Correspondence

Anti-corruption newsletter: summer 2019

Published 23 July 2019

Ministerial and champion highlights

Welcome to the summer 2019 edition of the anti-corruption newsletter. The last quarter has seen the UK make strides forward with progress on issues such as Companies House reform proposals and consultation and guidance for businesses on how to avoid corruption when working overseas through the Business Integrity Initiative.

I am proud to see our campaign on Beneficial Ownership Transparency have such a visible platform at the recent Open Government Partnership Summit and increasingly with partners around the world. Being able to measure progress on our Strategy commitments is key.

We have been working closely with civil society to develop a basket of global indicators focused on providing a method of measuring progress in the UK’s efforts to tackle corruption. The indicators selected are designed to periodically measure how the UK is doing in tackling corruption and are focused on the three main priorities of the anti-corruption strategy: strengthening security, promoting prosperity and increasing trust in public institutions. Once published, this will be a great step forward for the UK, enabling a better understanding of the scale and nature of corruption and providing a more objective measure of UK progress.

John Penrose MP, PM’s anti-corruption champion

Economic crime plan

After approval by the Economic Crime Strategic Board the government published our new economic crime plan on 12 July 2019 in parallel with the asset recovery action plan. It builds on a range of plans and strategies, including the anti-corruption strategy, to provide a clear picture of the action being taken by the public and private sectors to address economic crime.

Open Government Partnership

The anti-corruption champion has been promoting the UK’s international campaign on beneficial ownership transparency. In May he wrote out to around 50 countries and territories encouraging them to develop open and free to access company beneficial ownership registers. He also attended the OGP Summit in Ottawa, where he launched the draft Beneficial Ownership Transparency Disclosure Principles and co-chaired the inaugural Beneficial Ownership Leadership Group meeting. He shared a platform with Prime Minister Trudeau at the opening ceremony, where he gave a talk about the global beneficial ownership campaign.

USA

En route to Canada the champion visited Washington D.C. where he spoke at an event hosted by the US Commission on Security and Cooperation in Europe at the House Financial Services Committee. He outlined the UK’s approach to beneficial ownership and encouraged US Congress to continue in their efforts to legislate for corporate transparency.

Extractive Industries Transparency Initiative

In June, the champion attended the Global Conference of the Extractives Industries Transparency Initiative in Paris; he met with international partners, garnering support for the beneficial ownership transparency campaign.

House of Lords Response

We have published our response to House of Lords Select Committee on Bribery Act 2010 report.

Following an extensive evidence session, the Committee came to the conclusion that the Bribery Act is “an exemplary piece of legislation” which can be considered “an international gold standard for anti-bribery and corruption legislation.”

The report made 35 conclusions and recommendations around implementation and enforcement, which focussed on the operation of the particular provisions of the act, including the section 7 ‘failure to prevent’ offence; deferred prosecution agreements; the accompanying guidance; small and medium-sized enterprises (SMEs) and the position in Scotland.

Business integrity initiative

Micro, small or medium-sized enterprises looking to do business in any country that receives Overseas Development Assistance can apply for the Business Integrity Consultancy Service - up to 5 days of match-funded, tailored guidance from a consultant on anti-corruption and human rights topics ranging from compliance with the law, prevention and risk mitigation, to collective action. Anti-corruption services are provided by the Basel Institute on Governance, and include:

• help to improve companies’ compliance with the UK Bribery Act
• detailed information on corruption risks in specific countries or sectors and assistance in developing mitigation strategies
• guidance on how to do due diligence assessments on supply chain partners

G20

On 28 and 29 June 2019, world leaders met in Osaka for the G20 Summit. Read the leaders’ declaration. The anticorruption paragraph endorses Anti-Corruption Working Group (ACWG) outputs: high level principles for the effective protection of whistleblowers and a compendium of good practices for promoting integrity and transparency in infrastructure development.

The ACWG has also endorsed a scoping exercise by relevant international organisations on the landscape of international institutions dealing with serious economic offenders and recovery of stolen assets in relation to corruption.

UN Convention against Corruption

The UK underwent a review of its compliance with the United Nations Convention against Corruption (UNCAC) in 2017/18, focusing on prevention (including money laundering) and asset recovery. An executive summary has now been published. A final report will follow in due course. Overall, we received a positive review. The executive summary outlines the significant structures, standards, measures, policies, rules and legislation we have in place to meet the requirements under the convention. The review of the UK’s compliance with UNCAC is the third positive report in a line of recent anticorruption related reviews FATF, OECD.

Crown Dependencies

On 19 June 2019 we welcomed the joint announcement by the governments of Guernsey, Jersey and the Isle of Man to implement their own publicly accessible registers of company beneficial ownership in line with EU norms. This underscores the Crown Dependencies’ continued contribution to the global fight to tackle illicit finance.

Overseas Territories

We are working with the governments of the Overseas Territories to help them implement the commitment in the 2018 Sanctions and Anti-Money Laundering Act for publicly accessible beneficial ownership registers. In week of 15 July 2019 the Foreign and Commonwealth Office (FCO) hosted a technical working group with the territories to assist them to this end and we stand ready to provide further assistance if required.

Companies House

The Department for Business, Energy and Industrial Strategy (BEIS) is consulting on new proposals to enhance the role of Companies House, increase the transparency of UK corporate entities and help combat economic crime. Proposals include enhanced checks on the accuracy of data being provided to Companies House and checking information against the data held by other organisations. The consultation seeks views on a series of reforms:

• knowing who is setting up, managing and controlling companies
• improving the accuracy and usability of data on the companies register
• protecting personal information on the register
• ensuring compliance, sharing intelligence and other measures to deter abuse of corporate entities

The consultation closes on 5 August 2019.

Statutory Review

On 27 June 2019 the Home Office published the 18-month statutory review on the exchange of notes arrangements on beneficial ownership information sharing between the UK, the Crown Dependencies and six Overseas Territories. The review highlights that these arrangements are providing UK law enforcement with rapid access to valuable information. Many of the requests support long-running UK law enforcement investigations, and it is too soon to quantify the full outcome. Nevertheless, interim indicators are positive, and the review includes examples of instances where access to this information has enabled law enforcement agencies to seize illicit funds.

Joint committee response

BEIS have published their response to the committee’s report on the draft Register of Overseas Entities Bill. The purpose of this draft bill is to crack down on the use of UK property for money laundering.

In the news

• National Crime Agency (NCA) secures unexplained wealth orders for prime London property worth tens of millions
• National Economic Crime Centre leads push to identify money laundering activity
• eight year NCA investigation results in multi-million pound asset recovery including luxury hotel and £100k Bentley
• al-Assad family cash forfeited in London court
• former company director sentenced for £12 million bribery scheme
• FH Bertling sentenced for $20m Angolan bribery scheme
• Serious Fraud Office (SFO) announces DPA in principle with Serco Geografix Ltd

What’s next?

The Ministry of Housing, Communities and Local Government (MHCLG) are due to complete their review of local government procurement risks this summer.