, the guest’s reasonable expectations will also be included in the assessment.”
At the other end of the scale, we find the corruption charges against the fertiliser giant Yara International ASA and four members of its top management. According to ØKOKRIM, the company had paid over 70 million NOK (approximately 6,8 million GBP) in bribes to public officials in Libya, India and Russia. In January this year, the company, Yara, accepted a fine of 270 million NOK (approximately 25 million GBP). In addition 25 million NOK was confiscated. This was by far the largest fine ever in a Norwegian corruption case.
The court trial against the managers that were individually charged will commence in January 2015. The case involves a number of interesting issues, including the allegation that the payment of bribes was “entrenched” in the top management. The trial and eventually the court’s judgment will be of great interest for the understanding of how and when top management involvement may entail criminal liability for corruption.