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24 Mar 2017

OECD warns Brexit will increase corruption in the UK

The Organisation for Economic Co-operation and Development (OECD) has warned that Brexit could damage the United Kingdom’s efforts to tackle corruption and leave it vulnerable in bribery cases against multinationals. This is stated in the OECD report that evaluates and makes recommendations on the UK’s implementation of the Convention on Combatting Bribery.

The OECD stresses in its report, that an inability by the UK government to tackle non-Brexit problems and pressure from businesses to change the bribery laws could pose threats, associated with leaving the European Union. The organisation reports, that the UK has made solid progress in pursuing bribery investigations and highlights the performance of the UK’s Serious Fraud Office (SFO) in pursuing major corruption cases, such as a multi-million-pound settlement with Rolls Royce. Rolls Royce paid £671m in penalties to settle long-running corruption allegations. The expensive settlement allowed Rolls Royce to avoid being prosecuted by anti-corruption investigators in the UK.

The report says that “efforts must be sustained to improve detection of foreign bribery and achieve stronger enforcement of its anti-bribery legislation.” The OECD states that “although there has been solid progress in anti-bribery investigations, the proportion of cases relative to the country’s importance in global economy is low.” The OECD underlines the concerns of several civil society groups which say that “Brexit could increase the risk of UK companies threatening to relocate and potential loss of UK jobs as a bargaining chip in negotiations with prosecutors over charges. Given that the SFO has on its books some very large UK companies that are significant partners in the government’s industrial strategy, this is a real concern for many Non-Governmental Organisations (NGO) in the UK.”

Sue Hawley, policy director of the civil society group Corruption Watch, told The Guardian that her group had warned of the risk of weakening the Bribery Act or its reinforcement because of Brexit. Hawley said that the Rolls Royce settlement is a clear indication that big firms could pay their way out of an investigation, and that cases like this one has damaged the UK’s stance as a country hostile to corrupt money.

Duncan Hanes, director of policy for Transparency International UK, commented that the OECD report reinforces how important it is to maintain the independence and prosecution of serious bribery offences. In its report, the international organisation makes clear, that “a tightening of the economy could result in a significant strain on public resources, including for law enforcement.” In a separate part of the report, Scotland is mentioned as a place that “limited partnerships” can be incorporated, vulnerable to money laundering.

A UK government spokesman said that “the government welcomes the OECD report, which recognises our active enforcement of anti-bribery laws and we are proud that the UK continues to be commented as a global leader in the fight against bribery. We will consider the recommendations made by the OECD.”