Wide-ranging review of UK corruption defences planned post-financial crisis, says government

by Compliance Complete
Tuesday, 17 June 2014 15:37 GMT

Smiling Union Jack piggy banks are lined up for sale in the window of a souvenir store on Oxford Street in central London January 20, 2014 REUTERS/Andrew Winning

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The review would assess inter-agency information sharing systems and whether the current anti-bribery structures were appropriate, a government spokesman said

By Martin Coyle, Compliance Complete

A wide-ranging governmental review of the UK's approach to tackling corruption has been launched, led by “anti-corruption champion” and veteran politician Ken Clarke, MP. The review will examine internal structures the government has in place for tackling white collar bribery and corruption, and will go further than just assessing the UK Bribery Act, which took effect in 2011. 

The review will look at the various bodies tasked with fighting corruption, including the Serious Fraud Office (SFO), the City of London Police, the Metropolitan Police, and the new National Crime Agency.

A spokesman for Clarke, the Conservative minister without portfolio, said the review would assess if the agencies' information sharing systems were as effective as they could be, and whether the current anti-bribery structures were appropriate. "[The review] will ensure that everything is working as it should," the spokesman told Compliance Complete. He said the government would look at whether resources were being shared appropriately. 

"It's about corruption on a general scale, prompted by [Ken Clarke's] ministerial will with a mind to some of the allegations that came out of the financial crisis," the spokesman said. The review would have a high priority, he said. 

Barry Vitou, a partner at Pinsent Masons, said the UK's approach to tackling corruption was uncoordinated and that the review appeared to make sense. He said that there was a clamour among the public to punish companies for wrongdoing. 

"There is widespread political support to stamp out corporate and white collar wrongdoing. The public mood is that criminal law should apply to corporates and the man in the street alike. It should not be a case of ‘one rule for them and another for everyone else’," he told Compliance Complete. 

Vitou said that any politician who appeared to drag his or her feet over a review would be given short shrift by the public. He said the review was more likely to be about ensuring that enforcement of existing laws worked properly, and less likely to be about changing legislation. 

"The government is looking at how fraud is being investigated in the UK and how it can be done better," he said. 

Vitou said part of the problem was that the current legislative framework made it difficult to prosecute bribery and corruption and corporate fraud-related issues. 

"There is no question [that] the SFO has not been given enough money to tackle these issues," he said. "The current framework could work better...the reality is that government has cut fraud enforcement budgets. It is right to review how much this should really cost and who should do what to ensure effectiveness. In that context, the case for the SFO is as strong today as the day it was set up," he said.

In February, deferred prosecution agreements became UK law. Under the changes, companies are able to pay penalties and take other restitution measures to avoid criminal sanctions. The agreements will be available to the SFO and will be used as a means to avoid lengthy and expensive investigation and court costs in serious cases of fraud or bribery and corruption. Tough new sentencing guidelines for fraud, bribery and money laundering offences committed by corporates will also be introduced in October, which could see companies hit with fines amounting to 400 per cent of the “harm” caused by the offence. 

David Green, SFO director, earlier this month called for companies to be made criminally liable for failing to prevent fraud, thus making it easier for prosecutors to bring charges. The changes would complement the introduction of DPAs, he said. 

The spokesman for Clarke’s office said the investigation was at an early stage and that he could not pre-judge what its outcome would be or when any conclusions might be reached. The Home Office and the Ministry of Justice declined to comment yesterday.

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