This brief outlines the issues involved with corporate economic crime and the measures taken, principally to reduce bribery and corruption..Jump to full report >>
Corporate economic crime
Corporate economic crime is a complex subject on many levels and efforts at strict definitional exactitude rapidly become self-defeating. Most obviously, companies cannot do anything – people commit criminal acts. The problem at the heart of this subject is how, and when, to separate the company from the individual and, very often, to ask if it is actually possible to decide who, amongst the management or board, was responsible for the act or acts complained of.
A commonly held view is that too few people are prosecuted for corporate failings. This was exemplified in the financial crash when regulators found little ground on which to bring charges against people for failed banks. New measures in financial services legislation – the senior managers’ regime - allow greater identification of individuals with corporate failure.
There has been a new focus on bribery and corruption in the UK and in the wider world. The World Bank has estimated that corruption adds up to 10% to business costs globally and according to the Organisation for Economic Co-operation and Development, corruption costs around 5% of global GDP every year.
The UK hosted a major international anti-corruption summit in 2016. This and other initiatives have been recognised by the OECD as evidence that the “UK has made strong progress fighting foreign bribery”.
The use of the Bribery Act has resulted in successful prosecutions, with more likely to follow, and the first use of the deferred prosecution agreement procedures.
Commons Briefing papers CBP-7359
Author: Tim Edmonds