Shir specializes in regulatory enforcement and white-collar matters in Israel and abroad.
Shir specializes in regulatory enforcement and white-collar matters in Israel and abroad.
Shir represents companies and individuals in a wide range of complex criminal and administrative enforcement proceedings, from the investigative stages to hearings and trials.
Shir advises her clients on intricate legal proceedings related to money laundering, bribery, fraud, insider trading, antitrust, and securities fraud. She provides representation before Israeli governmental authorities, foreign authorities, and judicial forums in Israel and abroad.
Shir has unique experience handling internal investigations involving suspicions of corporate misconduct or fraud, compliance with regulatory requirements, and proper corporate governance rules.
Shir interned at a leading Israeli law firm.
Tel Aviv University, LL.B., 2017
Member of Israel Bar Association since 2018
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The Offense of Bribery
Enforcement authorities have attempted in recent years to increase their war on bribery and corruption. We therefore have seen a number of elected officials investigated for such offenses, viewed as some of the most serious among white-collar offenses. But what is the definition of bribery in Israeli law and what are the maximum penalties for it?
The offense of bribery, which was enacted in sections 290–291 of the Israeli Criminal Law, is committed when a public official receives something of value from another person, for which the official is expected to reciprocate in a manner that may influence his or her discretion as a public official. Such actions present a conflict of interest for the public official, inherently compromising public trust and the proper functioning of public administration.
In order to establish the elements of the offense of bribery, three factual components must be shown:
The receiver of the bribe must be a public official – The law broadly defines a public official to cover, inter alia, permanent or temporary positions, paid or voluntary, as well as anyone who is merely a candidate for a position or who has yet to take office. The legislation additionally stipulates that the definition of a public official also includes those persons who work for a corporation that provides a public service. For example, case law has held that an employee of a private security company stationed as a guard at a government building is a public official. It was similarly held that because trust funds and communal associations are corporations that provide public services for the purposes of this offense, persons who work for those types of entities are also public officials.
A benefit that could be viewed as a bribe – It must be proven that something of value was given to the public official. The thing of value may be money, the equivalent of money, a service, or another benefit, and it may be given before or after any consideration is received. In this context, it should be noted that a wide range of benefits may be considered a "bribe." For example, the prosecution’s position, as reflected in the indictment against Noni Moses in the "2000" affair, was that improving the media coverage of Israeli Prime Minister Benjamin Netanyahu with the Yedioth Ahronoth group constituted a "bribe." Whether or not this will be accepted by the courts is yet to be determined.
The taking of something of value is done in exchange for an action related to the public official's role – Here it must be shown that there must be a relationship between the thing of value that was given to the public official, and his or her role as a public official. This must be contrasted when something of value is given to a public official in his or her capacity as a private citizen alone. An issue that has come up repeatedly in the relevant case law, and most recently regarding the late politician Fu'ad Ben-Eliezer, is when something is given for mixed purposes. In this situation, it is argued that something of value was partially given for legitimate purposes and partially for illegitimate purposes. In the Ben-Eliezer case, the court examined under which circumstances transferred funds could be seen as bribery money, even if the funds were transferred between friends. The court listed several indications for the existence of an illegitimate purpose on the giver's side that were not due to his friendship with Ben-Eliezer, including the high sum of money that was transferred, its backing with a loan agreement, and the lack of repayment by Ben-Eliezer. The court ruled that in those circumstances the funds could be considered bribery.
In addition, case law emphasizes that the prohibition on bribery applies even if the bribe taker did not perform, did not intend to perform, or was not authorized to perform the act for which the bribe was given. Moreover, it is not necessary to show that the bribe taker actually gave consideration to or actually favored the bribe giver. In order to prove that a public official took a bribe for the purposes of an act connected with his or her role as a public official, it is sufficient to show a reasonable possibility that in the future the paths of the bribe giver and the bribe taker may cross in the course of his or her role as a public official. This interpretation was discussed at length in the context of donations. For example, in the Holyland Case, in considering Uri Lupolianski, who was convicted of taking a bribe when transferring funds from the bribe giver to the organization Yad Sarah, the Supreme Court held that the bribe giver does not need to be, at the time the donation was made, in need of the public official's services, rather, it is sufficient to show that the giver may need to be in need of the public official’s services in the future.
Moreover, there is no need for both the giver and the taker to be aware of the existence of bribery for the purposes of proving that bribery was committed. In other words, the offense of bribery may be complete even if the public official was not aware of the intent to bribe him or her and even if he or she provided no consideration to the bribe giver. Thus, for example, in the Holyland Case, it was held that a bribe giver may give a public official a gift, such as a wedding gift or a loan, without the public official being at all aware of the possibility that this was done "in return for an action related to the public official’s role." Under such circumstances, the answer to the question of whether a bribe was indeed given derives from the will of the giver rather than the taker. The other side of the coin is that there may be instances where the public official receives a favor or benefit as a result of the (wrongful) understanding that the giver of such gift intended to bribe the official. In such circumstances, the bribery offense has been committed by the public official, to the extent the official understands that a bribe was given for consideration related to his or her public role.
Therefore, in light of the broad interpretation given to each of the aforementioned components of what constitutes bribery, it must be noted that bribery cases are not restricted to the "classic" cases where envelopes are handed over under the table, for example. Rather, they cover a very wide range of cases and situations that may fall within the bounds of the offense, such as donations or strengthening personal reputation.
Furthermore, the offense of bribery also constitutes a "specified unlawful activity" pursuant to the Anti Money Laundering Law. Thus, prosecution for bribery may lead to prosecution for a money laundering offense as well.
In 2010, as part of an amendment to the Israeli Criminal Law, the penalty for bribe givers and takers was increased significantly, both in terms of the amount of the fine and in terms of the prison sentence to be served. Currently, the penalty for taking a bribe stands at 10 years imprisonment and for giving a bribe, 7 years.
Per the State Attorney’s guidelines regarding the sentencing policy for bribery offenses, the increased penalties reflect the seriousness of the offense, which is at the highest level of severity among corruption offenses. The substantial change in fines that may be imposed for this offense is designed to minimize the financial incentive at its base.
Correspondingly, we can infer a trend of stricter penalties from the case law as well. For instance, it was held that any person convicted of bribery ought to face imprisonment for a substantial period of time, and that the lack of a criminal record does not warrant, in and of itself, mitigation of the sentence. Similarly, as to bribe givers, the Supreme Court has held that although the sentencing bar is higher for a bribe taker than for a giver, the severity inherent in the giving of a bribe is immensely weighty. Thus, in certain circumstances, when the bribe giver is the cause of the corruption, he or she must be treated even more strictly than the taker.
Taking Testimony in Israel for Criminal Trials in the United States
Recently, United States federal courts have been more frequently approving the extra-territorial collection of testimony for use in criminal trials to be held in the United States. While the collection of such testimony for civil proceedings held in US courts is already commonplace, until now it has been a very rare occurrence in criminal proceedings.
This upswing has significance for any Israeli defendant (whether an individual or a company) being criminally prosecuted in the US who may be concerned that potential defense witnesses he may wish to bring will refuse to testify for fear of entering the US. In that case, a criminal defendant may have his attorney make a motion to collect the testimonies in depositions to be held in Israel in order to resolve this problem.
The collection of such testimony in depositions outside of the jurisdiction, is accomplished by convening in a private room, usually in a law office, where a witness called by the defense or the prosecution gives testimony in response to the questions asked by the party who has called him. The witness is then cross-examined by the opposing party. The deposition is recorded on video with a certified court reporter. The federal court adjudicating the criminal case may then be asked by the moving party to present the witness’s testimony via videotape recording to the judge or jury, without physically bringing the witness to testify in court during the trial.
This is a highly rare occurrence, as the rules of criminal procedure (in Israel and in the US) generally bar the presentation of witness testimony by any other means than "live" before the judge or jury. This stems from the clear and long-standing legal standard that nothing is better than one's own eyes and that the best way for the trier of fact to determine if someone is telling the truth, through seeing the witness directly and in person.
However, federal law recognizes there may be instances in which a certain witness is unable to appear in the courtroom, and not allowing the testimony of such witness because of absence may materially prejudice the prosecution or the defense.
One example of this has occurred as a result of the significant expansion of US jurisdiction in recent years to cover prosecution in the US of acts committed outside of it and against citizens of other nations, as well as the expansion of international enforcement of US criminal law by federal prosecutors. Because of this, an interesting situation has developed whereby prosecution or defense witnesses who are critical to one of the parties in proving its claims, may be both citizens of foreign countries and located outside the US.
This situation becomes even more complicated when the potential witness is himself a defendant in a case prosecuted by the US, but is located outside of the country and fears entering it. One interesting example where seeking to depose a witness who is outside the US for a federal criminal proceeding arises out of this exact situation.
Consider the following: A defendant wants a court or jury to consider testimony from a co-worker in the company relevant to the case at hand. However, that same potential defense witness is indicted in the US and fears entering the country. Indeed, such a witness may refuse to testify in the US even if there is no indictment against him, because, due to his involvement in the case, he is concerned he will be charged and criminally prosecuted if he enters the US. A witness like this would likely refuse to testify on behalf of the defendant. The greater the potential witness’s involvement in the case is, and the more extensive his knowledge of the details is, the more a refusal to testify would irreparably harm the defense.
In light of these circumstances and others, Rule 15 of the Federal Rules of Criminal Procedure was enacted. The US legislature recognized that in situations in which a foreign person is being prosecuted and most of the defense witnesses are located outside of the US, the defendant will not have a fair opportunity to present testimony in its defense, unless the legislature itself offered a solution for those circumstances in which a witness refuses to enter the US.
Moreover, the need to collect testimony under Rule 15 is heightened by the US prosecution’s power to file a sealed indictment. In other words, a witness may enter the US without even knowing there is an indictment against him, because the indictment is sealed, and will only discover this when arrested upon entry. The concern in such a scenario is that it may prompt many critical defense witnesses to refuse to physically enter the US to testify. The defense would obviously be greatly harmed as a result.
In fact, the witness himself may also have a significant reason to testify. First, he may wish to protect the defendant, who was presumably caught by US authorities as his partner. If the defendant is found to be not guilty, it will bolster the witness's ability to defend himself or fight a potential extradition proceeding should the US decide to indict the witness and request his extradition. On the other hand, the witness may have grave concerns that US authorities will use his testimony against him should he face prosecution there. Further, and perhaps even more so, he may be afraid Israeli authorities will also decide to investigate the same case that took place in part on Israeli soil. (As recently happened in the recent Teva case; following a plea agreement with US authorities, Israel launched a criminal investigation and a prosecution into the same matter based upon the same set of factual events.)
In such circumstances, the witness requires complex legal support from an attorney well versed in the rules of both US and Israeli criminal procedure in order to protect him from all the exposures he faces and find creative solutions to the concerns raised above.
The General Rules for Being Granted a Motion to Collect Testimony outside the US for a Criminal Proceeding
A motion to take witness testimony outside the US will only be granted by a US court “in exceptional circumstances and in the interest of justice.” Such a motion will be granted only upon a showing of the significance of the testimony, and if the unavailability of the witness whose testimony is sought is demonstrated.
A defendant must file such a motion through defense counsel and detail in it the reasons why a witness critical for his defense refuses to enter the US. The defendant must also define the level of the testimony's importance for the purposes of clarifying the facts so that his defense is not prejudiced.
Important Matters to Consider before Taking a Deposition under Rule 15 of the Federal Rules of Criminal Procedure
In complex cases, in which there is an open indictment against the witness, the witness may refuse to testify and take advantage of the Fifth Amendment protection against self-incrimination, and to avoid the prosecution’s ability to use any of his testimony against him at trial. The solution to this may be filing a motion seeking to exclude the use of said testimony from use against him. However, this would require the witness to have professional legal counsel from Israeli and US defense attorneys who can advise whether such a motion is warranted, and to prepare and file such motion, with decent chances of being granted.
A significant advantage for the defense is that once a Rule 15 motion is granted, federal prosecutors must furnish the defense or his attorneys with any statement of the deponent in the government's possession to which the defendant would be entitled at trial. A US defendant is entitled to such statements only very close to his trial (unlike the governing law in Israel), and thus receiving a version of it in advance will allow the defendant and his counsel to familiarize themselves with it and better prepare for trial.
It is worth noting that the deposition procedure carries great expense. If the federal prosecution requests the deposition, the court may order it to pay the travel expenses of the defendant and his attorney, as well as the cost of transcribing the testimony. Also, if the federal prosecution requests the deposition, and the defendant is unable to cover the deposition expenses, the court must order the state to pay them. Nevertheless, Rule 15 does not provide for the payment of additional costs involved in this process, which are generally shouldered by the defendant. These may include video recordings of the depositions, interpreter's fees when necessary should the witnesses not speak English, court reporter fees, other attorneys' fees and costs in the US and in other countries where the depositions take place, and more.
In addition, in light of the fact that the court is not obligated to admit testimony collected in such procedures, and in light of the possibility of an extradition proceeding against the witness, it is recommended that the evidence collection process be accompanied by local attorneys. These attorneys should be experienced in taking depositions of this sort and, if the circumstances require, in extradition procedures.