Today marks the third anniversary of the 2016 Anti-Corruption Summit, at which the UK committed to a number of ambitious new initiatives to fight corruption both in this country and around the world.

Although many of the UK’s commitments have been implemented, some key pledges are now long overdue. These notably include a commitment to consult on the creation of a new offence for companies that fail to prevent economic crimes such as money laundering.  Robert Barrington, Executive Director of Transparency International UK, asks whether the government will opt to position the UK as a leader of global standards in relation to financial crime – or adopt the expediency of law regulation and low enforcement to attract inward investment in post-Brexit Britain. 

It is a truly fascinating time for those trying to predict what standards of integrity in corporate Britain, and the City, will look like over the coming years. Brexit apart, we have the context of a rapidly-changing balance of power in the global economy, the rise of global emerging markets, companies and global financial centres playing by different rules, a retreat from global standards by some of those who have been key in upholding them, and high levels of political instability underpinned by a toxic mix of populism and corruption.

Much of the speculation to date has been about the UK becoming an offshore haven on the doorstep of the EU – operating to lower standards in a bid to attract inward investment, retain its place as a financial centre and easing back on anti-bribery laws to facilitate exports to non-traditional markets.  But there is a competing narrative which seems to have increasing traction: what would the UK look like if it operated to higher standards?  In a turbulent world, it is entirely possible that post-Brexit Britain, and the City, would be more successful if they stand for global standards, the rule of law and the integrity of their institutions and markets.

As we approach an era in which the UK sets its own standards and priorities, there is cause for optimism.  The UK government’s own Anti-Corruption Strategy, published in December 2017, sets out the case for the UK to be a global leader in anti-corruption standards, including corporate integrity and money laundering.  This is tied to both an economic agenda and a national security agenda, serendipitously reinforced by the Salisbury poisonings which served as a reminder that offering a safe haven to the cronies of corrupt autocrats is not a great security strategy – especially if they are treating you as an enemy at the same time.

The call for the UK to operate to high standards has also come from the new Director of the Serious Fraud Office, current and former (Tory) Solicitor Generals, the Treasury Select Committee and a host of distinguished peers and MPs who wrote recently to the Prime Minister.  Many of these calls are coalescing around the need for more effective corporate liability laws in the UK.

On the thorny issue of corporate liability, the SFO Director recently told Parliament she was “hamstrung” by the so-called identification doctrine, which requires proof of a directing mind at board level for a company to be found guilty of a crime committed in its name.  A new corporate liability regime would be a key building block of a cleaner market post-Brexit, allowing both companies and individuals to be held to account for economic crimes.  It is telling that despite over £100 billion annually being laundered through the UK (according to the National Crime Agency), no significant UK institution has been prosecuted for money laundering.

Alongside strengthening the UK’s approach to tackling money laundering, it is important not to ignore other economic crimes like bribery, where we saw the depressing spectacle of the SFO having to drop investigations into senior individuals at Rolls Royce, despite the company having admitted being guilty of serial bribe-paying and fined £440 million. This contrasts with the approach taken by the US authorities, where both corporates and individuals are more regularly held to account.  In the past decade, there have been £22 billion more in fines for financial crimes by banks and large financial institutions in the US than in the UK – nearly £10 billion of which is from UK firms, according to a Corruption Watch UK.

Fortunately, the Government has already committed to reforming the UK’s corporate liability regime. The only problem is that the commitment was made three years ago and, despite being reiterated several times, there has been no action.  In fact, the strong rhetoric from one part of government has too often been undermined by action from parts of government – such as the spat over whether the UK’s Golden Visa regime should be suspended, and caving in to pressure from the Overseas Territories to postpone implementing new standards.

The recent call from Peers and MPs is for two simple things: a new offence of failure to prevent economic crime, such as money laundering, and a fuller review by the Law Commission of the overall corporate liability landscape.  It should be a no-brainer for Global Britain to do both.