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How serious is the UK about taking action against foreign bribery?

At the end of March the Organisation for Economic Co-operation and Development (OECD) published its latest report on steps taken to implement and enforce the OECD Anti-Bribery Convention in the United Kingdom.

This report shows the jury is still out on seriousness of the UK’s commitment to act against foreign bribery by UK companies or nationals. So far, since the Bribery Act 2010 came into force almost three years ago, there has been no conviction of anyone for foreign bribery under the Act. And last year, in 2013, there was only one conviction of someone for foreign bribery under the previous legislation (down from three in 2012).

It seems unlikely that the Bribery Act has ushered in a new era of British corporate virtue. After all, the factors which make foreign bribery likely are still with us: large contracts available overseas, corrupt and/or undemocratic governing elites in many countries, an offshore system to conceal corrupt dealings, and many extremely clever and expensive lawyers and accountants prepared to facilitate dubious practices. Until the prosecuting authorities show they can make convictions stick, then companies will not fear the Bribery Act, even if it is much more draconian than the Prevention of Corruption Act 1906.

In fairness to the prosecuting authorities, bribery investigations take a long time, and the Bribery Act only applies to conduct committed after 1 July 2011. However, if no convictions are forthcoming in the next 18 months, then questions will be asked: is the problem a failure of performance by the Serious Fraud Office (which currently has at least four investigations into corporate conduct overseas underway), inadequate laws, or a lack of will to investigate and prosecute?

It was the termination by the Serious Fraud Office of its investigation into BAE’s Al Yamamah arms deal that in large part prompted the serious criticisms by the OECD of the UK’s failure to introduce adequate laws against foreign bribery after signing the Anti-Bribery Convention.

It may be a big arms deal with Saudi Arabia that is the litmus test of whether the UK can take effective action against foreign bribery. Currently the Serious Fraud Office is investigating a deal with the Saudi Arabian National Guard, covered in Private Eye and Exaronews. This (long-standing) deal is of particular interest for a number of reasons:

  1. It is a Government-to-Government deal and supervised by the UK’s Ministry of Defence. If any wrongdoing is uncovered, it will raise questions about who knew what and when.
  2. When the deal was being negotiated in the mid-1970s, the head of the Ministry of Defence’s arms sales unit, Lester Suffield, proposed approving huge commissions on the deal.  The Permanent Secretary at the Ministry of Defence, then Frank Cooper, approved them the same day.
  3. The Saudi Arabian National Guard was commanded from 1963 to 2010 by Prince (now King) Abdullah, and since then by one of his sons.

It is almost two years since the Serious Fraud Office opened its investigation. The outcome is awaited with interest.

1 comment to How serious is the UK about taking action against foreign bribery?

  • H.L.Hooker

    The Magic Carpet arms contract had another element which did not appear on any previous investigation, the Surface to Air Guided weapons element, a mobile ex British army system sited at Khamis Mhyshait,operated by ex British service personnel in conjunction with the Saudi army who would press the button when engaging Egyptian targets originating in Yemen prior to the 6 day war. The whole air defence system at khahis was manned by the British, pilots ,radar and missiles.

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