The usual sus­pects…

Finweek English Edition - - Portfolio Punts -

BRI­TAIN HAS BEEN AC­CUSED of de­lib­er­ately turn­ing a blind eye to ma­jor ar­eas of fi­nan­cial cor­rup­tion. The charge is made in a high pro­file re­port by the Or­gan­i­sa­tion for Eco­nomic Co-op­er­a­tion and De­vel­op­ment.

The out­spo­ken crit­i­cism of Bri­tain fol­lows a detailed re­view of Bri­tish “an­tib­ribery” prac­tices – and their lim­i­ta­tions. That re­view was ini­ti­ated af­ter Bri­tain’s Se­ri­ous Fraud Of­fice ( SFO) in 2006 dropped its in­ves­ti­ga­tion into al­le­ga­tions that BAE Sys­tems had paid large bribes to help se­cure a mas­sive £43bn arms deal with Saudi Ara­bia. The deal’s ori­gins went back into the late Eight­ies, when there was a Con­ser­va­tive gov­ern­ment.

But it was the New Labour ad­min­is­tra­tion un­der then Prime Min­is­ter Tony Blair that pres­sured the SFO to aban­don its cor­rup­tion probe. That was be­cause trade re­la­tions gen­er­ally with Saudi Ara­bia were re­garded as ex­tremely im­por­tant.

Some par­al­lels will be seen here, of course, with the long-run­ning dis­pute over South Africa’s £5bn arms deal in 1999 with var­i­ous Euro­pean firms, cru­cially from France and Bri­tain. Some crit­ics al­lege bribes were paid to var­i­ous ANC min­is­ters and/or their party to se­cure the deal.

The OECD says, with par­tic­u­lar ref­er­ence to the Saudi Ara­bian af­fair: “The con­tin­ued fail­ure of Bri­tain to ad­dress de­fi­cien­cies in its laws of bribery of for­eign pub­lic of­fi­cials and on cor­po­rate li­a­bil­ity for for­eign bribery has hin­dered in­ves­ti­ga­tions.”

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