New Zealand law criminalises a wide range of bribery and corruption offences in both the public and private sphere (whether such acts occur in New Zealand or overseas). This includes foreign bribery, which is where an individual or company from New Zealand bribes a foreign public official in the course of an international business transaction.
This includes bribes made through intermediaries. Therefore, businesses cannot avoid liability by making bribes through third parties such as foreign agents and related legal persons.
The following is a list of relevant legislation in New Zealand regarding bribery:
Crimes Act 1961
1. The legislative provisions relating to bribery are found in the Crimes Act 1961 ("the Act"). A bribe, in the context of the Act, means "any money, valuable consideration, office, employment, or any other benefit, whether direct or indirect".
2. Sections 100 – 105 of the Act criminalise bribery and corruption of domestic public officials, with penalties ranging from a maximum of seven to fourteen years’ imprisonment or an unlimited fine for individuals and corporations.
3. Sections 105C –105F of the Act criminalise bribery of foreign public officials in the course of an international business transaction (which includes the provision of international aid). The offence occurs where any person corruptly gives, offers, or agrees to give a bribe to a person with intent to influence an act or omission by the official (whether or not within the scope of the official’s authority). This offence carries a maximum penalty of seven years imprisonment and/or a fine.
Businesses must be wary that this offence captures bribes paid by New Zealand persons operating anywhere in the world, including the actions of intermediaries acting on behalf of a New Zealand business
4. The following provisions are relevant in regard to bribery of foreign officials:
a. Section 105C: It is an offence to bribe a person with intent to influence a foreign public official in order to obtain or retain business or to gain an improper advantage. The maximum penalty is 7 years imprisonment and/or a fine not exceeding the greater of $5 million, or 3 times the value of commercial gain.
Corporations can be criminally liable under section 105C. The section expressly makes a corporate entity liable for the acts of any employee, agent, director or officer acting within the scope of their authority. There will be no offence for a corporate entity where all reasonable steps have been taken to prevent the commission of the offence.
b. Section 105D: This section provides that it is an offence for a New Zealand citizen or company to do any act overseas that would, if done in New Zealand, constitute an offence under section 105C.
c. Section 105E: This section makes it an offence for people to arrange or facilitate the bribery of foreign public officials and also extends to the person actually accepting the bribe. A foreign public official will only be liable under section 105E when the offence is committed in NZ. A NZ citizen, resident or a corporation incorporated in NZ will be liable for offences committed outside NZ.
d. Section 105F: This section makes it an offence to "trade in influence". It is an offence to give, receive or offer bribes with intent to influence the way an official performs, or omits to perform, an act. The offence includes attempts to influence where the official is not in fact influenced. It is immaterial whether the act or omission is actually within the scope of the official’s authority.
5. Facilitation Payments: New Zealand’s foreign bribery offence contains a narrow exception for payments made to a foreign public official for the sole or primary purpose of ensuring or expediting the performance of a “routine government action”. These are commonly known as facilitation payments. To be legal, the value of the benefit must be small and must be within the scope of the official’s ordinary duties. A routine government action does not include a decision about whether to award new business, to continue existing business, or the terms of the new or existing business. Nor does it include any action that provides undue material benefit to a person who makes a payment, or an undue material disadvantage to any other person.
For more information about what facilitation payments are, the risks associated with making them, and practical advice on how to effectively eliminate their use, visit https://www.justice.govt.nz/assets/Documents/Publications/Facilitation-Payments-Guide.pdf
Secret Commissions Act 1910
The Secret Commissions Act 1910 contains bribery and corruption-style offences relevant to the private sector. The key corruption offence criminalises the bribing of an agent.
Under this Act it is an offence (in general terms) to:
a. "corruptly" give a gift to an agent (and for an agent to accept such a gift) without the consent of the principal where the gift (or other consideration) is an inducement or reward for doing or forbearing to do something in relation to the principal's affairs or business;
b. fail to disclose (as an agent) to the agent's principal a pecuniary interest in a contract;
c. give an agent a false receipt or invoice (or for an agent to deliver a receipt or invoice he or she knows is false to his or her principal); and
d. advise any person to enter into a contract with a third person and receive or agree to receive, without the person's knowledge, a gift or consideration from that third person as an inducement or reward.
International bribery and corruption legislation
In addition to New Zealand legislation, exporting businesses should familiarise themselves with the laws of the local jurisdiction(s) in which they operate, and also any applicable ‘long-arm’ laws, principally those of the United States Foreign Corrupt Practices Act 1977 (U.S FCPA) and the United Kingdom Bribery Act 2010 (U.K Bribery Act).