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How should we prosecute bribery in the UK?

Written by Robert Barrington on Wednesday, 2 July 2014

The Bribery Act is four years old. But now we have a bribery law that is fit for purpose in the UK why are we not seeing more prosecutions?

This month brought the third anniversary of the commencement of the Bribery Act. But now we have a bribery law that is fit for purpose in the UK why are we not seeing more prosecutions? This question does not seem to have troubled the Government much in the past, but it is now gearing up to publish the first national anti-corruption action plan. It has appointed a new cross-government anti-corruption coordinator in the Cabinet Office, and from Treasury to Home Office has been saying more about corruption than any UK government in the modern era.

Moreover, the Serious Crime Strategy published in October 2013, highlighted the threat posed by corruption and the need for greater law enforcement coordination.  The good news is that the government is no longer in denial about the threat.  Bribery is only part of this picture, but the four-year old Bribery Act (it was given Royal Assent in April 2010) has been little used to date.  Does that mean we have a problem?

The responsibility for prosecuting bribery is, if we are honest, a bit of a mess. The first line of defence are the various police forces, responsible for tackling bribery within the UK. Experience suggests they are entirely out of their depth regarding the Bribery Act and related legislation, although to its great credit Police Scotland has recognised this and created a centralised anti-corruption unit for Scotland. Next comes the City of London Police, responsible for smaller overseas cases. They are much more clued up, and certainly have a track record – but have made some alarming statements about letting payers of small bribes off the hook. Other small units are responsible for bits of corruption policy, or investigation, or prosecution. Various regulators, notably the Financial Conduct Authority (FCA) can oversee bribery in specific sectors, as well as related crimes such as money laundering.  And following the Serious Crime Strategy, the National Crime Agency (NCA) has a lead on economic crime generally and has a specific remit to lead on tackling some forms of corruption – particularly when it relates to serious and organised crime.  What role the NCA will play, and how, is still uncertain – but it could be transformative in the UK’s fight against corruption.

Meanwhile, larger bribes paid overseas and corporate offences are recognised as more complex and higher impact, and so are the specialist responsibility of the Serious Fraud Office (SFO).

A few years ago the SFO was notable for its lack of bribery prosecutions. Its record has improved since the disaster of the BAE Systems case, and from what has been made public, it is known to be investigating some large and important cases – Barclays, GlaxoSmithKline, Rolls Royce, ENRC, to name a few. These would be big-name prosecutions and send out a clear message about the SFO’s remit, reach and intent. But the SFO also has its problems. It is being sued over a case that seemed to go wrong – itself a worrying development, as it ties up resources, and implies that the rich and powerful might be able to use their wealth and power to intimidate the UK authorities into inaction. The fact that it ties up resources is important, as the budget has been cut in half over the past few years. Perhaps most fundamentally, the SFO does not seem to scare people enough. A few high profile corporate cases, and a few company directors brought to book, would change that. But will it happen?

The government has recently revealed that it is undertaking a review of the situation. Followers of ‘Yes Minister’ will know that a review is a good way of looking like you are doing something. But in this case a review is probably a good thing, given the historical lack of coordination and division of resources.  The caveat is that it is said to be a review of funding arrangements as well as the institutional structures.  If this is another term for cost-cutting, the government will have cause to be deeply ashamed of the gap between its rhetoric and its actions.

It is no surprise that there have not yet been substantial Bribery Act prosecutions, particularly of large companies – the kind of case that is the responsibility of the SFO. Cases can take several years to come to light, and several years to investigate and prosecute. This year, however, we might expect to see the first substantive cases coming through, perhaps using the new tool of Deferred Prosecution Agreements. However, the government is right to be asking the question of how effectively the UK is supporting the enforcement of the Bribery Act and other anti-corruption legislation. If the UK is to take corruption seriously, we need to have institutions that are fit for purpose.

So where does this leave the SFO? It is disturbingly reminiscent of the last time the SFO was ‘reviewed’, a couple of years ago, in what was widely-perceived as a land grab by the Home Office with no clear rationale and half-formed plans that seemed likely to make UK anti-bribery enforcement less effective not more effective. In TI’s view, there are a set of characteristics that make such agencies effective. These include:

  • Joint teams of investigators and prosecutors. This was a key recommendation from the 1986 Roskill Report that led to the creation of the SFO, and since then experience has strengthened the case that such centres of excellence are the best way to tackle complex corruption cases.  We do not know how well the system works at the SFO – there have been some claims that it does not.  The principle is sound, but if there any genuine doubts about performance, they should be articulated and addressed.
  • Corruption as a top priority. One of the great advantages of the SFO is that is has only two jobs to do – fraud and corruption. Other mooted homes for it have additional priorities – human trafficking, child abuse, terrorism, cyber-crime, drugs and organised crime to name a few. In such company, there is simply no way that corruption would be a top priority or that there would be a sufficient number of genuine corruption specialists.
  • Proper resourcing. With a budget cut by almost fifty percent over four years, it is no surprise that the SFO is under pressure. In big cases, it faces large London law firms and accountants, with huge sums of corporate money available to pay fees. The SFO needs more firepower.
  • Political will. Politicians need to decide that corruption is a priority, decide which institutions they will use to fight it, and back them to the hilt. That will create a sense of direction and purpose and attract the top talent.
  • Transparency. Citizens need confidence that cases are being investigated, action is being taken, and that there is no political interference – particularly with the SFO which dropped the notorious BAE Systems corruption case after political pressure, and is under scrutiny for a similar case involving GPT/EADS. The SFO has historically not done well on transparency – certainly there is room for improvement.

An agency with these characteristics need not be the SFO, but it would seem strange to abolish the SFO only to replace it by a similar body with more funding. One option is to create a dedicated Anti-Corruption Agency with a wider brief on tackling corruption. What would be unlikely to work is wrapping the SFO into a broader crime-fighting umbrella body such as the new National Crime Agency in which corruption is not the main priority.  The NCA’s role is still developing, and it will undoubtedly play an important part in the UK’s fight against corruption. But it is untested in the field of international corporate bribery, does not have combined teams of prosecutors and investigators, and corruption is not its prime remit.

The SFO may have a patchy history, but it has a unique role and a set of unique characteristics, and so there needs to be an overwhelmingly good case made for replacing it rather than investing in improving it. Creating uncertainty about its existence every couple of years is unlikely to attract the best staff or act as a deterrent to corporate bribe-paying. Far better is to resource it properly, implement any necessary improvements and give it unambiguous political backing.

Putting the future of the SFO aside, a review of the UK’s anti-bribery regime is very welcome. The problems are well known and include:

  • Lack of coordination between different departments and units. This has been a long-term problem, epitomised by the fact that no individual or department is strategically responsible for tackling all aspects of the UK’s approach to fighting corruption. There is a lack of accountability and strategic direction. The Home Secretary seems to be stepping into the breach, but that will always be a partial solution given the extent of overseas involvement. Meanwhile, a review and rationalisation of the disparate approach outlined above could certainly improve the situation.
  • Absence of data and information on corruption in the UK.
  • Resources spread too thinly over a number of units and departments. Coordination does not necessarily mean collecting it all together into one department, although there is certainly a case for some rationalisation; it does mean intelligence sharing, having clearly demarcated areas of influence and above all working to a coherent strategy.
  • Lack of expertise in institutions that are directly responsible for anti-corruption activities, such as the police.
  • Dismantling of some of the UK’s institutional defences against corruption.
  • Priorities dictated by funding arrangements rather than corruption risk.
  • Resources that do not match the scale of the problem – a false economy given the economic damage caused by corruption and the potential fines and confiscations.
  • Continuing gaps in the legal framework.

This government’s rhetoric has been very sound on the issue of corruption – from the Prime Minister’s statements at the G8 and in the UN’s High Level panel on the Millennium Development Goals and the Home Secretary’s recent speech on organised crime to the Chancellor’s warning to the City on financial integrity and the Department for International Development’s increasingly robust approach. The government has also followed through with new proposed legislation such as the Serious Crime Bill – which does not go far enough, but is a distinct improvement.

The current review of anti-bribery enforcement is a chance to turn words into action. This will benefit the UK economy, the fight against organised crime, British resources-resources-business, the UK’s influence in the world and those citizens in the UK and overseas who are the victims of corruption. It’s a welcome sign that the government acknowledges there is a problem.  But reviews can only take you so far.  The government’s real responsibility is to make the system work: allocating resources and demonstrating political will, so that we will see more people held to account for their crimes.


Read 12931 times Last modified on Tuesday, 24 November 2015 11:47

Robert Barrington

Robert is TI-UK's Executive Director. You can view his full bio here, and tweet him @TIukED.

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