By Suzi Ring, Bloomberg News
A proposal to toughen U.K. laws to make it easier to hold companies accountable for financial crime is still under consideration by the government after years of back and forth, according to a speech from the solicitor general.
“The weaknesses in our current law result in other jurisdictions holding British companies to account when ours has not,” Robert Buckland said Monday at a conference in Cambridge, England. “The government completed its call for evidence on corporate criminal liability” laws and is now considering the submissions.
Buckland’s comments at the Cambridge International Symposium on Economic Crime come one year after the attorney general told the same conference the government had resurrected a proposal to make it an offense for companies to fail to prevent economic crimes such as fraud and money laundering. The move marked a U-turn from a year earlier when the government abandoned the initiative, claiming there was “little evidence of corporate economic wrongdoing going unpunished.”
Prosecutors and anti-corruption lobbyists have pressed the government to widen U.K. corporate liability laws to make them more akin to the U.S., where companies are more directly responsible for workers’ actions. Under current U.K. laws, a company can only be charged if prosecutors can demonstrate senior executives — or the so-called controlling mind — of a company were involved.
The change would give law enforcement agencies a more complete suite of powers after the U.K. made companies responsible for failing to prevent bribery in 2011, and a new criminal offense of corporate failure to prevent tax evasion is about to come into force.
“Our current system of limited corporate liability incentivizes a company’s board to distance itself from the company’s operations,” Buckland told the audience of global prosecutors and defense lawyers. This “has made it difficult to attribute criminal liability to large corporations.”
Buckland praised the work of the Crown Prosecution Service and Serious Fraud Office, which he oversees, citing the SFO’s recent charges against Barclays Plc and four of its former executives as an example of the U.K. response to allegations of economic crime.
SFO Director David Green told the audience in his final speech at the symposium before he steps down in April that he’d been “banging on for six years” about the need to extend corporate criminal liability.
“It is surely right that the U.K. should lead enforcement in relation to U.K. companies” and companies with business here, Green said. “If we take our foot off the pedal in relation to corporate crime and commercial bribery others will fill the void.”
The SFO was threatened with closure this year by Prime Minister Theresa May, who pledged in the Conservative Party election manifesto to subsume the prosecutor into the National Crime Agency.
May acted amid a wide-ranging government review of Britain’s economic crime agencies. The prime minister said in a letter to Treasury Committee Chairman Nicky Morgan last month that feedback from the review would be discussed with ministers by the end of the summer.
For more news, visit Bloomberg.