Memorandum submitted by The Serious Fraud
Thank you for your letter of 11 December 2000.
I attach, as requested, a Memorandum, giving the details you asked
for regarding the role played by the SFO in investigating and
prosecuting cases of corruption. You will note that we have had
no experience of prosecuting cases in England and Wales involving
corruption in developing countries, which is hardly surprising,
as the statutes presently in force which enshrine the law relating
to corruption do not have extraterritorial effect. We have, on
the other hand, some experience of investigating cases on behalf
of developing countries in which corruption allegations are made,
under mutual legal assistance arrangements. The memorandum gives
more information about our powers to assist overseas countries
in this way. Please do not hesitate to get in touch should you
require further details or something is not clear.
Director, The Serious Fraud Office
To the best of my knowledge, we have not dealt
with any corruption cases from developing countries, as domestic
investigations ie with a view to bringing a prosecution in the
UK. I do not think that our records make it possible to research
cases that have been referred to us for vetting and which have
been turned down and any records that exist would not necessarily
identify cases by country of origin. However, from memory, we
have rejected one major case recently, that was referred to us
by the World Bank, which demonstrated most, if not all, of the
points that we make below.
The current debate about tackling international
corruption ranges through many different fora and the SFO has
played an active part. We consistently make the point that corruption
is a particularly difficult offence to investigate and prosecute.
Among the points that we make are:
1. That the sums involved may be huge and
the harmful consequences extremely grave. However, if the manner
in which the offence was committed does not involve a fraud, the
SFO will have no remit. Some corruption can be so blatant, particularly
if it is committed in a jurisdiction where corruption is endemic,
that it cannot be said to involve a serious or complex fraud.
2. However, we find that most large cases
of corruption do involve an element of fraud, for example, a paper
trail will have been created, to conceal the source and destination
of the bribe monies and if this can properly be described as complex,
then we would be able to consider investigating the offence.
3. The Committee will be aware that jurisdiction
is a central feature of the current debate. In our view it is
important to realise that extending jurisdiction, so that trials
may take place within the UK for offences of corruption largely
committed abroad, will not necessarily increase the number of
cases that are prosecuted. This is because the central problem
with investigating and prosecuting this type of crime is producing
witnesses and other evidence that is truthful and completely reliable.
By its nature, a corruption prosecution often involves calling
witnesses who are by no means untarnished. Furthermore the offence
has usually involved the creation of false documents and the destruction
of other vital evidence. If this has taken place in another jurisdiction,
the wholehearted support of the authorities there is vital, if
we stand any chance of mounting a credible prosecution in the
UK. The problem is exacerbated but by no means confined to the
impossibility of compelling frightened and or compromised witnesses
to attend court in the UK to give evidence.
4. We think that it is important to emphasise
that the SFO and to the best of our knowledge the UK generally,
have no difficulty at all in providing legal assistance to any
foreign jurisdiction that mounts an internal investigation, with
a view to prosecuting themselves. The committee will know that
this assistance is capable of extending to extraditing our own
nationals. It seems to us that the principle that a defendant
should expect to stand trial before the courts of the country
where he has committed the offence is important. If it can be
seen to be enforced it is also capable of acting as a significant
deterrent. Furthermore and this is a vital point, it makes it
far more likely that all those implicated in the offence can stand
trial together, both the offeror and acceptor of the bribe and
those who have conspired to commit and aided and abetted the offence.
There is a strong likelihood that extra territorial trials within
the UK would take place in the absence of co- defendants. This
is an overwhelming advantage to the defence and in this type of
case, an almost insuperable difficulty for the prosecution.
5. The SFO has given critical support to
the investigations of foreign authorities in several high profile
cases that involve corruption. We have used our compulsory powers
to obtain documents and to interview witnesses. We have a Mutual
Legal Assistance Unit that is devoted to assisting foreign authorities.
We will provide them with advice on how to structure and draft
their requests, before the are submitted to the UKCA at the Home
Office. We will invite foreign judges and investigators to come
to the UK, to discuss investigations, examine evidence and on
occasions, to conduct interviews alongside our own investigators.
We are currently assisting the Nigerian, Indian, South African,
Zambian, Ukrainain and Malawian authorities with major investigations.
We also encourage delegations from other jurisdictions to visit
us. Within the last year, we have hosted visits from prosecutors,
judges and other officials from many other jurisdictions, including
China, Russia, Serbia, Georgia and Kenya.
Serious Fraud Office