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December 2014

westminster_law

The global angle: learning from our international institutions

By | Corruption, Multilateral Development Banks, News | No Comments

Three years after the Bribery Act came into force, the Crime and Courts Act 2013 was introduced, whereby the SFO and the DPP picked up the carrot of Deferred Prosecution Agreements to add to the stick of the Bribery Act. DPAs in the US federal system have been used by the Department of Justice and the Securities and Exchange Commission for over 20 years, and this inherently US approach has proved, to a large extent, successful.

The UK can no longer view corruption in both its jurisdiction and overseas as a sequence of compartmentalised obstacles: it is a global problem that demands international solutions, and a modern way of fighting it is for national and international prosecutorial authorities to work closer together and develop systems that encourage self-disclosure like DPAs. The UK has traditionally relied upon its own rich legal history, but the introduction of DPAs squarely based on the US model is a welcome addition to the armoury of mechanisms available in the global anti-corruption fight and the mere fact that the UK is prepared to adopt a foreign system is promising.

More needs to be done, however, as the same old problems remain (e.g., lengthy and expensive proceedings which are difficult to prove and which are not rehabilitation based) and we need to look beyond criminal law if we are to progress faster than corruption advances. In this regard, lots more can be learned from the anti-corruption offices of the Multilateral Development Banks where not only are intelligence sharing and self-reporting mechanisms prolific, but a more ‘commercial’ sanctions-based civil system is the norm.

The MDBs (e.g., the World Bank and the European Bank for Reconstruction and Development) have their own sanctions procedures that are in stark contrast to traditional national enforcement mechanisms and have helped shape the future in the fight against corruption: (i) widening the definition of offences and lowering the threshold for a finding of wrongdoing so that the sheer breadth of conduct that might constitute a sanctionable practice within MDB jurisdiction far exceeds that of national systems; (ii) harmonising sanctions through the introduction of cross-debarment by all MDBs and the adoption of unified guidelines for the investigation of corruption; and (iii) granting of immunity to companies in certain circumstances following self-reporting, in exchange for providing the MDB with essential intelligence such as the wrongdoing of other companies.

These developments in the MDB world have modernised the international fight against corruption and provide companies with the ability to minimise the commercial impact of findings of guilt, whilst offering them a constructive way to reform so as to prevent repetition of misconduct. Moving away from categorising corruption as a purely criminal matter has opened the door to lowering the standard of proof and increased settlements. It is, perhaps, too early to introduce all of the measures used by the MDB community in a national jurisdiction like the UK, but we should not shy away from the progress achieved by other entities in the global fight against corruption.

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