Businessman charged with bribery of Bahraini officials following SFO investigation

Victor Dahdaleh allegedly bribed officials at Aluminium Bahrain, a smelting company owned mainly by the Bahraini state "in connection with contracts with a US company, Alcoa Inc, for supplies of alumina shipped to Bahrain from Australia," the SFO said. Dahdaleh also allegedly made "further payments ... in connection with contracts to supply goods and services" to Aluminium Bahrain between 2001 and 2005, it said.

Dahdaleh, who is a citizen of the UK and Canada and resides in London, has been charged with offences under the Prevention of Corruption Act, Criminal Law Act and Proceeds of Crime Act, according to the SFO.

Under the Prevention of Corruption Act a person can be jailed for offering "any gift or consideration" to employees of foreign companies "as an inducement or reward for doing or forbearing to do ... any act in relation to his [employer's] affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his [employer's] affairs or business".

The Criminal Law Act states that individuals are guilty of conspiring to commit an offence if they carry out actions "in accordance with their intentions" that they had agreed with others that "will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement, or would do so but for the existence of facts which render the commission of the offence or any of the offences impossible".

Dahdaleh is also charged with "acquiring and transferring criminal property", the SFO said. Under the Proceeds of Crime Act a person generally commits an offence if they conceal, disguise, convert or transfer criminal property or "removes" the criminal property from England, Wales, Scotland or Northern Ireland. The Act also generally prohibits a person from acquiring, using or possession criminal property.

The SFO said the charges were brought following a 27 month investigation. The SFO investigates and prosecutes serious or complex fraud and corruption. It has the power to investigate and prosecute individuals for corrupt or fraudulent activity in England, Wales and Northern Ireland. 

"The investigation by the Serious Fraud Office opened in July 2009 with assistance from the City of London Police Overseas Anti-Corruption Unit," the SFO said in a statement. "Additionally the SFO has been in liaison with the US Department of Justice and with the Swiss authorities."

Under the Foreign Corrupt Practices Act US-listed companies can be fined for illegal corrupt practices it is involved in abroad.

In a statement posted on his website Dahdaleh's lawyers said he believes the SFO's investigation was "flawed" and that he has done "absolutely nothing wrong". He will be "vigorously contesting these charges at every stage, confident in clearing his good name," the statement said.

Dahdaleh, who has been released on conditional police bail, is due to appear at the City of Westminster Magistrates' Court on 31 October, the SFO said.

New UK bribery laws came into force in July. Under the Bribery Act companies can be found responsible for bribery carried out by its employees without its knowledge or consent. UK companies and partnerships can be found to be breaking the law no matter where alleged acts of bribery take place. Foreign companies which operate in the UK could also face prosecution regardless of where the alleged bribery has taken place, unless the suspect activities are permitted locally. 

The Act also makes it an offence for businesses to fail to prevent bribery by people working for or on behalf of a business. Companies can escape liability if they show that they have 'adequate procedures' designed to prevent bribery in place. 

Under section two of the Act it is an offence if a person requests, agrees to receive, or accepts an advantage, financial or otherwise, with the intention that they or someone else perform a "relevant function or activity" improperly. Under the Act, the maximum penalty for individuals found guilty of bribery is 10 years' imprisonment and an unlimited fine. 

"The mixing of traditional corruption offences (under pre Bribery Act laws) and the Proceeds of Crime Act (POCA) in this prosecution underscores that POCA will increasingly be used as a weapon by the SFO in combating bribery," Barry Vitou, anti-corruption law expert at Pinsent Masons, the law firm behind Out-Law.com said.