Joint Committee on The Draft Corruption Bill Minutes of Evidence


Memorandum from the Serious Fraud Office (DCB 13)

  The Serious Fraud Office may investigate and prosecute offences involving serious or complex fraud. Our criterion for accepting cases and the factors we take into account are attached at Annex 1.

Often such fraud will involve the payment of bribes.

  The SFO both investigates and prosecutes domestic cases of corruption which amount to such fraud and affords mutual legal assistance to other countries. Our experience is that in England and Wales the corruption is taken seriously. We have had a comprehensive law on corruption for approximately one hundred years. Second, we have a law that criminalises both public and private sector corruption. Third, we are prepared to extradite our own nationals.

  Since 1988 the SFO has investigated and prosecuted seven cases where corruption was a charge and we have a further three cases currently under investigation. A recent example was the case of R v Stephen Hinchcliffe, who was sentenced to five years imprisonment for bribing a bank official. Our Mutual Legal Assistance Unit has conducted many high profile investigations for foreign authorities, several of which have involved corrupting high level politicians. An example of this is the extensive work that we carried out for the Federal Republic of Nigeria, in its efforts to investigate the extent to which the late General Sani Abacha abused his position as Head of State.

  Those statistics are not a reliable indication of the extent to which corruption is being investigated and deterred through the work of the SFO. Corruption is very often just one aspect of the dishonest conduct of an enterprise. Thus it is very often the case that charges such as fraudulent trading or conspiracy to defraud will be selected in preference to corruption , because they will represent more fully the full extent of the damage that has been done to a business or to the public at large. Similar considerations apply to overseas investigations. For example, although the case concerning the late Genera Abacha involved corruption and the abuse of public office it was primarily an investigation into allegations of theft and money laundering.

  The SFO has been closely involved in the extensive consultation carried out by the Law Commission and the Home Office.

  We particularly welcome the fact that the Bill proposes one broadly based and general offence of corruption. In our experience, this approach is preferable to attempting to define and categorise numerous types of corrupt conduct. It is the approach we took in advocating a broadly based single offence of fraud. We believe that such broadly based offences reduce the risk that technical loopholes can be found and exploited. They also allow the law to keep pace with fast changing business practices.

  Nevertheless the criminal law should be clearly expressed and it must also comply with the emphasis in the Human Rights Convention on "fair warning." We would assert that the proper use of prosecutorial discretion is one important way of ensuring that the line is correctly drawn between morally questionable behaviour and criminal conduct. However, we consider that clause 5, which requires that the conduct of the person who is bribed be "primarily" influenced by the bribe serves the purpose of ensuring that only unequivocally corrupt acts are brought within the ambit of the criminal law.

  We also support the rationale of the definition of corruption being based on the subornation of the loyalty owed by a principal to his agent and we consider that clause 7(1)(a) is the appropriate response to the position of public servants. In our view it correctly affirms the principle that a public servant is the agent of and is answerable to the public, so that the defence of the consent of the principle should not apply.

  We acknowledged that the case for the statutory presumption that currently applies in public sector cases carried little force. The distinction between the public and private sector has become increasingly blurred and the increase in privatisation and public/ private joint ventures has greatly reduced the relevance of the distinction. Furthermore we do not believe that there is a sufficiently strong argument that corruption is uniquely or significantly harder to investigate and prosecute than other forms of serious crime and fraud.

  We welcome the Bill and acknowledge that , by modernising and streamlining the existing law of corruption into one Act of Parliament there will be a considerable benefit to prosecutors and the police and a better understanding by the public and juries of the offence.

Annex 1

SFO CRITERIA FOR ACCEPTANCE

  The key criterion should be that the suspected fraud was such that the direction of the investigation should be in the hands of those who would be responsible for the prosecution.

  The factors that would need to be taken into account include:-

    1.  Cases in the order of at least £1 million (this is simply an objective and recognisable signpost of seriousness and likely public concern rather than the main indicator of suitability).

    2.  Cases likely to give rise to national publicity and widespread public concern. These include those involving Government Departments, public bodies, the Governments of other countries and commercial cases of public interest.

    3.  Cases requiring a highly specialist knowledge of, for example, Stock Exchange practices or Regulated Markets.

    4.  Cases in which there is a significant international dimension.

    5.  Cases where legal, accountancy and investigative skills need to be brought together.

    6.  Cases which appear to be complex and in which the use of Section 2 powers might be appropriate.


 
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