OECD criticises lack of transparency in UK bribery settlements

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By Martin Coyle The Bribery Act has boosted the UK's approach to tackling corruption but there is a lack of transparency when it comes to resolving cases, the Organisation of Economic Co-operation and Development (OECD) said. An OECD report (PDF) praised the Serious Fraud Office's (SFO) efforts in combating bribery and said that the UK government had made substantial efforts to raise awareness of the Bribery Act 2010. This had led to heightened awareness of foreign-related bribery issues, the OECD said. Despite that, the OECD was concerned that in settling foreign bribery-related issues UK authorities are increasingly relying on civil recovery orders which require less judicial oversight and are less transparent than criminal plea agreements. The report said that the "low-level" of information on settlements made publicly available by UK authorities often barred a proper assessment of whether the sanctions imposed were "effective, proportionate and dissuasive". This was a missed opportunity for the UK to provide guidance and raise public awareness of foreign-related bribery issues, the report said. "It is equally concerning that the SFO has in some cases entered into confidentiality agreements with defendants that prevent the disclosure of key information after cases are settled," the report said. The OECD also noted that the UK has been slow to extend the OECD's Anti-Bribery Convention to its overseas territories, some of which are considered offshore financial centres which might be used to facilitate corrupt transactions. The UK should adopt a roadmap to remedy these deficiencies and needed to clarify what it meant by "reasonable and proportionate" hospitality, the report said. "The SFO's process of giving advice to companies and accepting self-reports of wrongdoing also needs to be more transparent and better defined. The UK should continue to provide mutual legal assistance to other countries after settlements, where appropriate," it said. Kevin Robinson, a partner at Irwin Mitchell, said that there were difficulties with ensuring transparency in the civil settlement process. The process, by definition, involved matters of sensitivity and commercial confidence, he said. "The factors that feed into civil settlement discussions are the evidence about the level and nature of criminal culpability and who, as an individual is responsible for that criminal activity and whether that individual has acted at a level within the organisation which fixes the organisation itself with criminal liability. "It also involves issues which are commercially sensitive about contracts and fiscal performance. It is unthinkable for a number of reasons that any of that could be made public, not least for the reason that if it were part of the process no company would ever enter into it. To that extent, it is an uninformed criticism," Robinson said. The SFO welcomed the report and its recognition of the efforts the UK has made in tackling foreign bribery. Director Richard Alderman said that he was pleased to note that the OECD had called for the SFO to be suitably resourced to make better inroads in tackling the crime. He acknowledged there was an issue regarding settlements. "Whereas confidentiality has often been the key that unlocks resistance, if settlements could be more open, the public would have more confidence in the process leading to them. So I fully understand the OECD's concerns and it is my hope that improvements can be made. I believe for example that if implemented, proposals to allow the SFO to enter into deferred prosecution arrangements with companies, with appropriate judicial involvement, will be a positive development that would meet the concerns of the OECD, NGOs and the public," he said. The Ministry of Justice is drafting a consultation on deferred prosecution agreements which will be published shortly, while the SFO has been visiting law firms to see opinions on the proposals. Progress despite cuts Meanwhile, the SFO, in its annual review said that over the past year it had secured prison sentences averaging 55 months for convicted fraudsters, up from 30 months for 2010-11. It said it had also secured more than £50 million from the proceeds of crime last year. The agency said that it had also accelerated the time taken to charge suspects with the average case taking 19 months, down from four years in 2007-08. The agency has seen its budget slashed in recent years; it now has a budget of £36.8 million a year down from £44 million in 2008-09. This will be further reduced in 2014/15 to £30.5 million.