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Last Updated: Friday, 18 March, 2005, 13:30 GMT
UK bribery loopholes criticised
Dollars and a laptop computer
Bribery is still a problem in international business
Significant loopholes exist in the UK's fight against bribery and corruption, a new report warns.

The report from the Organisation for Economic Co-Operation and Development says there are too many organisations in the UK tasked to deal with bribery.

None of them, it warns, have sufficient resources to deal with UK companies which bribe foreign officials.

While two cases are being investigated and 11 are under review, not a single person or firm has been prosecuted.

The report comes a week after the Prime Minister's Commission for Africa called for a concerted effort from the UK and other rich states to prevent bribery and punish companies which use it.

The OECD is a Paris-based group of 30 industrialised countries, which researches economic trends and encourages best practice within members' economies.

The group has produced conventions banning bribery and corruption, and guidelines for multi-national companies on ethical behaviour.

Convention

An OECD working group visited the UK last year to assess how it was fighting bribery, as part of a string of visits planned for all members.

The UK signed the OECD's Anti-Bribery Convention in 1998, bringing some of its stipulations into law with the Anti-Terrorism, Crime and Security Act of 2001.

The examiners consider that the very large number of investigative bodies has resulted in problems in achieving coherent action
OECD

But a Corruption Act has languished in draft form since its publication in March 2003, the OECD examiners found.

There had been "no significant progress" implementing new legislation since their previous visit in 2002, they said.

The Home Office said it accepted that the law needed tidying up It said it would introduce the Corruption Bill when Parliamentary time permitted, but pointed out that the OECD report said UK law "now addresses the requirements set forth in the Convention".

Shortages

It was "surprising" that one of the three biggest financial centres in the world, with unusually internationally active companies, had managed to produce no prosecutions, the report said.

But the examiners' main criticism was that there were too many organisations with unclear responsibilities fighting bribery and corruption - and not nearly enough resources or political will.

"The examiners consider that the very large number of investigative bodies has resulted in excessive fragmentation of efforts, lack of specialised expertise, lack of transparency both for the public and for investigative authorities, and problems in achieving coherent action," the report said.

The Serious Fraud Office (SFO) was given the main responsibility for investigating bribery from July 2004 onwards, but had no extra money or people to do so.

Similarly, the UK's 43 local police forces have responsibilities to investigate bribery under the National Policing Plan - even though the Plan explicitly says it expects only a few investigations.

But their resources for investigating economic crime in general have been falling - handicapping the SFO too. since it has no police officers of its own.

Those few agencies which have been given extra funding, such as the City of London Police which received extra cash to cover London and the South-East, are only allowed to spend the new money on local investigations.

"Our 'Lead Force Remit' was designed to cope with serious domestic
Lesotho's Katse Dam
Infrastructure projects have often presented bribery problems
fraud cases that other police forces are unable to resource - not to take on overseas investigations into corruption," Detective Chief Superintendent Ken Farrow of the City of London Police told BBC News.

"We have already discussed this with the SFO and they accept that premise."

Burden of proof

The OECD also noted the mismatch between the large number of press investigations into bribery and corruption and the few investigations officially under way.

Among other cases, it referred to a recent instance of a major defence firm and the SFO's rapid dismissal of an investigation.

The "extremely high level of proof that appears to be required to open an investigation into suspicious transactions" was worrying, the OECD team said.

It noted recent changes to the rules governing which companies can get export deals guaranteed by the government, and criticism from non-governmental organisations that they had been watered down.

It planned to "follow up with regard to any weakening of the rules that could reduce the ability... to detect and prevent foreign bribery," it said.

In contrast to the criticism, however, the OECD examiners referred approvingly to the Proceeds of Crime Act 2002, which makes it possible to take the assets of people alleged to be living off criminally-earned assets.

"The examiners urge the UK authorities to encourage prosecutors to actively pursue the necessary procedures for confiscation in all appropriate foreign bribery cases," the report said.


SEE ALSO:
Oil wealth 'can cause corruption'
20 Oct 04 |  Business
Economic crime 'costs UK 40bn'
17 Oct 04 |  Business
A conduit for corruption?
11 Mar 05 |  Business
Africa report at a glance
11 Mar 05 |  Africa


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