Corruption through gifts - a Swedish experience

T he basic provisions on corruption in Sweden are found in the Penal Code.

The Penal Code makes clear distinction between bribery (active side) and bribe-taking (passive side). The provisions on bribery and bribe-taking are applied independently as two separate criminal offences as follows.

Chapter 17, section 7

A person who gives promises or offers a bribe or other improper reward to an employee or other person defined in Chapter 20, Section 2, whether for himself or any other person, for the exercise of official duties, shall be sentenced for bribery to a fine or imprisonment for at most two years.

If the crime is gross, imprisonment for at least six months and at most six years shall be imposed.

Chapter 20, section 2

An employee who, whether for himself or any other person, receives, accepts a promise of or demands a bribe or other improper reward for the performance of his duties, shall be sentenced for taking a bribe to a fine or imprisonment for at most two years. The same shall apply if the employee committed the act before obtaining the post or after leaving it. If the crime is gross, imprisonment for at least six months and at most six years shall be imposed.

The provisions of the first paragraph in respect of an employee shall also apply to:

• 1)    a member of a directorate, administration, board, committee or other such agency belonging to the State, a municipality, county council or association of local authorities;

• 2)    a person who exercises an assignment regulated by statute;

• 3)    a person falling under the Law on Disciplinary Offences by Members of the Armed Forces, etc. (1994:1811), or other person performing an official duty prescribed by Law;

• 4)    a person who, without holding an appointment or assignment as aforesaid, exercises public authority;

• 5)    a person who, in a case other than stated in points 1–4, by reason of a position of trust has been given the task on another person’s behalf of

• a)    managing a legal or financial matter,

• b)    carrying out a scientific or similar investigation,

• c)    independently handling an assignment requiring qualified technical knowledge,

• d)    exercising supervision over the management of the tasks designed in (a), (b) or (c);

• 6)    a foreign country’s Prime Minister, member of Parliament or member of foreign country’s authority corresponding to those mentioned in point 1;

• 7)    a person who, without holding an appointment or assignment as aforesaid, exercises foreign country’s public authority or assignment as foreign arbitrator;

• 8)    a member of a controlling authority, a decision making authority or a Parliament in an international or a supranational organization where Sweden is a member, and

• 9)    a judge or another functionary in international courts whose jurisdiction is accepted by Sweden.

Scope and purpose of the provisions

The scope of the provisions on bribery and bribe-taking in the Penal Code is very wide in international comparison. The provisions cover any corruptive activity in the private sector as well as in the public sector.

The primary purpose of the provisions of the Penal Code, as far as the public sector is concerned, is to protect public authority against irrelevant and undue influence, and hence to safeguard honesty in society and administrative efficiency. Similar considerations are held to be valid also for important functions within the private sector.

A more general purpose of the penal provisions is to encourage healthy methods of exerting influence in society general and to promote open and fair competition in business life. Corruption in economic life is contrary to the general interest of the consumer to the extent that it leads to unfair competition and to more expensive or inferior goods or services or to goods or services being marketed without correct information.

Bribe and Improper reward

The provisions of the Penal Code define illicit payments as «a bribe or other improper reward». These words should be interpreted in their widest sense. Any benefits, including those of an immaterial nature can constitute a bribe or an improper reward. The key word is «improper», the interpretation of which will depend on custom and public opinion at a given time. In practice the final test of impropriety will be if the illicit payment in casu is likely to attract and to influence a person placed in the same position as the recipient, to make him feel to be under an obligation to the briber.

Both a reward or payment given in advance and one given afterwards may be punishable as a bribe. Also improper payment to a third party with a view to influencing the holder of a position, e.g. a gift to spouse or children or to an association in which he has a direct interest, may be considered as bribes. The recipient himself, or if a legal person its representatives, may in such case be punished for complicity bribe-taking.

The word «bribe» refers to illicit payments given in advance. «Improper reward» refers to subsequent rewards.

Who can be bribed?

Under the provisions of the Penal Code, recipients are defined as «an employee» in public or private service. The word «employee» includes employees at all levels, from the top to the lowest position, full time or part-time.

Moreover, politicians performing public functions and services within Swedish central or local governments, also members of political assemblies as the Parliament, but legally not classified as employed under the Labor Law, are also considered as recipients.

In the private sector recipients include any person acting as fiduciary in legal, economic, scientific or technical matters, including directors of companies, associations and foundations, brokers, commercial agents, commission agents, auditors, real-estate agents, government appointed estate administrators or conciliators and advocates and other legal consultants.

Who can bribe?

The Penal Code defines the briber as «a person», which is to be understood as any physical person. Only physical persons can be held criminally responsible. Hence, if illicit payments are made by a company or any other legal person, the director or employee who has taken part in the activity will be held responsible.

If the illicit payments are made by an independent agent on behalf of the legal person, the agent will be punished for complicity. Are the illicit payments made by order of the legal person or with its knowledge the responsible representative of the legal person will be punished as the perpetrator.

The action

The provisions of the Penal Code apply to the action per se. Bribery is described as «a person who gives, promises or offers a bribe or other improper reward». Bribetaking is defined as «an employee who receives, accepts a promise of, or demands a bribe or other improper reward». The result of the action is immaterial; even if the recipient can prove that he has not been in any way influenced by the action, he will be held responsible.

A gift to an employee, of whose decision or service the giver is dependant in any way, implies a risk of irregular influence upon the employee, with the consequence that he acts to the detriment of his employer. Thus the law only requires that a gift has been given or offered to an employee «for the performance of his duties». This means that the prosecutor has to prove a professional or business relation between the giver and the recipient, for instance that the latter handles or can influence decisions concerning the giver’s matter. If both the gift or offer and such a relation have been proved the law presumes that the recipient, and the performance of his service, have been unduly influenced by the gift or the offer, which of course may have been to the detriment of the receiver’s employer. If this is the case it may affect the culpability of the action and justify a more severe punishment.

Complicity, conspiracy, aiding and abetting, and attempt to bribery, and to bribetaking where applicable, are regarded as crimes under the general principles of criminal responsibility set out in the Penal Code. Due to the very wide definitions of bribery and bribe-taking, the general provision on liability to attempt will seldom be applicable in practice. Complicity is seen as action per se, i.e. a person can be held guilty of complicity of bribery or bribe-taking even if the briber or the recipient is acquitted or not even prosecuted.

Application

On the national level the provisions of the Penal Code are applied very strictly. Benefits exceeding the value equivalent of 100 Euro are normally held to be improper depending on, inter alia, whether the recipient is employed in the public or private sector. This also goes for business entertainment and gifts for Christmas and, at least for employees in the public sector, birthdays.

The Public Prosecutor has the burden of proof in criminal cases, i.e. the Prosecutor has to prove that both the objective and the subjective criteria of the relevant provisions are fulfilled in the particular case.

Under the Penal Code the Public Prosecutor may always initiate legal proceedings in cases of alleged bribery or bribe-taking within the public sector. In cases of corruption within the private sector or the public sector of a foreign country, the Public Prosecutor may initiate legal proceedings only on notice of the employer or principal of the employee or agent to whom the bribe or improper remuneration is alleged to have been given, promised or offered. However, in the public interest the

Public Prosecutor is entitled to take up ex officio also cases confined in the private sector.

The latter reason may apply when the bribe is of significant value, particularly if the procedure has been systematic so there is a risk of unfair competition in a sector of industry to the disadvantage of the briber’s competitors and ultimately of the consumers.

International

There are no specific laws aimed at illicit payments carried out wholly or partially abroad, or whose author or beneficiary is foreign.

There is a very general definition in the Penal Code stating that a crime shall be deemed committed where the criminal action is carried out or accomplished. A crime committed within Sweden shall be tried under Swedish Law by a Swedish Court of Law.

A crime committed outside Sweden shall be tried under Swedish Law by a Swedish Court of Law if the crime was committed by a Swedish citizen or by a person domiciled in Sweden, or by a person who has become a Swedish citizen or has taken domicile in Sweden subsequently to the crime, or by a foreigner staying in Sweden, if the crime is classified as serious, provided in all three cases that the crime is punishable under the lex loci delicti (dual criminality). Bribery and bribe-taking would be classified as serious offences.

In the case of illicit payments the Public Prosecutor will have to produce evidence that the lex loci delicti is applied with at least some efficiency in that country. However, there are no reasons for Swedish authorities to intervene against improper transactions committed abroad which are not directed against Swedish interests and which are not considered criminal in the country where they are committed.

Concerning Swedish companies’ business relations abroad it must also be taken into consideration that the view on the propriety of offering gifts in business relations varies from country to country. In application of the law one must take into consideration the practice which has developed in the foreign country. If an accused person objects that corruption is generally accepted in the foreign country where the bribery took place, it seems that in accordance with general principles of penal procedures in Sweden the proceedings should be dismissed unless the Public Prosecutor can show that it is at least probable that the law of the place of commission is applied with reasonable efficiency. No case concerning a Swedish subject charged with bribery abroad has been tried by any Swedish Court of Law.

Sanctions

The criminal sanctions of bribery and bribe-taking are fines or imprisonment for at most two years. If the crime is considered to be serious the beneficiary/recipient may be punished by imprisonment for at least six months and at most six years.

Normally, in cases of corruption the Courts of Law declare illicit payments confiscated to the State-Treasury unless it would be manifestly unreasonable to do so.

An employee who has been found guilty of bribe-taking will normally be subject to additional sanctions laid down in Labour Law, e.g. dismissal, temporary dismissal, transfer to another position or office or salary reduction. These consequences are often seen as a stiffer penalty then fines or probation sentence imposed by a Court of Law.

Swedish Law on accounting provides that any business shall be able to verify any commercial transactions. Failure to fulfill this duty correctly and truthfully is a criminal offence. The records of payments and adherent documents are open for inspections by the competent tax authorities. If they detect any illicit transactions they will refer the matter to the Public Prosecutor. In fact many of the cases of bribery on national level which have been submitted to courts have been brought into the limelight through the tax authorities.

Tax Law

Under Swedish law illicit payments are not deductible from the income of the briber, whether the bribe has been paid in Sweden or abroad.

When a bribe is to be confiscated the recipient should not also be taxed for it as this in a sense involves a double sanction. However, taxation may have a certain deterrent effect. If the recipient declares the bribe, he risks discovery of the offence and legal actions. On the other hand if he does not declare the bribe, he risks prosecution for tax fraud.

Civil Law

Illicit payments may also affect the validity of a contract at national or international level, in particular if the illicit payment is shown to have unduly influenced the bribetaker to an action in breach of trust.

Under Swedish Law a contract tainted with corruption can be enforced, if no objection is raised in court by the infringed party. An agreement, however, between the briber and the recipient to pay a bribe is in Swedish Law considered null and void as being contrary to public morality and public order. Otherwise it might be possible to accuse the Court of direct complicity in the commission of the offence.

Case Law

Two recent cases on corruption from the Supreme Court are described briefly below.

• A)    A director in a private company in forest productions invited the County Governor, who was also at the same time the Governments special investigator to assess the Swedish forest policy, to elk-hunting together with other guests. The County Governor accepted the invitation and participated in the hunting for one and a half day. The company paid for the hunting and two dinners, two breakfasts and one lunch.

The Supreme Court stated that bribe is normally an economic advantage from the briber to the recipient, with the aim to have a specific advantage. However, also transactions involving rewards which are not connected to any specific condition or any certain duty can be a bribe or bribe-taking.

It is especially important that the citizens can trust persons in the public sector who exercises assignments regulated by statute.

It is necessary that the transaction is done for the exercise of official duties. The Public Prosecutor does not have to prove that the reward have connection to a specific duty. It is enough to prove that there is a possibility that the recipient have influence over the duty. Even if there is a connection it might not be a criminal action if there is another connection between the parties, such as a long lasting friendship and the reward is based on this friendship.

The position as a County Governor is enough evidence to state that there has been a possibility to influence on the official duties. It is therefore in this case a professional relationship between the reward, elk-hunting, and the position as County Governor. Also the position as the Governments special investigator to assess the Swedish forest policy is enough evidence to state that there has been a possibility to influence on the official duties. The Public Prosecutor had, however, in this case not presented any evidence that the latter position could in any way be an advantage to the company or its director. The County Governor has therefore in this specific case received the reward in the position as County Governor.

A reward to a County Governor can be considered to be improper even if the purpose is not to influence on her official duties. For the judgment, if the purpose of the reward was to influence her official duties, the art of and the value of the reward has to be seen in relation to her position as County Governor together with other circumstances. The value of elk-hunting and the meals provided for was high enough to make it an offence to receive them.

It is a part of the role as a County Governor to meet with representatives from the private sector. Elk-hunting is also popular and important in the Swedish society. Following this, it is natural and legitimate for a County Governor to take part in elkhunting. The art of reward is therefore not as such an improper reward. Furthermore, it was for a limited time and at limited costs. The reward the County Governor received was therefore not to be seen as improper. Both the director and the County Governor were acquitted for bribe and bribetaking. (Judgment, 11 June 2008).

• B)    An employee at the State car testing authority accepted to buy alcoholic beverages to a low price offered from persons employed by car companies, who regularly tested their cars at the State car testing authority. The alcoholic beverages were also delivered to the employee’s home address. Moreover, the employee at the State car testing authority received alcoholic beverages as gifts two-three times per year and at Christmas.

The Supreme Court stated that the typical bribe is a material reward of economic value. Both the alcohol received as gifts and the alcohol bought for a low price, especially as it was delivered to the employees home, are seen as improper rewards. It is not necessary to prove that the reward actually had an effect on the recipient’s actions.

If a reward is to be seen as improper have to be judged from customs and the public opinion, based on all circumstances in the specific case. For the judgment, if the purpose of the reward was to influence his official duties, the art of and the value of the reward have to be seen in relation to the employee’s position. The special requirement on the protection of integrity for the exercise of official duties can in certain cases be seen as improper even if the purpose is not to influence on the recipient’s duties.

This case was solely based on a professional relationship between the employee at the State car testing authority and the persons at the car companies. The rewards were therefore seen as given for the exercise of the employee’s official duties. The value of the reward was considered to be low at each time of delivery, but it was made repeatedly. There were suspicions that the persons from the car companies were better treated then other customers. With regard to the protection of integrity, as required by the position at the State car testing authority, the receiving and giving of the rewards was seen as improper.

The employee at the State car testing authority was convicted for bribe-taking and the persons at the car companies were convicted of bribery. (Judgment, 10 July 2008).