Corruption Bill (Hansard, 24 March 2003)

§ Lord Falconer of Thoroton

I am publishing today a draft Corruption Bill as a command paper (Cm 5777). The Bill will modernise the law and make it more effective, replacing the existing patchwork of overlapping offences—which date from 1889—with a single statute. The Bill's reforms give effect to a Law Commission report of 1998 and to the recommendation of the Joint Committee on Parliamentary Privilege to enable evidence of proceedings in Parliament to be led in corruption cases. They will also ensure that the UK is up to date in its international obligations and enable it to ratify the Council of Europe Civil Law Convention on Corruption. We recognise that corruption is an intricate and sensitive issue and the Bill will be subject to pre-legislative scrutiny before being introduced to Parliament.

These reforms are part of the Government's overall anti-corruption strategy. This country is relatively free from corruption, but it remains an insidious threat, to which we need to be constantly alert. We have already made important changes to the law.

Part 12 of the Anti-terrorism, Crime and Security Act 2001 extended UK jurisdiction to corruption offences committed abroad by UK nationals and incorporated bodies. Many UK companies have adjusted their policies in the light of this legal change, which is specifically identified in the National Policing Plan 2003–06 as an important issue for forces, though we hope the number of cases will be small.

Part 3 of the same Act gave wide powers of disclosure to tax authorities and others to assist all criminal investigations and proceedings.

The Proceeds of Crime Act 2002 introduced new provisions to strengthen the framework, both for tackling money laundering and for assisting others to access the UK legal system to detect, freeze and recover funds and assets of illicit origin.

The Financial Services and Markets Act 2000 charged the Financial Services Authority (FSA) with reducing the extent to which financial institutions are used in connection with financial crime. The Act gave the FSA a range of powers, including the power to make rules on money laundering and the ability to prosecute firms for breaches of the Money Laundering Regulations.

The Police Reform Act 2002 set up a new system for handling complaints against the police, under the guardianship of a new body, the Independent Police Complaints Commission (IPCC), which will come into existence as a shadow body next month. Under the new system, which will start next year, police forces will be required to refer all serious cases of corruption involving police officers to the IPCC, whether or not a complaint has been made.

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We will continue to ensure that the UK maintains high standards in its domestic law and practice on corruption. The Committee on Standards in Public Life, now chaired by Sir Nigel Wicks, provides independent oversight: its remit is to examine current concerns about standards of conduct of public office holders and to make recommendations "to ensure the highest standards of propriety in public life".

However, the international dimension is crucial in this inter-connected world, so the Cabinet Office has set up a committee to co-ordinate the work of the departments and agencies most involved. The following action has been taken:

The UK has strongly supported GRECO (the Council of Europe's anti-corruption body), whose membership incudes all the 10 states which will join the EU next year. GRECO subjects its member states' anti-corruption systems to peer review and its reports have been made public.

The Home Office, in partnership with the anticorruption command of the Metropolitan Police, is leading a twinning project in Bulgaria. The project will implement an anti-corruption strategy, involving the development of an integrated system for countering corruption within the Bulgarian Ministry of Interior.

The UK has continued to participate actively in the peer review process set up by the OECD Bribery Working Group, which addresses the supply side of bribery—that is, bribes paid by businesses to foreign public officials. The UK also is playing a key role in ensuring that preventive measures against corruption are included in the draft UN Convention against Corruption, to address the demand side of bribery—that is, corrupt behaviour by foreign officials.

The Export Credits Guarantee Department (ECGD) has enhanced its procedures to prevent those engaging in corrupt practices from receiving support. Due-diligence checks are now made on lenders, guarantors and borrowers, as well as exporters and buyers, and information is sought from exporters on the contract award process to assist ECGD in identifying contracts which may potentially give rise to problems.

ECGD has also given special consideration to its procedures relating to agents' commission. Ultimately, if ECGD is not satisfied with the arrangements for payment of the level of commission in any case, it may decline to provide any support for that case.

The UK has supported work by the IMF and World Bank, in collaboration with the Financial Action Task Force (FATF), to tackle money laundering and the financing of terrorism, including adding the FATF recommendations to the list of areas assessed by the fund and bank and endorsing a 12-month pilot programme.

FCO and DFID are jointly supporting the development of the East and Southern Africa Anti-Money Laundering Group, a regional body of the global FATF anti-money laundering system. In partnership with the EU, DFID is also supporting an 53WA anti-money laundering programme under the auspices of the Asia-Europe Meeting (ASEM) process.

DFID supports programmes on public expenditure management and good governance throughout the developing world that help to put in place key preventive measures against corruption. DFID also supports anti-corruption commissions in Honduras, Malawi, Pakistan, Sierra Leone, Uganda, Zambia and is developing support for the commission in Nigeria.

In May 2002, DFID and the Home Office organised a seminar on mutual legal assistance for practitioners from 16 key African and Asian countries.

The Department for International Development (DFID) worked closely with the National Audit Office on how its own internal planning and management systems address corruption risks. DFID will be working to strengthen its own internal systems and improve awareness of corruption risks in the management of its programmes.

The UK has led the development of the Extractive Industries Transparency Initiative, announced by the Prime Minister at the Durban World Summit in September 2002, which seeks to encourage company and government transparency over payments and revenues arising from the exploitation of natural resources. The initiative aims to reduce the risk of misappropriation of these revenues and increase the likelihood of their contributing towards sustainable growth and poverty reduction.