Diplomats intervene over graft complaints

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Government officials have intervened on behalf of UK companies operating in the Middle East and former Soviet Union that feel disadvantaged by local corruption while being bound by the UK’s strict anti-graft laws.

Six businesses operating in the Gulf states and ex-Soviet Union have complained to their local embassies about corruption since the UK Bribery Act was passed in 2010, with four cases leading to official interventions and lobbying by diplomats to their counterparts in public authorities and governments, according to data from a Freedom of Information Act request to UK Trade & Investment, the government body that promotes British business.

“Large corporates often have enough muscle to intervene with foreign governments on their own behalf. However, smaller businesses exporting into foreign markets simply don’t have the clout and need the government to help,” said Barry Vitou, a partner at Pinsent Masons, who requested the data.

The Bribery Act came into force in July last year and overhauled the UK’s antiquated graft laws. It gives the Serious Fraud Office unprecedented reach by handing it the power to prosecute a company, or a person associated with it, with any sort of link to the UK, no matter where it is based or where the bribery takes place.

Individuals face up to 10 years in prison and companies an unlimited fine. For the latter, one of the biggest threats is exclusion from public works if they are convicted of corruption.

Ken Clarke, justice secretary at the time, promised the act would give UK businesses “clarity and a level playing field, helping to align trading nations around decent standards”.

But businesses caught by the act worried that they would be disadvantaged in overseas markets where bribery is commonplace.

The statistics come as the SFO has taken on high-profile corruption cases with links to the Middle East: it is investigating payments made by Barclays to Qatar Holding as part of the bank’s Middle Eastern cash call in 2008.

The SFO also decided to launch a criminal investigation into GPT Special Project Management, a subsidiary of EADS whose sole client is the Ministry of Defence. A whistleblower at GPT flagged irregular payments to Saudi officials. EADS is in merger talks with BAE Systems, which the SFO infamously investigated over Saudi arms deals. It eventually prosecuted the company on one count of false accounting relating to Tanzania in 2010

The SFO is also prosecuting Victor Dahdaleh and accuses him of bribing a senior member of the Bahraini royal family to win aluminium contracts. Mr Dahdaleh denies the charges and goes on trial next year.

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