Serious Fraud Office Investigation of UK-Saudi Arabia Arms Deal

Statement by Transparency International (UK)

TI(UK) is greatly concerned by the decision of the Serious Fraud Office (SFO) to terminate the investigation into the affairs of BAE Systems plc as they relate to the UK-Saudi Al Yamamah arms deal. The SFO stated that it had been necessary to balance the need to maintain the rule of law against the wider public interest. It is worrying that the Government should see a conflict between the two.

The Attorney General (AG) referred to Article 5 of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which precludes investigations and prosecutions being influenced by considerations of national economic interest or the potential effect upon relations with another State. Although he claimed that the SFO had not been influenced by those considerations, the remainder of the AG’s statement and the Prime Minister’s statement today would suggest otherwise.

TI(UK) of course takes no view on the likely outcome of the investigation and notes that the company has throughout denied any wrongdoing. It is the pressure applied to the SFO prematurely to terminate an investigation that has been diligently pursued by a large SFO and MOD Police team for over two years that is worrying. By terminating the investigation rather than allowing it to be completed, the AG has relieved himself of the duty of deciding whether or not to prosecute.

The termination of the SFO’s investigation calls into serious question the Government’s commitment to enforce the OECD Convention, a factor that the OECD will not fail to notice when the UK responds in writing in March next year to the critical report on the UK’s poor compliance with the Convention.

Nor will it have assisted the credibility of the UK’s position at the first Conference of States Parties to the UN Convention against Corruption that finished yesterday in Jordan.

Since this decision has been taken in the wider public interest, the Government has a duty to explain in far greater detail how the public interest was endangered by the continuation of the SFO’s criminal investigation.

“Sadly, the Government’s decision conveys a disturbing message: while other countries are expected to observe their obligations under international anti-corruption conventions, the UK reserves the right to ignore its obligations when this is politically expedient. It will be hard to dispel the perception that this constitutes a double standard”, said Laurence Cockcroft, Chairman, TI(UK).