Corruption: UK efforts to tackle financial crime back in firing line

Ruth Green, IBA Multimedia Journalist

In recent years, the UK has been among the most strident voices calling for greater global efforts to fight corruption. But, a dearth of convictions for financial crime and delayed investigations have prompted serious questions about the country’s appetite for tackling corruption.

A series of failed prosecutions has raised concerns about the time taken to examine cases, particularly under the UK’s Serious Fraud Office (SFO) Director Lisa Osofsky, a former US federal prosecutor, who was tipped to revamp the agency’s track record on enforcement. Convictions secured by the SFO fell to 53 per cent in 2018-2019, marking its lowest level since 2015-2016.

In November, following a freedom of information request by law firm Fieldfisher, it was revealed that the agency has secured only seven convictions against five corporates since April 2013. 32 of the 43 criminal investigations opened during this period have not reached a conclusion. Kyle Phillips, a Director in the Corporate Crime team at Fieldfisher, says the conviction rate is ‘startlingly low’ and warns that without significant progress the ‘backlog of cases will continue to rise, risking further delays to SFO investigations.’

You can build a beautiful system but destroy it with one case… The system is functioning, but it has to function in all cases

Drago Kos
Chair, OECD Working Group on Bribery

These findings echo the concerns highlighted in an October report by Her Majesty’s Crown Prosecution Service Inspectorate. It said the SFO had ‘delivered good results in many challenging cases’, but stressed the need for the agency to introduce measures ‘to significantly reduce the impact of current delays on case progression.’

An SFO spokesperson told Global Insight: ‘The SFO is effective at what it does but there are always further actions we can take to improve case progression. This is something the Director is committed to doing and work is underway to achieve this. However, by their nature, our cases will always take a comparatively long time, so progress will not be immediately visible.’ In December 2018, Osofsky told members of the House of Commons Justice Select Committee that she was reviewing more than 70 ongoing cases to ascertain why it was taking so long – in some cases more than five years – to decide whether to bring charges against companies and individuals.

Robert Amaee is the director and founder of Amaee Law and former Head of Anti-Corruption, Proceeds of Crime and International Assistance at the SFO. He believes it is only a matter of time before the agency delivers more convictions. ‘Although there's a perception that recent SFO activity has been less pronounced, the expectation must be that it will before long announce the instigation of one or more significant matters,’ he says. ‘I expect the Proceeds of Crime team at the SFO is champing at the bit to get out there in force and make some noise with the new Criminal Finances Act tools, just as the economic crime team at the National Crime Agency has already started to do, but we haven’t seen any sign of this as yet.’

Anti-corruption groups have also voiced concerns over ongoing delays to the SFO’s probe into allegations that GPT Special Project Management paid bribes to win a Saudi defence contract. In October, the OECD's Working Group on Bribery met with UK government officials to discuss the case amid concerns there could be a repeat of the BAE scandal, during which government pressure forced the SFO to drop its investigation into bribery allegations involving the company following diplomatic pressure from Saudi Arabia.

Drago Kos, Chair of the Working Group, tells Global Insight the outcome of the GPT case would be crucial to the UK’s international reputation on tackling bribery: ‘You can build a beautiful system but destroy it with one case. The UK has one of the best anti-corruption laws in the world and one of the best anti-corruption institutions in the world, the SFO. The system is functioning, but it has to function in all cases.’ The SFO declined to comment directly on the investigation as it is an ongoing case.

Robert Barrington is Professor of Anti-Corruption Practice at Sussex University's Centre for the Study of Corruption and former head of Transparency International’s UK Chapter. He argues that the outcome of the GPT case could give an indication of the UK’s future appetite to clamp down on dirty money. ‘If the economy looks in trouble after Brexit there will be a huge temptation for the government to not care how companies win business overseas or where the money comes from,’ warns Barrington. ‘This already happened a little after the financial crisis when the government introduced the ‘golden visa’ regime.’ The controversial scheme attracted hundreds of wealthy foreign investors to the UK, but was halted in 2018 over fears it had created an easy route for illicit wealth to enter the country.

Barrington says there has been a discernible shift in the government’s anti-corruption efforts. ‘In 2017, I would have been a lot more positive,’ he says. ‘There was no doubt in my mind that David Cameron was very committed to certain aspects: he held the 2016 Anti-Corruption Summit; unexplained wealth orders were introduced and are now being used and there was a sense that there was a change in political will. The question is now about the political will after Brexit. Fighting corruption across the world [involves taking both] steps forward and steps back. The UK is on the verge of taking steps back and the government has some tough choices to make.’

Peter Solmssen is former general counsel at Siemens and Chair of the IBA Non-trial Resolutions of Bribery Cases Subcommittee. ’I think we're making amazing progress,’ he says. ‘There may be frustration that there hasn't been enough activity, but there's been a hell of a lot of activity. And, seeing more of it means that we're discovering more, which otherwise would not have been discovered or prosecuted at all. What was tolerated for generations won't be tolerated anymore.’