Title: Bahrain’s Updated Penal Code: Cracking Down on Financial Crimes in the Private Sector
Date: October 1, 2022
Bahrain, an international business hub, has been taking crucial steps to modernize its anti-corruption controls and deter financial crimes within the private sector. In the past, the country’s legal framework offered limited protection against bribery, embezzlement, and corruption in the private sector, leading to an imbalanced business environment and a culture of canvassing and covert solicitation.
Modernising Anti-Corruption Controls
In response to this issue, Bahrain has taken significant strides to strengthen its anti-corruption measures:
- Ratified the United Nations Convention Against Corruption (UNCAC) in 2010
- Became a signatory to the International Anti-Corruption Academy (IACA) and the Arab Anti-Corruption Convention in 2016
- Enacted Law No. 1 of 2013, amending its Penal Code and adding a new chapter to address private sector bribery and corruption
This article will delve into the provisions of Bahrain’s updated Penal Code and focus on articles criminalizing bribery and embezzlement in the private sector.
Defining Private Sector Offenders
Article 417: Private sector participants subject to criminal liability for bribery offenses include board directors and trustees, as well as employees. A private entity is recognized as a group of persons or properties recognized as juristic persons by law, accompanied by natural persons employed under the management and supervision of an employer or self-employed individuals.
Bribery Crimes in the Private Sector
Article 418: Employees or directors within a private entity who solicit a bribe are liable for criminal charges. No mental requirement exists under this article, resulting in a ten-year imprisonment sentence.
Cases in point
The Bahrain Court of Cassation has adopted a zero-tolerance approach to such offences. For instance, an employee solicited a luxury pen from a company client, and although he denied accepting an unlawful bribe, the court upheld the company’s decision due to a breach of trust.
Article 419: Employees or directors are criminally liable for soliciting or receiving a bribe following the act’s execution, subjecting them to a ten-year imprisonment sentence.
Other forms of bribery
Additionally, individuals are liable for soliciting or receiving bribes to act outside their job functions or commit unauthorized acts under Article 420, with a ten-year imprisonment sentence.
Unlike the previously discussed offenses, Article 421 criminalizes acts of bribery on the part of the bribe giver, subjecting them to a three-year imprisonment sentence.
Gift versus Bribe
Bahrain’s anti-bribery legislation considers the accused’s intent, allowing for the distinction between gifts and bribes. Gifts are distinguished from bribes if there is no clear evidence that they were intended as such. Factors like the value of the gift, its timing, and the recipient’s ability to influence the giver’s position in business transactions are crucial when evaluating potential bribery charges.
Additional Penalties
Beyond imprisonment, penalties include the confiscation of the bribe from the receiver (Article 423) and a fine ranging from BHD 500 to 10,000 (Article 424).
Mitigating Circumstances
Criminal penalties can be reduced or eliminated if offenders report the crime to the judicial or administrative authorities prior to detection (Article 426).
Conclusion
Bahrain’s amended Penal Code signifies a committed effort to eradicate corruption within the private sector and distinguishes the country from its previous approach limiting bribery offenses to public officials. These legislative improvements further demonstrate Bahrain’s dedication to international best practices as evidenced through its ratification of various anti-corruption agreements.
For more information on anti-bribery measures and corruption in the region, please contact Al Tamimi & Company’s Financial Crime team at K.Hamrani@tamimi.com, I.Lassoued@tamimi.com, or S.Aldoseri@tamimi.com.