ANTIBRIBERY FUNDAMENTALS

Regulatory affairs involve regular transactions with government officials in their respective offices as FDA, PDEA, DDB, PNRI, PNP, NTC, OMB and DENR to name some. Therefore it is important for a regulatory affairs professional to be able to identify if his actions are leaning towards bribery. Bribery is defined as the act of influencing a government official by offering anything of value to gain an improper advantage. By being familiar with the basic principles of antibribery laws and conventions; the elements of bribery; how to recognize bribery and how to avoid it will keep the regulatory affairs professional safe as well as the company he is working for. This feature will attempt to give a related and simplified information on bribery applicable to regulatory affairs professionals.

Throughout the world, antibribery conventions are in place. The established ones are that of (1) United nations, (2) Organization of Economic Cooperation and Development (OECD), (3) Council of Europe, (4) the European Union, (5) Organization of American States and (6) the African Union. In the USA, the Foreign Corrupt Practices Act (FCPA) is in place. The FCPA covers non-US government officials (yes!); political candidates and political parties; and public companies. It is important to note therefore that this Act applies to US companies, nationals and residents regardless of whether the bribery related activities take place in the US or elsewhere like the Philippines. Further, this act holds US companies that they may be liable for the violations of their non-US subsidiaries, employees and agents (example is GSK in China, 2014). This Act also applies to non-US companies and individuals if they use the US mails or other forms of interstate commerce to bribe non-US officials. Even the non-US companies that file reports at the US Securities and Exchange Commissions (SEC) may also be held liable. The UK Bribery Act is another important convention, this act covers anyone and not just the government officials who accepted bribe or “kick backs” in exchange for improperly performing public, business-related or employment-related functions. Any commercial entity that is organized or does business in the UK is automatically liable if someone who’s associated with it, such as an employee or even agent commits bribery on its behalf, there is therefore a huge burden for the regulatory affairs professional to act appropriately as a compliance to this Act. Bribery charges in the UK may be avoided though if the company can show that it has adequate procedures in place to prevent bribery. The EU convention on the other hand, that covers all the 28 member states enforces that each state must enact laws prohibiting the bribery in EU and that those laws may apply to people or entities outside EU. If more than one EU member state though is affected in the bribery, it is up to the member states involved to decide who will deal with the bribery act. The OECD composed 38 countries wide (excludes the Philippines) also enforces bribery vigilance regardless of where the business dealings take place.

In the Philippines, the main legal framework for bribery is RA 3019 (The Anti-Graft and Corruption Practices Act) which prohibits requesting or receiving any gift, present, share, percentage or benefit, for himself or for any other person, in  connection with any contract or transaction between the government and any other party, wherein the public officer in his official capacity has to intervene under the law, among other things. RA 6713 (The Code of Conduct and Ethical Standards for Public Officials and Employees) also prohibits public officials and employees from soliciting or accepting, directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value from any person (a) in the course of their official duties; or (b) in connection with any operation being regulated by, or any transaction which may be affected by, the functions of their office. Presidential Decree No. 46 (Giving of Gifts on any Occasion) also punishes the act of giving or offering to give, to a public official or employee, a gift, a present or other valuable thing on any occasion.

Bribery is composed of 3 key elements: the government official, anything of value and improper advantage. Government official applies to non-US officials as well for the FCPA. In UK, a government official is defined as somebody holding legislative and administrative or judicial or exercises a public function. Officials of public international organizations like the UN are also considered government officials. In EU, officials of the EU member states are covered noting that a national official varies in each of the member states. In OECD, foreign public officials are also included and even agents of international organizations like NATO (North Atlantic Treaty Organizations). In the Philippines, the law currently do not penalize the corruption of foreign public officials. The second key element which is – anything of value includes any sum or gift if its intention or effect is to cause undue influence. A promise or offer of a gift is also considered as bribery. It is therefore important that a Regulatory affairs professional observes gift giving at an appropriate time and in appropriate circumstances and manner (esp. this coming Christmas season). In the Philippines, domestic bribery in private to private is not regulated neither penalized. The last key element which is – improper advantage is as defined. It is important to note however that the FCPA provides exception to this to speed up or secure performance in activities as obtaining permits, processing government papers, police protection and for paying phone service, electricity and water supply. In the Philippines, facilitation payments are not allowed under Philippine anti-bribery and anti-corruption laws, as payments to public officials by reason of their official position are penalized.

 There are 3 kinds of bribery in the Philippines, (1) direct bribery, (2) indirect bribery, and (3) qualified bribery. Direct bribery is committed by a public officer who accepts an offer or promise or receives a gift or present, by himself or through another, with a view to committing a crime, or in consideration of the execution of an act that does not constitute a crime but is unjust, or to refrain from doing something that it is his official duty to do. Indirect bribery is committed by a public officer who accepts a gift offered to him by reason of his office and Qualified bribery is committed by a public officer entrusted with law enforcement, who refrains from arresting or prosecuting an offender who has committed a crime punishable by imprisonment of 20 to 40 years and/or death, in consideration of any offer, promise, gift or present. The maximum penalty for direct bribery is 12 years in prison and a fine of not less than 3 times the value of the gift or the promised gift. For indirect bribery, imprisonment for maximum of 6 years plus suspension and public censure. The penalty for qualified bribery is the penalty for the offense that was not prosecuted

How do we avoid bribery then? A company should not engage in any agents or hire employees who has a family or business ties with government officials, anybody with a reputation for corruption and those who refuses to sign a written anti-bribery and corruption agreement. Pre-employment questions/information may be sought for like the educational and professional background, how long is the person been employed in the government or has the firm been owned by the government in the first place, the details on commission fees should be disclosed as it may be questionable if it is too high, if there are complex payment structures leaning to bribery and if the agent or employee is open to his methods in doing business. It is important to note that one or more laws may apply in bribery and that there are serious consequences involved when one is proven to be involved in bribery like stiff penalties in the form of fines and prison terms. On the other hand, it is also damaging to the company as the company may be excluded from public sector contract and that the company reputation will also suffer. A regulatory affairs professional should be wise enough to evaluate his actions as part of the daily routine is transactions with people at the government.