Anti-Bribery Clause in Agreement
This is a more technical but important distinction, and an example will illustrate the point. Agreements with third parties generally contain provisions stating that none of the third party`s owners is a representative of the government and that none of its owners will seek or accept government positions during the term of office. The first part of this sentence – that none of the owners is a government official – is a guarantee. It is a description of a state of affairs. In contrast, the second part of the sentence – that none of its owners will seek or accept government positions during the term – is a pact. It prohibits a certain type of behavior. The Foreign Bribery Practices Act of 1977, the Bribery Act of 2010 and the Criminal Code Act of 1995 have brought radical changes to the global anti-corruption scene. International organizations are particularly vulnerable to these laws and must work hard to avoid prosecution. It is advisable to set up compliance programs for companies as well as anti-corruption clauses in your contracts. The problem with such a simplified approach is that U.S. courts do not have a consistent opinion on the subject; Some judges may still want to see appropriate use of representations, agreements and guarantees in contracts.
I therefore advise clients to examine this issue with belts and shoulder straps by adding “okay” to their anti-corruption clauses. This should help cover the basics, and it has the added benefit of reducing potential confusion among those who are not steeped in traditional contract jargon. Let`s start with the representations. Representation is a contractual promise that relates to past events and circumstances and the state of affairs at the time the parties sign the contract. A representation is a form of inducement – in other words, it is a statement made by one party to convince the other party to enter into the contract. So, if my client had accepted the consultant`s amendments and left only the word “represent”, the anti-corruption clause would simply be a statement that: (i) the consultant has not bribed government officials in the past; and (ii) it is not currently involved in such activities at the time the parties signed the Agreement. As the clause is worded, the clause required the consultant to “declare, compel and guarantee” that he or she has not bribed government officials and that he or she would refrain from bribing government officials. The consultant wanted to delete the words “pact” and “arrest warrant”. Although this is an apparently benign request, I advised them that the “pact” should be upheld, while acknowledging that a reasonable argument could be made that the “arrest warrant” has no place in the clause. To understand my advice, we need to go back to the basics of contract law. One of my clients recently asked me for advice on these issues. They negotiated an agreement with a new external consultant, and during the back and forth, the consultant requested seemingly slight changes to my client`s standard clause.
To combat this vulnerability, the International Chamber of Commerce (ICC) has created an anti-corruption clause that must be included in contracts in which third parties commit to comply with ICC anti-corruption rules. Such a requirement will help maintain trust between the two parties and prevent corruption in the negotiation and execution of contracts. It is important to note that there are many exceptions or limitations to the concepts described above. Nevertheless, a basic understanding of insurances, commitments, and warranties can help prevent unintentional errors that could limit the effectiveness of compliance clauses. In addition, readers should be aware that these terms are falling out of favor in some legal circles, with some arguing that the best approach is to replace them with simplified, everyday terms such as “accept” or “promise.” An employment contract with an anti-corruption clause is the result of a tougher stance by governments against bribery and corruption. Anti-corruption laws are continually being passed and prosecutions of companies and individuals who violate these laws continue. Now let`s move on to alliances. An agreement is simply a contractual promise to participate or refrain from certain actions during the agreement.
For this reason, I told my client that, from a technical point of view, the term “arrest warrant” could emerge from this particular anti-corruption clause without diminishing its effect. The prospective purpose of the clause was to prohibit certain behaviors of the consultant – not to bribe government officials. There is no justification for future behavior – a promise about future behavior is the purpose of an alliance. However, separate anti-corruption guarantees are important elements of a contract with a third party, e.B. Warranties that none of the third party`s owners or key persons are or will be a representative of the government (as mentioned above) and that the third party maintains (has and will have) the necessary licenses and permits to provide the services in question. For the sake of completeness, if one party violates its warranty, the other party usually has the right to declare in breach of contract and claim damages instead of withdrawing. An anti-corruption clause allows all parties to claim that they have not given or received bribes and that they will not receive or engage in other corrupt practices. If a party violates the clause, suspension or termination of the contract is possible. Damages can even be claimed. An anti-corruption clause states that unethical practices will not be tolerated. Including such a clause in your contracts is an important first step that will allow your company to reflect a strong internal culture for each party it works with. .