TI (UK) regrets the end of the judicial review in relation to Al Yamamah contract

Issued by Transparency International UK

Transparency International (UK) regrets the House of Lords' rejection of the April 2008 Divisional Court judgment on the application of Corner House and Campaign Against Arms Trade. This questioned the legality of the December 2006 decision to discontinue the criminal investigation of British Aerospace Systems (BAES) in relation to the Al Yamamah contract in Saudi Arabia.

The 2006 decision to stop the criminal investigation raised acute concerns over the United Kingdom’s international obligation to combat corruption. The obvious conclusion was that the UK Government was willing to ignore its commitments for undisclosed and questionable reasons. The Court held that the SFO Director was wrong to discontinue the criminal investigation, and criticised the Government for its abject failure to resist the supposed threat to UK interests which prompted that decision. The House of Lords has reversed this, saying the Director had no need to question the supposed threat to public safety claimed by the then British Ambassador to Saudi Arabia.

"The implications of the House of Lords ruling are very serious", TI(UK)'s Chairman, Laurence Cockcroft, claimed today. "Although they say this case was exceptional, the fact is that any bribery of a senior foreign government official will invoke similar intense objection from the official concerned." The Law Lords' ruling means that the SFO Director or other prosecutor need not question the credibility of an improper threat passed on by an ambassador.

Even more serious is the finding that the SFO Director was entitled to ignore Article 5 of the OECD Anti-Bribery Convention which stipulates that the investigation and prosecution of foreign bribery shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved. UK courts will now do nothing to give effect to the UK's international obligations unless a UK statute has been passed to 'incorporate' those obligations into UK law. TI(UK)'s primary concern is the effectiveness of UK ratification of a host of important treaties to fight bribery; but the implications go much wider.

The ruling placed the burden for finding that the UK's conduct breached Article 5 of the OECD Convention squarely on the Working Group on Bribery set up under the Convention. The Working Group conducted a detailed review of the UK's conduct in April 2008. The House of Lords decision leaves the Working Group little option but to find that the Convention was breached by the UK. If they do not, they will allow any State to evade its obligations on grounds over which other States have no control. If they find that the UK did breach the Convention, the question of sanctions against UK companies will have to be addressed.

"The hope that our Courts might rescue the credibility of the Government's duty to fight corruption has evaporated", added Cockcroft. Anticipating an adverse decision, the Government had included in the Constitution Renewal Bill a clause allowing any minister without scrutiny to stop a prosecution 'in the interests of national security'. It is to be hoped that the Government will now abandon this, as the House of Lords has effectively sanctioned such conduct.

It will be interesting to see whether the Government treats this ruling as justifying the withholding of assistance to the US Department of Justice that is dealing with the parallel case involving BAES under the Foreign Corrupt Practices Act. The UK's record on responding to requests for legal assistance has been poor for years, not merely in corruption cases. "If the UK won't help others", said Chandrashekhar Krishnan, TI(UK)'s Executive Director, "it is hard to see why they should help us in prosecutions here. The international fight against corruption has suffered a serious blow today."

House of Lords Judgement

Legal Analysis:
Is there an implicit exception for national security under the OECD Convention?

For any press enquiries please contact

Laurence Cockcroft – Chairman
T: 07980 225219
E: .(JavaScript must be enabled to view this email address)

Chandrashekhar Krishnan – Executive Director
T: 07816 311070
E: .(JavaScript must be enabled to view this email address)


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