Memorandum from the Serious Fraud Office
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.
SFO CRITERIA FOR
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
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
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.