The international scope of both the UK Bribery Act (introduced by Labour when I was a Cabinet Minister) and the US Foreign Corrupt Practices Act is important, with anti-corruption campaigners reporting a continuing rise in global bribery and corruption.
For instance, Goldman Sachs has agreed to pay $2.9-billion (£2.2-billion, or about R44.9-billion) to settle a US-led investigation and its Malaysia division also agreed to plead guilty to violating foreign bribery laws linked to the alleged looting of the country’s sovereign wealth fund, 1MDB.
Airbus had to set aside €3.6-billion (about R64.74-billion) in 2020 to cover settlements with authorities in the US, France and Britain after admitting it had paid huge bribes on an “endemic” basis to secure contracts in 20 countries.
Furthermore the Covid-19 pandemic has opened up opportunities for bribery and contracts-for-cronies worldwide, including in Britain where an uncommon number of ministerial mates seem to have benefited.
But maybe the strikingly low rate of prosecutions under the Bribery Act is because of the slow pace of bribery investigations, with many criticising the time it had taken for bribery charges to be brought and cases to reach trial.
But isn’t the real problem that there are simply not enough resources being invested by the government into enforcing the Bribery Act and money laundering legislation?
Enforcement and investigative agencies (such as the UK Serious Fraud Office, National Crime Agency and Financial Conduct Authority) require proper resourcing to utilise the legislation to conduct investigations and bring prosecutions. Yet across the world that has not been the case. In the UK, these agencies have not had anything resembling the resources required to combat financial crime in recent years, leading to a request in 2019 from the head of the National Crime Agency for an additional £2.7-billion in funding for that agency alone. An additional £2.7-billion, requested by just one of the agencies involved in combating bribery to enable it to do its job properly.
No wonder London is regarded as the money laundering centre of the world, where the legislation is stringent but the enforcement and policing is certainly not.
As I demonstrated in House of Lords debates in 2017-2018 on the Sanctions and Money Laundering Act, London-based global corporates such as HSBC, Standard Chartered and Baroda Banks facilitated massive looting and money laundering from South African taxpayers under former president Zuma and his cronies the Gupta brothers.
London-based corporates McKinsey, KPMG, and Bain & Co admitted to raking off multi-million fees from former president Zuma’s regime, its state agencies and state-owned enterprises. So guilty of complicity in corruption were these corporates that, when it was exposed, they sacked their top South African-based executives and made promises to pay millions of fees they had received.
But why weren’t they prosecuted in London under the Bribery Act? Is it because, like another London-based corporate guilty of whitewashing corruption and securing a lucrative fee, Hogan Lovells, told the Solicitors Regulation Authority that its South African arm enjoyed the same name only for “branding purposes”, and that London bosses were therefore not culpable in any way?
You could have fooled me, looking at its website and activities internationally: it is a global corporate like the others I have named. Surely corporates operating from London should be bound by the Bribery Act? Otherwise people will ask: is it worthless? DM
Become an Insider
In my opinion we need two things.
1. We need much better international laws covering the actions of international corporates. If bribery is committed in South Africa, South Africa suffers the losses, and South Africa should thus have jurisdiction to go after the international corporates wherever they are based. The problem with London-based international corporates being charged in Britain under British law is that nobody in Britain cares – the criminal activity impacted people in a far off country.
2. The law should make it much easier to go after the Senior Executives of the guilty companies. Even if an international corporate is successfully charged for bribery, and actually pays fines and/or refunds some of the stolen money, there are usually no consequences for the top people. They can simply resign, or retire, and then live happily ever after on the proceeds of their (or their company’s) crimes. These top executives are paid massive amounts to run the companies, which (whether they like it or not) implies that they are accountable. The bribery laws should hold them accountable.
Unfortunately, British laws are written by the wealthy sector of British society, and are thus primarily intended to protect that wealthy sector of British society.
The British public feels very little or nothing for our country, never has, let’s not forget what Cecil John Rhodes and company did to Southern Africa not so long ago.
Maybe a portion of all amounts paid in judgements should go to a ring-fenced international anti bribery/money laundering fund? Or am I just hopelessly naive?😒
On another note …. when are ‘western’ countries like the UK , wake up to the huge influx of ‘capital’ from countries like Russia particularly or China to take over ownership of ‘clubs’ in the EPL as a not so discreet form of money laundering ? Or maybe they continue to believe in Trump’s ‘transactional’ philosophy – you scratch my back … and I will yours !