Introduction

At present, the United Arab Emirates (hereinafter “UAE”) does not have a comprehensive legislation directed towards curbing corruption and bribery in the country. However, the Federal Law no. 3 of 1987, which is the Federal Penal Code of UAE, provides the requisite laws to govern bribery and corruption in the country. The Code applies to all the seven Emirates and also to the economic free zones, which though empowered to enact their own civil and commercial laws fall under the purview of the Penal Code of UAE.

Overview of the Anti- corruption and Bribery legislation

Article 234 to Article 239 provide for rules prohibiting bribery in the country. Although the Federal Code does not expressly define the term “bribe”, from the Articles dealing with the offences of bribery, a logical deduction would imply that a bribe is a gift, financial or other advantage offered or received, directly or indirectly, to induce or reward the improper performance of a relevant function or activity.

However, in light of the growing stagnancy in the bribery laws in UAE the President His Highness Shaikh Khalifa Bin Zayed Al Nahyan decreed various amendments to the existing Code in order to boost the country’s anti-corruption legislation. The Federal Code now has a wider scope of application bringing within its purview both domestic and foreign acts of bribery, both public as well as private and further even extends its application outside UAE’s territory.

Wider ambit and application

The new amendments criminalize the act of bribery of both public and private sector employees, whilst the older law was limited in its application to bribery in the public sector. Further, the revised law also expands the definition of “public officials” to not only include those in UAE but also extends to regulate the conduct of foreign public officials and employees of  international non-governmental organizations. As above-mentioned the law can be applied outside UAE’s territory if the criminal or victim is a UAE citizen or if the crime is committed by an employee of the public or private sector of the UAE, or if it involves public property.

Increased sanctions

In order to increase the deterrent effect of the law and ensure its effective implementation, the revised law increases the sanctions on an individual who indulges in the act of bribery. The amendment has raised the minimum fine from AED 1,000 to AED 5,000. There has also been a parallel increase in the sanctions for corporate entities . The fine has been raised from AED 50,000 to AED 500,000 in the event that a company is convicted for offenses committed by its representatives, management, or agents, on the company’s behalf or for its benefit. This was done with the intention to increase the accountability of the company towards its employees and placing rigorous rules within the company to prevent its employees from committing these crimes.

 It is of pertinent consideration to note that the legislator has also removed the limitation period on both criminal and civil cases involving bribery.

Additional Considerations

In order to increase the efficiency and the strength of the system other additional legislations were made. At present, the court may confiscate the money or other “things” of value used or intended to be used in the crime, without prejudice to the rights of bona fide third parties. However, if the things or funds cannot be seized, or cannot be ruled out for attachment due third party rights, the court has the discretion to issue a ruling to a fine equivalent to its value at the time of the crime.

Further, intermediaries and accessories to the crime may also be held liable under the Code. Also, if companies are subject to a regulatory investigation they are in all likelihood to face business disruption and licensing risks. Additional legal consequences may also be applicable if the act of bribery also constitutes crimes under other laws such as competition or tender laws.

An important legislation under the UAE Federal Code is that of self-reporting bribery. Self-reporting bribery continues to be a defence to the act of bribery. The UAE Criminal Code expressly states that a briber or intermediary, who “self-reports” a bribery offence before it is discovered, they shall be exempted from the penalty. Even if the offenders inform the authorities post the crime being detected, they still can be exempted from the penalties if the reporting leads to the arrest of the others involved in the crime.

Conclusion

It is an undeniable fact that the amendment to the law is bound to boost the anti-corruption and bribery legislation in UAE and bring it at par with the prevailing international standards. Such proactive steps on part of the government are essential in ensuring and protecting the best interests of the economy and allowing its smooth functioning. The path paved by the government certainly appears to be promising and only time will tell the way forward for UAE.