Examination of Witness

Part of Financial Services Bill – in a Public Bill Committee at 2:22 pm on 19th November 2020.

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Duncan Hames:

The corruption perceptions index measures views of the prevalence of corruption in public sectors, whereas for the most part here we are talking about enforcement of corporate wrongdoing. None the less, you are right to record where those countries are in the index.

“Exporting corruption”, our recent report produced for the OECD anti-bribery working group—part of a series of reports published every other year—is the one in which the UK is recognised to be an active enforcer of anti-bribery laws and laws to prevent foreign corporate bribery. None the less, the US is top of the table and, while it is good that Britain remains an active enforcer, the calculation that grants that assignation is such that the UK hung on by a hair’s breadth this year and there is no room for complacency.

The statement that I reference from the Secretary of State for Justice was made when he was Solicitor General, at the Cambridge International Symposium on Economic Crime. His words were that these differences in how the law operates

“result in other jurisdictions holding British companies to account where ours has not.”

He said he was making that observation in an argument in favour of moving towards the “failure to prevent” approach to economic crime.

For all of America’s challenges, I do not think anyone would criticise it for being less assertive in enforcement of the law that it has. Even at a time when one might have feared political interference or the undermining of the Department of Justice, its level of enforcement has remained high, without signs that it is falling back. I think we have to reflect on why that is. It is partly to do with resourcing, but it is principally to do with the challenges of our arrangements for prosecutors.

Lisa Osofsky, the director of the Serious Fraud Office, describes what we have as “a very antiquated system”. She said:

“We are hamstrung right now by the identification principle”.

She explained to the Justice Committee that she can “go after Main Street”—forgive the American references; I am sure you will be able to translate them—but she

“cannot go after Wall Street, and that is unfair”.

When we think about the businesses that each of you represent, you would want there to be a level playing field, where traditional businesses with perhaps traditional ownership models are not facing a greater requirement to uphold the law than much larger, perhaps more anonymous, conglomerates in complex corporate structures spread over many jurisdictions.