Page last updated at 12:27 GMT, Friday, 17 October 2008 13:27 UK

UK under fire over bribery laws

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The OECD was unhappy about the UK's handling of the BAE Systems probe

The UK has been criticised for lacking the "political will" to investigate companies accused of foreign bribery.

Weaknesses in UK bribery laws meant it was "difficult" to bring cases, the Organisation for Economic Co-operation and Development (OECD) said.

The UK was strongly criticised in 2006 for dropping a probe into bribery allegations involving defence firm BAE Systems over a 43bn Saudi arms deal.

Ministers said a "comprehensive" plan to tackle bribery was being developed.

'Legal deficiencies'

New legislation toughening anti-bribery laws would be introduced in the next Parliament, Justice Minister Jack Straw said.

The UK's progress in enforcing the OECD's anti-bribery convention, ratified by all members in 1997, was "disappointing" and the issue must be given a "much higher priority", the organisation said.

The purpose of the recommendations we are making is to motivate. We are saying the situation cannot go on
Mark Pieth,
OECD

The UK's commitment has been under scrutiny since the Serious Fraud Office (SFO) dropped its probe into claims that BAE Systems made illegal payments to Saudi officials through a slush fund, claims the company has denied.

At the time, the government defended the decision saying Saudi Arabia could withdraw co-operation over security and intelligence matters, posing a threat to the country's national security.

The Law Lords overturned an initial ruling that the SFO had acted unlawfully in dropping the probe, but opposition parties and anti-bribery campaigners said the SFO had been subject to substantial political pressure before acting.

The OECD said it was "seriously concerned about the UK's continued failure to address deficiencies in its laws on bribery of foreign public officials and on corporate liability for foreign bribery".

While there was "welcome" evidence of progress in some areas, Mark Pieth - chairman of the OECD's working group on bribery - said current laws were not adequate.

"There is a question about whether there is the political will," he said.

"The purpose of the recommendations we are making is to motivate. We are saying the situation cannot go on."

The OECD has particular concerns about the role of the Attorney General, the UK's chief legal adviser, and whether the independence of the post-holder is compromised by being a member of the cabinet.

The Attorney General should not be able to give direct instructions to the SFO on individual cases, nor should individual prosecutions require their consent, the OECD believes.

'Progress'

It cannot force the UK to adopt new laws although its latest censure of government policy - the latest in a series of critical reports stretching back to 2003 - does carry significant moral weight.

We have written to the OECD about our plans to develop a comprehensive UK strategy for tackling foreign bribery
Justice Minister Jack Straw

In a written statement, Mr Straw said "significant progress" was being made on strengthening the UK's anti-bribery laws.

The Law Commission is conducting a review of policy options which will inform new legislative proposals during the next session.

"We have written to the OECD about our plans to develop a comprehensive UK strategy for tackling foreign bribery," he said.

"This strategy will build on the solid foundation we have established for combating foreign bribery and strengthen our work with international partners, establishing a clear legal, regulatory and policy framework."

Pressure groups said the UK's record of prosecuting cases of corporate bribery was woeful compared with the US and other leading European nations.

"It is time the UK government accepts its failings and commits to urgent and robust action," said Chandrashekhar Krishnan, the UK executive director of Transparency International.




SEE ALSO
Q&A: The BAE-Saudi allegations
30 Jul 08 |  Business
Lords says SFO Saudi move lawful
30 Jul 08 |  Business

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