30 Nov 2014

Hadef in the Courts: BRIBERY ISSUES UNDER UAE LAW

Authored by: Walid Azzam and Karim Mahmoud

Hadef in the UAE Courts

Partner Walid Azzam and Associate, Karim Mahmoud in our Dispute Resolution team discuss the legislation and position of bribery in the UAE and the UAE’s efforts to reduce corruption.
 
Many jurisdictions experiencing quick growth have suffered an increase in corruption incidents in recent years and the UAE is not an exception. There has however been a sustained and concerted effort by the UAE authorities to focus on eliminating corruption at all levels.
 
Bribery in the UAE is primarily governed by UAE Federal Law no. 3 of 1987, as amended (the “Criminal Code”).
 
Public officials
 
From a criminal perspective, offences primarily addressed by public officials are in Articles 234 et seq. of the UAE Criminal Code. Under these provisions it is an offence for a public official to accept or solicit for himself (or another person) any kind of gift or advantage, or the promise of such gift or advantage, in return for his agreement to act (or refrain from acting) in accordance with his duty. Correspondingly, it is an offence for any person to offer a gift or advantage to any public official for the purposes of persuading him to act (or refrain from acting) in according with his duty.
 
Heavy prison sentences are prescribed for these offences and in all cases the public official is also liable to a fine corresponding to the value of the “bribe”. The minimum fine is AED 1,000.
 
It may be noted that there is no lower value limit with respect to the value of the “bribe”.
 
Additional laws and regulations are also relevant, for example:

  • Federal Laws No. 6 and No. 7 of 2004 (concerning Service in the Armed Forces): these laws specifically prohibit the acceptance by military personnel of gifts or benefits of whatever kind.
  • Order No. 12 of 1986 (Military Tenders & Contracts Regulations):  Article 83 et seq. confer on the departmental officials concerned the power to terminate any contract for procurement of equipment, supplies etc (and to take all usual termination action, including the liquidation of performance guarantees) in the event that the contractor or supplier “bribes or attempts to bribe” any public official in connection with the contract.
  • Dubai Law No. 6 of 1997 (concerning Contracts with Government Departments): this law contains provisions similar to those in the Military Tender & Contracts Regulations, as mentioned above.
  • Abu Dhabi Law No. 1 of 1974: Heads of Department within the Abu Dhabi government are expressly prohibited from “exploiting their appointment for their own benefit” (Article 10).
  • Article 236 of the Criminal Code has been amended to widen the scope of offenders to include board members, managers or employees of a company or private institute who request or accept (for themselves or on behalf of another person) a gift or a promise of any such thing to perform a task or refrain from performing a task related to their work or in breach of their duty. Such private sector offenders’ face up to five years in prison.

A key aspect of Article 236 is intent. A person who does not “agree” to commit an act of bribery, but nonetheless breaches a duty with the goal of being rewarded, still faces criminal liability. Article 236 states that an “offender shall be punished by the same penalties if such request, acceptance or receipt occurs upon doing or omitting to do such act or the breach of the duties of his job and his intention is to be rewarded for this without prior agreement.”
 
It is worth noting however that unlike the case of a public official, there is no clear text criminalizing the act of the person offering the bribe to a private individual / employee. However, this is traditionally included by charging the person offering the bribe with inducement on of being an accessory to the crime.
 
Mitigation to a bribery offence
 
Under Article 239 of the Criminal Code a briber or a middle man shall be pardoned of the crime if he takes the initiative to inform the judicial or administrative authorities about the crime before it is discovered.
 
This Article is aimed at providing individuals with the incentive and opportunity to report the crime prior to its being discovered in exchange of getting immunity.
 
Dubai Decree no. 37 of 2009 relating to recovery of public money and illegally obtained money.
 
Dubai Decree no. 37 was issued to provide additional punishment for cases which also includes bribery for any one who is proved to have been convicted of a final judgment of obtaining “Illegal Money” or “Public Money” and fails to pay it back.
 
Illegal Money means money obtained directly or indirectly as a result of an action that constitutes a crime punishable by law.
 
Public Money means money owned by the government, government bodies, government affiliated institutions and companies or parties to which government bodies contribute, as well as money payable to any of these.
 
Punishment has been extended to up to 20 years if the person refuses to return the funds taken.
 
In the end, in view of the possible implications of not clearly understanding the concept of a sanctioned gift or commission, it is always prudent to hold regular sessions with employees to outline the issue of bribery under UAE law.

 

This article, including any advice, commentary or recommendation herein, is provided on a complimentary basis without consideration of any specific objectives, circumstances or facts. It reflects the views of the writer which may, in some cases, differ from those of the firm, especially in the develop jurisdiction of the UAE