Britain has dragged its feet, exasperating the Organisation for Economic Cooperation and Development (OECD) and facing threats that British multinationals may be frozen out of state contracts in Europe and the US.
But now chancellor Gordon Brown, under some pressure in the Commons, stated: ‘We inherited a provision whereby tax relief was provided for bribes paid by British firms to gain contracts. We are tackling that and it will be stopped.’
A decade or so ago, there was a big outcry in parliament about the ‘slush funds’ maintained to provide sweeteners as routine in acquiring contracts.
Those at Westminster who occupy the moral high ground threw up their hands in horror at these corrupt practices. But the moralisers scent victory.
International development secretary Clare Short has at last won her hard-fought battle to introduce legislation to give the UK courts jurisdiction over British nationals who commit corruption offences overseas.
This provision will form part of home secretary David Blunkett’s forthcoming Criminal Justice Bill.
But the issue is far more complex than it appears. The Defence Manufacturers Association has accepted there has always been the potential for corruption in arms deals, especially given secrecy often attaches to negotiations.
And many countries that do not possess sophisticated procurement organisations insist on using agents to negotiate. Since they have to be paid, at what stage will this become an illegal transaction?
The new legislation may satisfy the OECD, but whether it will make any difference is another matter. My guess is that lawyers are licking their lips at the prospect of crawling over a new act of parliament, which they suspect will be riddled with loopholes.
And things will just carry on happily as before …
Chris Moncrieff is senior political analyst at PA News
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