RegulationCorporate GovernanceHome Office to boost SFO’s anti-corruption powers

Home Office to boost SFO's anti-corruption powers

Proposed changes would allow Serious Fraud Office to demand documents and information before a formal corruption investigation is launched

The Home Office is proposing a new power to allow the Serious Fraud Office to
demand documents and information in a bid to crack down on corruption.

The SFO would be authorised to exercise the power before the director had
decided whether there was sufficient evidence to launch a formal investigation.
This would allow the SFO to acquire information needed to help him to reach a
decision.

Under current law the power can only be exercised – in cases of fraud – after
a formal decision has been taken to launch an investigation, which can only be
done if ‘it appears to him (the director) on reasonable grounds to involve
serious or complex fraud’.

A consultation paper from the Home Office suggested that despite the
protection available to whistleblowers under the Employment Rights Act,
individuals and third party institutions, such as banks, prefer to be compelled
to supply information. This prevents individuals and firms from being sued for
breach of confidentiality or under the Data Protection Act.

The paper also poses a series of questions to ‘stakeholders’ in a bid to find
a consensus on what, if any, changes are needed in the law to deal with bribery
and corruption, including the definition of the crime.

An attempt to modernise the law failed a year ago when a joint Lords and
Commons committee – which gave a Draft Corruption Bill pre-legislative scrutiny
– severely criticised some of its basic concepts. This included a definition of
corruption as ‘improperly undermining the agency relationship between anyone
employed by or acting for a principal’.

MPs and peers complained this could exclude cases where the head of one
company bribing the head of another company not to bid for a contract because no
agent would be involved.

The committee preferred a definition involving giving an improper advantage
with the intention of influencing the recipient, or receiving an improper
advantage with the intention of being influenced.

The government feared this would criminalise actions which were not currently
‘criminal’.

The Crime and Security Act of 2001 already extended the jurisdiction of UK
courts to cover actions of UK citizens or companies overseas, but few
prosecutions have resulted.

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