This year has been a whirlwind on the anti-corruption front. From integrity issues bringing down a Prime Minister in July, to the UK finally getting to grips with its Londongrad problem by introducing not one but two economic crime bills in light of Russia’s invasion of Ukraine. It is particularly welcome to see Security Minister Tom Tugendhat this morning declare that Londongrad is closed and that 2023 will be the year that the UK will make the fight against corruption count.
Other welcome developments are real political commitment to a new law to make it harder for wealthy people to suppress investigative reporting here using the UK’s highly problematic defamation rules and laws – so-called SLAPPs. And the £10 million put towards the NCA’s new Counter-Kleptocracy cell appears to be bearing real fruit with two sanctioned Russian oligarchs facing court action.
One step forward, two steps back?
While those in government responsible for tackling corruption are clearly serious about implementing new anti-corruption measures on the one hand, there is a real danger that other parts of government risk undermining the fight against corruption on the other.
There are three key challenges to the government being able to make corruption count in 2023:
1. The return of “light touch” regulation risks undermining the UK’s economic crime fighting agenda
As ministers celebrated international anti-corruption day and the UK introduced a new (though rather minimal) round of anti-corruption sanctions, the Chancellor was laying out a wide-ranging regulatory reform agenda which could make the UK a riskier place to do business.
We know from the Intelligence and Security Committee’s report on Russia, that the promotion of a “light and limited touch to regulation” was a crucial driver in the creation of Londongrad in the first place. A re-run of light touch regulation risks sending a message to the world that Britain is still very much open for business from whatever source. Increased money laundering risks from this approach are not theoretical. The IMF warned earlier this year, financial flows from the top 5 high-risk jurisdictions for money laundering (the UAE, Pakistan, China, Russia and Hong Kong) have actually increased – in some cases doubled – since 2016.
2. Lack of action on UK domestic integrity risks undermining the government’s credibility:
The UK’s failure to get its own house in order risks our ability to hold sway on the international stage. This was most dramatically illustrated by Boris Johnson having to defend the UK against allegations of being a corrupt country when the UK hosted the COP 26 conference to tackle climate change.
It is over a year since the UK’s top ethics advisory body, the Committee on Standards in Public Life (CSPL), issued a comprehensive list of 34 recommendations to strengthen the regime for making sure senior politicians and officials behave with integrity. The government has yet to issue a full response to this, or the recommendations Nigel Boardman made following his report into the Greensill scandal 18 months ago.
Taking an immediate step of strengthening the role of the Independent Advisor on Ministerial interests would be an important first step, but the government should be looking to urgently implement the CSPL recommendations (recently echoed by Parliament’s Public Administration and Constitutional Affairs Committee), to make standards regulators properly independent by putting them on a statutory footing and giving them more powers.
3. Privacy risks becoming the new tool of kleptocracy to hide its tracks
The devastating judgment from the European Court of Justice that registers for beneficial owners of companies should not be open to the public on privacy grounds has opened a new front for secrecy that is likely to have a deeply chilling effect on the fight against corruption globally over the next few years.
Already in the UK we are seeing the use of privacy arguments to suppress publication of information heard in the courts, and even to suppress information being heard openly in the courts. The UK Supreme Court judgment in February this year limiting reporting of information relating to the investigation of those suspected of involvement in corruption is already casting a long shadow over the willingness of media organisations to investigate and publish material on shady characters.
Hard work lies ahead
It is a truism that whatever new measures you put in place, criminals and bad actors will find new ways around them. But these are several things that those in government serious about tackling corruption will need to keep on their toes about.
On this particular International Anti-Corruption Day, while we should welcome that we have come a long way in the last 12 months, there is much to do to make 2023 a truly transformative year for anti-corruption efforts in the UK and around the world.