SECTION 9 OF THE PREVENTION OF BRIBERY ORDINANCE
Understanding and responding to private-sector bribery allegations
Section 9 of the Prevention of Bribery Ordinance (Cap. 201) is the principal statutory provision governing bribery and corruption in the private sector. Unlike the public-sector offences, section 9 focuses on the relationship between an agent and a principal and protects the principal's affairs or business from undisclosed conflicts, secret commissions and corrupt interference.
The provision ensures that agents and employees remain loyal to their principals and do not solicit or accept unauthorised side payments, commissions or kickbacks in connection with the work they perform. It also criminalises the conduct of the person who offers the corrupt advantage.
THE TWO SIDES OF A PRIVATE-SECTOR BRIBERY ALLEGATION
Section 9 addresses both the recipient and the provider.
An agent soliciting or accepting an advantage
Under section 9(1), an agent commits an offence where, without lawful authority or reasonable excuse, the agent solicits or accepts an advantage as an inducement or reward for, or otherwise on account of, doing or forbearing to do an act in relation to the principal's affairs or business, or showing or forbearing to show favour or disfavour in relation to those affairs or business.
“Agent” is broadly defined and includes any person employed by or acting for another. Depending on the legal relationship and functions actually undertaken, it may include an employee, director, trustee or representative. The status must be proved on the facts rather than assumed from a job title alone.
A person offering an advantage to an agent
Section 9(2) mirrors the receiving offence. A person commits an offence where, without lawful authority or reasonable excuse, that person offers an advantage to an agent as an inducement or reward for, or otherwise on account of, the agent acting or refraining from acting in relation to the principal's affairs or business, or showing favour or disfavour.
The offeror is exposed to the same statutory maximum penalty as the agent who solicits or accepts the advantage. The offence of offering may be complete when the corrupt offer is made: the agent's refusal does not necessarily prevent liability under section 9(2).
THE NEXUS WITH THE PRINCIPAL'S BUSINESS
The alleged advantage must be connected with the agent's conduct.
The prosecution must prove the required relationship between the advantage and an act, omission, favour or disfavour concerning the principal's affairs or business. The following are practical illustrations; whether an offence is established depends on all the evidence.
Supplier commissions
A purchasing manager accepts a secret cash commission from a vendor as an inducement or reward for awarding, renewing or favouring that vendor's supply contract.
Banking and financial services
A bank employee is offered an expensive watch, cash payment or other advantage for accelerating, favouring or improperly influencing a corporate account or loan application.
Referral fees, rebates and gifts
Third-party referral fees, rebates or corporate gifts may be legitimate where properly authorised and disclosed. When concealed from the principal and connected with the agent's conduct of the principal's affairs, they may instead support an allegation under section 9.
THE PRINCIPAL'S CONSENT
Permission depends upon transparency and full disclosure.
Section 9(4) addresses the effect of a principal's permission. Where permission is given before the advantage is offered, solicited or accepted, it may constitute lawful authority for the purposes of section 9. This recognises that referral fees, rebates, commissions and corporate gifts may be legitimate where the principal knowingly authorises them.
Permission is not established merely by showing that a payment was commercially common or that the principal later became aware of it. Where permission is relied upon after the event, the statutory requirements must be satisfied, including obtaining permission within a reasonable time and making full disclosure of the material circumstances. The timing, identity and authority of the person giving permission, the information disclosed and the terms of the permission are therefore critical.
The practical legal defence is that the agent acted with the principal's valid permission rather than secretly and contrary to the principal's interests. Whether permission existed requires examination of policies, declarations, board approvals, correspondence and the transaction.
CRIMINAL PENALTIES
The maximum sentence depends on the venue of trial.
Conviction upon indictment
Private-sector corruption is investigated by the ICAC. Under section 12(1)(a)(ii), a person convicted on indictment of a section 9 offence faces a maximum penalty of seven years' imprisonment and a fine of HK$500,000.
Under section 12(3), the court may additionally order payment to an aggrieved person or public body of a sum not exceeding the amount or value of the advantage received. Depending on the case, that may require the corrupt agent to repay the value of the advantage to the employer or other principal.
Summary trial in the Magistrates' Courts
Under section 12(1)(b)(ii), the maximum penalty where a section 9 offence is tried summarily is three years' imprisonment and a fine of HK$100,000.
For comparison, conviction upon indictment in the District Court carries a maximum of seven years' imprisonment and a fine of HK$500,000 under section 12(1)(a)(ii).