Select Committee on International Development Minutes of Evidence

Examination of Witnesses (Questions 240 - 245)



Mr Colman

  240. We are the International Development Select Committee so we are interested in how we deal with the problems of corruption in developing countries. I understand that evidence was provided by the current Nigerian Government about what happened with General Abacha's millions that he looted. It is not media reports; this is factual and passed on. In the case of the Pakistan Government, the current one has passed very detailed evidence over to here in terms of what they alleged had happened under the Bhutto regime and under the Sharif regime. Nothing has happened. Clearly there needs to be some sort of basis which we can publicise in our report on how, if in fact subsequent governments are willing to provide the audit trail as to what happened, where it happened, where the money went (because they have clear knowledge that it is there). How do you suggest that we ensure that in the future in relation to past corrupt dictators who are in fact moving on, their money can be tracked down, that there can be successful prosecutions and the money returned to the countries concerned? What advice do you give to successor governments in developing countries as to how they can get the United Kingdom Government to act?
  (Mr Thorpe) I suspect I speak for all of us in suggesting that you take us well beyond our remit, authority or knowledge in respect of that question. This is a matter that governments consider and opine on.

  241. Okay. The specific is about Abacha and Bhutto and the Sharifs. The information was provided in all three of those cases. Why was none of them followed up?
  (Mr Thorpe) Again I suspect you may be taking us beyond our collective knowledge but I do not believe it was provided to us. I believe this would have gone to other government agencies.

  242. Could I ask John Abbott?
  (Mr Abbott) You can ask me, certainly, sir. I regret that I am reluctant to speak about individual cases. I am very prepared to speak with the Committee in private session in respect of individual cases. To try and draw it to generality if I may, provided we receive information we will seek to act upon it and to encourage an investigating agency to act upon it. There is a question around timeliness and what information is being provided.

  Chairman: Maybe we would like to take you up on that offer. We will let you know.

Mr Worthington

  243. Can I go back to something Mr Thorpe said a minute ago about 15 regimes which were not the strongest financial regimes and about which you had doubts. From memory of when we went through those, they were mainly the very small scale regimes, and Russia. We have not mentioned Russia so far. Are you taking any special efforts to deal with what is obviously a very large scale problem in that country where a large amount of money is probably being attempted to be recirculated within our economies?
  (Mr Thorpe) Russia indeed was one of the 15 listed. I will not go over all of them but there are a large number of small island financial centres. There are also the Philippines which are not small or Israel which is also not small in this regard. The point remains more or less as I suggested before. We would expect institutions since this has been published—not by ourselves, I might add, but by an international body which is in a position to give this kind of observation—to apply this in their review of suspicions or other information and to be cautious in respect of account opening or transactions where they connect to any of these jurisdictions. In terms of what has it shown so far, I am afraid we are talking about something that was published in June and with the way these things go it will be some time before we conduct sufficient reviews to see whether there is a pattern that is emerging in respect of responding to this extra information.

  244. The point I am making is that on the borders of the European Union we have an economy which is now operating in a different way from how it operated in the past, from being perhaps sealed off to where a major motivation for economic activity there is to get the money out of the country and to be recirculated. Would you develop country strategies against individual strategies? Do you anticipate that occurring? I know it is early days for you.
  (Mr Thorpe) I think you are quite reasonable to ask that, without compromising the point I was making before. We look internally to see where problems are emerging and that does inform us when we go to look at particular institutions and their systems and controls. If we were looking at a particular institution tomorrow that had a large and developing business with Russian institutions we would pay particular attention to that. We are as informed by this type of announcement as the institutions we regulate, so it will affect our view of matters, yes. I would hesitate about proximity. With the capacity for these transactions to be flitting around through the internet at any pace, the smallest countries can be major channels in this respect.


  245. Thank you. Mr Abbott, would you be prepared to stay behind if we went into private session to give us the evidence which you suggested you would be willing to do?
  (Mr Abbott) Certainly, Chairman.

  Chairman: We would like to do that. Perhaps I can say thank you very much to our witnesses. It has been very informative for us and an essential part of our enquiries. Thank you all very much.

  Qq. 246-269 were heard in private and not reported to the House at the request of the witnesses and with the agreement of the Committee.

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