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Last Updated: Friday, 15 December 2006, 12:45 GMT
Very British solution to Saudi problem
By Paul Reynolds
World affairs correspondent, BBC News website

Eurofighter Typhoon jet
Eurofighter at heart of UK/Saudi relations
There will be a few wry smiles in foreign ministries around the world, particularly perhaps at the Quai D'Orsay in Paris and the state department in Washington, at news that the corruption investigation into a huge British defence contract with Saudi Arabia has been suddenly ended.

Foreign competitors will see another performance by 'perfidious Albion', as the British government holds its hand on its heart and promises that commercial interests have played no part.

British lectures on the "rule of law" will lose some of their force.

Other governments - and frankly, many of the British workers engaged on the project - will not believe that the size of the contract in question was not the determining factor. It is for 72 Typhoon Eurofighters from BAE.

BAE had reported that negotiations were at a standstill until the Saudis knew what was going to happen.

There was talk that Saudi Arabia might turn to the US and buy some F-15s instead, or to the French and its Eurofighter rival, the Rafale.

The fact is that the sale of fighters to Saudi Arabia has largely determined British relations with the kingdom for more than 20 years.

There was a mutual interest. The Saudis liked to have an alternative supplier to the US, and Britain certainly liked the work. It has been worth many billions of pounds over the years and has kept tens of thousands in employment, as well as maintaining an expertise within the British aircraft industry.

And in the current state of crisis in the Middle East, with Saudi help needed to fight al-Qaeda and with the British Prime Minister Tony Blair set to take a final tour of the region, now was not the time to upset one of Britain's traditional allies. And harm British interests into the bargain.

Classic example

It was all done with a typically British deftness. It is a classic of its kind in diplomatic and legal history.

Late in the afternoon, the Attorney General Lord Goldsmith got up in the House of Lords and announced that the Serious Fraud Office had decided to give up its inquiries.

The decision has been taken, he said, "following representations that have been made both to the attorney general and the director concerning the need to safeguard national and international security. It has been necessary to balance the need to maintain the rule of law against the wider public interest. No weight has been given to commercial interests or to the national economic interest".

The words were carefully chosen, as Britain has signed up to an international convention saying that "national economic interest" cannot stand in the way of stopping corruption.

In questions afterwards, he made a great deal of his belief that no successful prosecution was likely in any event. This was designed to overcome objections that the inquiry had some way to go (18 months at least, according to the SFO).

He also revealed that he had consulted the prime minister and the foreign and defence secretaries and the heads of MI5 and MI6. The British ambassador to Saudi Arabia (Sir Sherard Cowper-Coles), he said, had been brought in to talk directly to the director of the Serious Fraud Office and his officials.

Yet, the attorney general affirmed, the decision had been for the Serious Fraud Office alone, who had not been "under pressure in any sense."

The Conservatives, who started big defence sales to the Saudis under the Al Yamamah ("The Dove") contract won by Margaret Thatcher in 1985, were supportive.

"There the matter should rest," declared Lord Kingsland after the attorney general's statement.

The Liberal Democrats were critical. Lord Goodhart called it "blackmail" by Saudi Arabia.


Lord Goldsmith was accused by the Liberal Democrat Lord Thomas of violating the international convention.

Lord Thomas pointed out that a comment by the attorney general that "continuation of the investigation would cause serious damage to UK/Saudi security, intelligence and diplomatic co-operation" contradicted Article 5 of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

This says that states should "not be influenced by considerations of national economic interest [or] the potential effect upon relations with another state".

Twenty-two minutes later, the debate was over and the Lords moved onto to talk about the "Technology Strategy Board".

Cue cynicism from around the world.

And we have been here before. In 2001 the British parliament passed the Anti-terrorism, Crime and Security Act, which banned the bribery of officials abroad. Payments made before that law was passed did not result in any prosecutions either.

Nobody anywhere is therefore surprised at this new decision.


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