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
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.
Memorandum from the Crown Prosecution
Service (DCB 15)
As in many countries few "private to private"
corruption cases are prosecuted in the UK. The bulk of public
to private corruption cases which come before the courts currently
are prosecuted under other offences (such as fraud). The present
framework of offences in the area of corruption is workable. However,
from time to time, there can be confusion over the ambit of an
offence. A rationalisation of the law in this area could be beneficial.
1. WHETHER PROPOSED
1.1 A. Whether they will be readily understood
by police, prosecutors, jurors, the public etc.
We anticipate that the following definitions
could be problematic and give rise to some uncertainty as to their
Clause 1 (corruptly conferring an
advantage) and clause 2 (corruptly obtaining an advantage) are
on the face of it very wide offences which are only qualified
in limited circumstances by later exception clauses (clauses 6
and 7): how wide are they intended; problems of proof in non-pecuniary
"Clause 3": a person commits
an offence if he performs his functions as an agent corruptly
even if does not receive any reward. Therefore even if he performs
his function in expectation of or hope of a reward he will come
under this clause.
"Functions": What exactly
is a function?
"Clause 11" (meaning of
agent and principal): this could be either public or private.
"Clause 7" (principal's
consent to no corruption): a private principal can consent to
something which would otherwise be corrupt but where functions
are of a public nature the principals consent cannot exonerate.
This could give rise to problems where the public/private functions
1.2 B. Whether specific offences should
have been proposed for specific situations
No, we favour a more elastic approach with a
general framework rather than rigid charges to reduce the risk
of cases falling through the net.
1.3 C. The effect of not making the new
We do not envisage any significant problems
1.4 D. The effect of removing the presumption
The CPS supports this change. The distinction
between private and public has become increasingly unclear. The
increase in privatisation and the public/private partnerships
has removed any relevant distinction. There will be no practical
effect as we have rarely prosecuted a case in recent years in
which we relied on the presumption.
1.5 E. Whether the agent/principal analogy
is still relevant, in particular in the case of public acts
We support the reasoning behind the definition
of corruption in the Bill based on the agent/principal analogy.
1.6 F. The treatment of facilitation payments
It is hard to envisage circumstances where the
CPS would prosecute a case involving a small payment made as a
result of extortion
1.7 G. Should there be a public interest
The CPS is not in favour of a public interest
defence as it could open the door to all sorts of spurious defences.
For instance a public interest defence might
allow a defendant to say "I bribed X because I wanted to
prevent the criminal Y from getting the contract etc. And it could
be argued that the defendant should not have to rely on the Crown
to decide whether he has a defence or not .............."
2. OMISSION FROM
2.1 The common law offence of misconduct
in public office is now being used more frequently. It is particularly
useful in dealing with the behaviour of police officers when their
conduct has been broadly corrupt. There is certainly some confusion
as to the elements of the offence (indeed a potential reference
is being considered by the Attorney). However further consideration
and consultation is recommended on the matter.
2.2 "Trading in Influence": we
considered this potential offence and comparable European legislation
eg a similar offence in France. However although the French provision
is called "Trading in Influence" it is actually corruption
in the sense that we understand it.
The scope of what we understood "Trading
in Influence" to be would have been very wide ranging without
the agent/principal analogy. It would have been problematic when
applied to the activities of some groups such as lobbyists.
3. WAIVER OF
3.1 A. Attorney's consent to prosecution
The CPS view is that the Attorney General's
consent is not necessary. The CPS was a member of the interdepartmental
working group set up by the Home Office to consider the Law Commission's
proposals on the reform of the law of corruption. The working
group agreed with the Law Commission recommendations to remove
the consent provisions in the 1889 and 1906 Acts. It was pointed
out that no consent was needed for the common law offence of bribery.
When deciding to give consent to the commencement of criminal
proceedings the Law Officers apply the criteria set out in the
Code for Crown Prosecutors and take into account the advice of
the Crown Prosecution Service.
The consent of the DPP could act as a necessary
check against private prosecutions which are not in the public
interest. If reduced to the DPP's consent alone that would mean
an individual prosecutor could take the decision under the Director's
PLEASE NOTE THAT the views in relation to the
Attorney General's consent are solely those of the Director of
Public prosecutions and the CPS. The Attorney General has stated
that he wishes to reserve his judgement on this point; and that
he will make his views known when he appears before the Committee