On 20 March the Organisation for Economic Co-operation and Development (OECD) published the UK’s Phase 4 Follow-up Report, in relation to the progress made by the UK on implementing the OECD Anti-Bribery Convention since 2017. The report was presented to the OECD Working Group on Bribery. It details the steps taken to implement the recommendations received and the issues identified during a Phase 4 evaluation in March 2017. Findings concluded that the UK has fully implemented 16 recommendations, partially implemented 18 recommendations, and not implemented 10 recommendations. It was noted that the UK did not report further efforts to publicise and disseminate the Phase 4 report, for example, through public announcements, or press events.
The Working Group considers that, whilst UK has addressed several recommendations, such as reinforcing the role of the Serious Fraud Office in foreign bribery cases, and enhancing the capacity for enforcement of the foreign bribery and related offences, the total number of finalised and ongoing cases remains relatively low, considering the size of the UK economy. In fact, despite an increased level of enforcement of foreign bribery laws, since March 2017, only 3 foreign bribery cases have been concluded (resulting in the conviction of 12 individuals and 1 legal person, in 9 acquittals, and one civil recovery order).
Despite an ongoing dialogue between the UK and its Overseas Territories (OTs), the extension of the Convention has not been finalised in all remaining territories and crown dependencies. This means that in those OTs that have not adopted foreign bribery legislation, legal persons cannot be held liable for foreign bribery.
Regrets have been shown that no steps have been taken to address long-standing recommendations to ensure the independence of foreign bribery investigations and prosecutions (as per Article 3 of the Convention), or to enhance detection through anti-money laundering (AML) reporting mechanisms. A reform of the SARs system has been called for since 2015, but has not been adopted yet. Proposals for such a reform are expected to be delivered in 2019 and scheduled to be completed by 2023. The National Crime Agency reports that two of their foreign bribery cases have been detected through SARs.
Another concern was raised in relation to lack of effective sanctioning in foreign bribery cases, for which further efforts could be made to enhance transparency of court decisions. No steps have yet been taken to ensure that court sentencing remarks and judgments in foreign bribery cases are routinely published and made available. The Working Group noted that more efforts could be made to enhance transparency of court decisions. A process to enhance digital services and modernise courts is due to be completed in 2022.
An initial review of the effectiveness of the Whistleblowing Guidance and Code of Practice was inconclusive and that a further review is expected to be launched in Spring 2019, as foreseen in the UK Anti-Corruption Strategy 2017-2022.
HMRC is conducting a review of its methods and capacity for detecting and reporting foreign bribery, and is in the process of revising its professional guidance in this respect. The Working Group encourages HMRC to proceed with this project, and to include in this review an analysis of the reasons for lack of detection of proven cases of foreign bribery. HMRC has also planned to develop training this year on the detection of bribe payments.
On the positive side, the Working Group welcomed the adoption of the Criminal Finances Act 2017, which grants new powers to the UK Financial Intelligence Unit, in the fight against bribery and facilitation of tax evasion. Following the House of Lords’ Select Committee review of the UK Bribery Act, the UK expressed the intention to review the Guidance to Commercial Organisations regarding foreign bribery.
It was December 2018 when FATF published its review of the UK’s AML and counter-terrorist financing measures, with a comprehensive assessment of the effectiveness of the UK’s measures and their level of compliance with the FATF Recommendations. This review raised concerns about certain areas of weakness to be addressed, and it is undeniable that there is a lot of international scrutiny on how the country will improve its framework to combat financial crime, in a time when much political pressure is on it.
The Working Group will continue to monitor follow-up issues, as well as the possible impact of Brexit on the UK’s foreign bribery enforcement, in particular in relation to international cooperation arrangements with EU countries. The UK is expected to report back by March 2021 on outstanding recommendations, and with annual update reports.
Bribery seems to be a hot topic on the political agenda at the moment. A review of the Bribery Act 2010 by the House of Lords’ Select Committee was published a few days ago to confirm the importance of pushing for a parliamentary and public debate.