First Edition, May 2018, published by Herbert Smith Freehills
1. What is the source of:
ABC legislation and regulations?
- Articles 186-193 of the Bahrain Penal Code, promulgated by Decree Law No.15/1976, as amended by Law No.1/2013 (the “Penal Code” or the “Law”), cover the offence of bribery in relation to civil servants. Articles 417-427 of the Amendment to the Penal Code (Law No.1/2013) cover the offence of bribery in the private sector.
- Bahrain has also signed and ratified the United Nations Convention against Corruption in Law (“UNCAC”), which has been implemented under Law No.7/2010. As UNCAC is mainly directive in nature, the anti-bribery provisions of the Penal Code are the main points of reference in investigations and prosecutions relating to bribery and corruption.
Local regulatory guidance in relation to the following types of activities: gifts, meals, entertainment, travel, sponsored training/conferences and other similar hospitality events?
- Local law/regulations do not provide guidance in respect of specific categories of bribes, rather the law provides provisions broadly prohibiting any bribes made in the form of substantial gifts or privileges of any kind whatsoever or a promise to be given the same.
2. What constitutes an ABC offence in Bahrain?
- The Penal Code criminalises bribery of civil servants entrusted with a public service as well as workers in private corporations. It is an offence to receive or offer gifts or privileges to a civil servant, company employee, board member or corporate trustee of a private corporate entity, as consideration for doing an act or omitting to do an act involved in his duties. It is also an offence to promise to give a gift or privilege of any kind in consideration of performing certain work or abstaining from performing the same, in breach of ones duties or in a manner detrimental to the interests of the employer or private corporate entity.
- It is immaterial whether the official, employee, board member or corporate trustee actually intends to perform or abstain from performing the act in question, and whether the act or omission does not constitute part of his duties. This is the case even if he/she has alleged or wrongly believed it to be part of their duties, and whether the bribe has been demanded or offered after having completed doing the act, or omitting to do such act, in violation of the duties of their office, or in relation to corporations, in a manner detrimental to the interests of the employer or private corporate entity.
- In early 2014, eight Bahraini officials were suspended in connection with 25 major corruption cases under investigation following National Audit Office report revelations. These include 13 violations at the Municipalities and Urban Planning Affairs Ministry, seven at Alba and one each at the Bahrain Flour Mills Company, the Bahrain Chamber for Dispute Resolution (BCDR-AAA), Bapco, the Works Ministry and the Housing Ministry.
- As of 21 January 2015, the Public Prosecution Office had received 36 corruption-related cases: 10 of these cases were referred to the Criminal Court for criminal prosecution, 12 were reserved for no further action and 14 cases are still pending investigation.
3. Are there any statutory defences provided under the relevant legislation, eg de minimis
exceptions – payments that are legal in the country in which they are offered, etc? What considerations will be taken into account, for example the purpose and frequency of the gift/ event, the cost to the organiser, the value of the benefit offered to the individual?
- The Penal Code provides for one mitigating factor, which is where a partner reports the offence to the judicial authorities or admits it before reference of the case to the court, the judge may exempt him from punishment, if such course of action is justified.
- Although the law does not entail monetary thresholds in respect of bribes, but criminalises bribery per se, the considerations which will be taken into account are the connection between the bribe, in whatever form offered or requested, and the action or omission expected or offered in return. In respect of events, the relation between the subject matter of the event and the person’s specialisation, whether in public office or a private company, and whether such are related or not, will be considered.
4. What kinds of gifts/entertainment/ advantages will be considered acceptable?
- The law does not specifically provide a limit on gifts offered or accepted. A gift of “modest value” may be permitted. For example, seasonal inexpensive gifts such as calendars and diaries can be given without concern. Further, gifts of modest value such as pen sets, company plaques, etc, particularly if they bear the donor’s name or logo, are customary and acceptable. However, other gifts which are offered individually may give rise to the appearance of impropriety and thus contravene the anti-bribery provisions.
- Travel and reasonable related expenses which are related to the invitees’ specialisation may be permitted, so long as no favour is being received or expected to be received in return. Also, it is customary that meals and hospitality may be provided when, for example, an official is visiting the donor’s facility.
5. What kinds of gifts/entertainment/ advantages will be considered unacceptable?
- The Penal Code does not provide a definition of “gift”, and the term is regarded rather generally. Moreover, the offence of bribery is covered by offering or accepting gifts and privileges, which allows for a wide interpretation of the term. Thus, gifts and lavish lunches and entertainment should be avoided as such may give rise to suspicion of intention to influence a favourable decision, in which case it may be considered to fall within the context of the bribery provisions of the Penal Code.
6. Are there any exemptions, for example “facilitation payments” – defined as payments made to procure “routine governmental action” – that “do not involve an exercise of discretion”, payments that “are legal in the country in which they are offered”, and “reasonable and bona fide expenses directly relating to the promotion of products or services”?
- There are no specific provisions in the law prohibiting “facilitation payments” as such; however, they may fall within the general definition of bribery.
- Article 32 of Decree Law No.36/2002, in respect of Tenders and Government Procurement, requires that a tender be refused in the event of the tendering party offering a bribe or inducement of any kind to an employee of the procuring entity or any other governmental authority, even if the tender application has satisfied all the necessary prerequisites and requirements. In this context, there may be Penal Code implications in respect of both the party offering the bribe and the party asking for or accepting it, in both the public and private sectors.
7. Does the law cover gifts/entertainment/ advantages which are given to spouses/relatives of public officers/civil servants, and/or companies in which the public officers/civil servants are directors/shareholders?
- Yes. The offence of bribery covers offering gifts or privileges or promises of the same in consideration of an act or omission involved in the duties of the officer or employee whether such bribe is accepted by himself or another person acting on his behalf.
8. What is the position in respect of charitable contributions to the Government and/or politically exposed persons (PEP)-connected local charities?
- There are no specific provisions under Bahrain law that prohibit making charitable donations. So long as such donations are not “facilitation payments” and that nothing is being received in return for the donation, then this may be permissible. In the event of such donation being asked for, accepted or offered in exchange of some favour, it may be considered a bribe under the Penal Code, and thus constitute an offence thereunder.
9. Do the ABC laws/regulations apply to the private sector or do they relate to the bribery of public individuals and/or bodies only?
- Yes. The offence of bribery has recently been extended by the Penal Code to cover the private sector, meaning the persons subject to anti-bribery laws shall include: (a) workers who are defined as every natural person employed for a wage of any kind and under the employer’s management and supervision; (b) every person who does or works or provides a service in any capacity without being under the management and supervision of the person for whom he performs the work or service; (c) private corporate persons; and (d) board of directors, board of trustees, chairmen, deputy chairmen and all members of the board irrespective of designation or formation.
10. What is the definition of a public body? Would it include persons working in stateowned/ controlled companies? Who is a public/ civil servant?
- The Penal Code provides a definition for civil servants only, who are entrusted with a public service, as: (a) persons in a position of authority, staff or government ministries, departments and local administrative units; (b) the armed forces personnel and servicemen; (c) members of councils and public representative units (whether elected or nominated); (d) every person authorised by a public authority to perform a particular task to the extent of the duties entrusted; (e) chairman or members of board of directors, managers and all staff of public institutions and organisations; and (f) chairmen and members of boards of directors, managers and staff of units belonging to public institutions and organisations. Term and nature of the relevant employment as well as remuneration do not have any bearing on the offence of bribery.
11. Would members of the Bahraini royal family be considered public officials by virtue of the fact that they are members of the royal family?
12. Does the Government issue internal regulations or codes of conduct applicable to public officers/civil servants?
- Such regulations are issued internally in the context of execution of the provisions of the law.
13. Are there any laws or regulations imposing obligations on persons to “whistleblow” or
disclose suspected corruption within an organisation?
- No; however, it may be viewed that it is considered as part of the civil servant or employee’s job to report such incidents to his supervisor or the relevant authorities.
14. Do the domestic ABC regulations have extra‑territorial effect? (Is bribery of foreign
public officials prohibited?)
- Domestic ABC regulations will not apply outside the jurisdiction of Bahrain. There are no discrete provisions relating to the bribery of a foreign public official.
REGULATION OF ACTIVITIES
15. What are the main bodies responsible for investigating and combating bribery and corruption, in Bahrain?
- The Public Prosecution Office
- The National Audit Office (the NAO)
- The Anti-Corruption Directorate of the General Directorate of Anti-corruption and Economic and Electronic Security
16. What does each of these authorities investigate?
- The Public Prosecution Office prosecutes all criminal cases. The National Audit Office (the NAO) is a non-governmental organisation which independently investigates suspicious activities and reports its findings to the Public Prosecution Office for prosecution. A report is submitted annually to the King of Bahrain and the latest report was submitted on 30 December 2014. The National Audit Office is very active and investigates all ministries, government agencies and companies owned by the Bahraini Government. It prepares an annual report, which is presented to the King of Bahrain. The last report was submitted on 3 December 2017 for the year 2016-17.
- The Anti-Corruption Directorate of the General Directorate of Anti-corruption and Economic and Electronic Security (“Anti-Corruption Directorate”) is responsible for investigation and prosecution of offences related to corruption.
17. Do the authorities described above have the same powers of investigation?
- No. Refer to our response to question 16.
18. What actions may these bodies take in exercising their functions?
- Criminal Investigations and the Anti-Corruption Directorate will mainly be done through the Public Prosecution Office, which has the power to prosecute, investigate and collect and confiscate relevant evidence in crimes which have been detected, as well as question relevant individuals (suspects, witnesses, etc), request experts to report on certain issues, and detain suspects.
- The NAO has authority over all ministries and governmental authorities and organisations as well as the Cabinet and Parliament and Bahraini companies (among others), and it has authority under Decree Law No.16/2002 to audit, investigate, inspect and review any suspicious activities in this respect, and report the same to the Public Prosecution Office. The NAO has the authority to oblige the relevant authorities/companies to cooperate.
- In addition to this, please see our response to question 16.
19. What are the powers of arrest and detention of the relevant authorities?
- Powers of arrest and detention are exercised through the Public
20. What is the jurisdictional reach of these powers?
- Jurisdiction is limited to the Kingdom of Bahrain.
- If, however, a Bahraini citizen commits an offence under the Penal Code whilst abroad, he/she may be prosecuted on return to Bahrain even if he/she is punishable under the law of the country in which they have committed the offence and even if he/she lost or acquired Bahraini nationality after committing the offence.
21. Do the police and other local authorities assist the relevant regulatory authorities in their investigations?
- Yes. The general legal principle is that the Executive Authority shall obey the Judiciary, and as the Public Prosecution Office is a part of the Judiciary, the Executive’s cooperation shall be
extended to it. Further, it is usual that governmental authorities are extended a certain degree of cooperation.
22. How do the relevant regulatory authorities interact with overseas regulators?
- Bahrain is strict in applying ABC laws and is cooperative with overseas regulators.
23. Are there any provisions requiring investigations or information disclosed during the course of investigations to be kept confidential?
- The Penal Code requires confidentiality of investigations, especially in the context of not obstructing the course of justice; however, making the subject of a complaint or case public will not suffice to trigger confidentiality implications. Furthermore, the Bahrain courts are open to the public and as such any individual may attend any court hearing and thus be privy to such information if so presented in the court.
24. Can information obtained by these regulatory bodies in the course of their investigations be used for any other purpose, for example in proceedings in a court of law?
- Yes. Information discovered in a criminal investigation may be used in a court of law to prosecute the offender, and may also be used in related civil proceedings (excluding negligence).
25. Are there protections available when responding to investigations by the relevant authorities, such as the right to legal representation at interviews, privilege against self-incrimination and legal professional privilege?
- Yes. Under Article 20 of the Constitution of the Kingdom of Bahrain, an accused person is innocent until proven guilty in a legal trial and has the right to defence at all stages of the investigation and trial. This includes, amongst other things, the accused’s right to a lawyer to defend him with his consent and his right against self-incrimination. Article 29 of the Legal Practice Act covers legal professional privilege and prohibits a lawyer, who acquires in the course of his practice, knowledge of any incident or information, from disclosing it even after the expiry of his appointment as attorney, unless divulging such information is intended to prevent a crime or misdemeanour or report the occurrence thereof. Article 29 further stipulates that a lawyer may not be asked to testify in respect of any dispute for which he has been appointed as attorney or asked to give advice with regard thereto without the client’s prior written consent.
SANCTIONS FOR WRONGDOING
26. What disciplinary sanctions/sentences may these authorities impose?
- A civil servant, employee, board member or corporate trustee who asks for or accepts for himself or others a bribe for acting or omitting to act in relation to his duties shall be liable for a term of imprisonment not exceeding 10 years. In respect of civil servants, this is reduced to a maximum of five years’ imprisonment in the event the civil servant demanding or accepting the bribe has promised to do an act, or omit to do an act, not constituting part of his duties, but had wrongly alleged or believed it to be so. Moreover, offering a bribe to an employee, board member or corporate trustee is also punishable by imprisonment not exceeding a term of 10 years. However, offering the same to an official in the public sector is punishable by imprisonment limited to a maximum term of three years.
- Further, apart from confiscation of the bribe, fines shall also apply to offenders, equivalent to the amount of the bribe requested, accepted, promised or offered, subject to a minimum fine of BD 100 in the public sector and a minimum of BD500 capped at BD10,000 in the private sector.
27. Do the relevant authorities have powers to freeze properties which may be proceeds of an ABC offence pending conclusion of their investigation?
- Yes, apart from the penalties described in question 26 above, the Penal Code provides for the confiscation of assets obtained by bribery.
28. Is it possible to enter into a settlement to resolve any enforcement action/prosecution by the relevant authorities?
- No, this is very unlikely, as Bahrain strictly applies ABC laws.
29. Where proper disclosure is made to the employer/public body concerning the details of the gift or event being offered, would that be sufficient to avoid any potential liability under the relevant legislation?
- The law does not provide guidance in this respect; however, any gift or privilege offered or accepted in exchange for a favour, regardless of it being reported to the supervisor or not, may trigger the provisions of the Penal Code in respect of bribes.
30. In practice, is it possible to obtain written/ signed acknowledgement from the relevant supervisory level of the public body/state, which shows that the supervisor is aware of the advantage offered to an employee? Is there an official approval process available or channel to go through?
- The law does not provide guidance in this respect. Please refer to our response to question 29.
31. Are there provisions for defendants to appeal against any enforcement action/prosecution taken against them?
- Appeals in this regard may be done through the ordinary course of the criminal courts, ie by making applications to the Public Prosecution Office or Court requesting release for bail or appealing decisions rendered by the Court. Please refer to our response to question 3.
32. Are there likely to be any significant reforms in Bahrain in the near future?
- We are unaware of any reforms underway in respect of ABC laws.
Noor Al Taraif, Associate
Zu’bi & Partners Attorneys & Legal Consultants