Submissions

Written Evidence

Consultation on transforming public procurement: March 2021

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Recommendations:

1. The government should implement a robust national procurement strategy which draws on international best practice, including with the introduction of a False Claims Act, and legally enforceable codes of conduct for suppliers.

2. The government should establish an independent procurement Ombudsman with powers to intervene where necessary to ensure contracting authorities and suppliers comply with the new framework.

3. The government should commit to transparency by default throughout the procurement cycle, and ensure that public contractors are subject to the Freedom of Information Act.

4. A fair dispute resolution should be established, and a new procurement Tribunal with specialised procurement judges to hear legal challenges, with the right of non-parties bringing procurement challenges on public interest grounds enshrined.

5. The government should ensure that the exclusion regime is as effective as possible, by ensuring that convictions for fraud as well as failure to prevent bribery and tax evasion are grounds for mandatory exclusion from procurement subject to self-cleaning. The central debarment list and properly resourced centralised function for assessing exclusion decisions, ensuring they are applied on a cross-government basis, and for assessing whether a company has self-cleaned are essential to protect the integrity of public contracting.

Future of Financial Services Inquiry: February 2021

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Recommendations:

1. Promoting competitiveness should remain as the responsibility of the government with parliament’s oversight while regulators’ mandate should retain its focus on ensuring the integrity of markets and consumer protection.

2. Regulators’ mandate should be extended to include a commitment to protect and promote the public interest.

3. An independent oversight body dedicated to monitoring the financial services regulators’ activities should be established to enhance democratic accountability.

4. A specialist parliamentary select committee focused on financial services regulation should be established to provide an additional level of parliamentary scrutiny.

5. Responsibility for handling and protecting whistleblowers should be transferred to the new independent oversight body.

6. There should be much greater transparency and stakeholder participation in the development of policy by financial services regulators, including through the creation of citizen panels.

 

Consultation on the Future Regulatory Framework for Financial Services: February 2021

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Recommendations:

1. Promoting competitiveness should remain as the responsibility of the government with parliament’s oversight while regulators’ mandate should retain its focus on ensuring the integrity of markets and consumer protection.

2. Regulators’ mandate should be extended to include a commitment to protect and promote the public interest.

3. An independent oversight body dedicated to monitoring the financial services regulators’ activities should be established to enhance democratic accountability.

4. A specialist parliamentary select committee focused on financial services regulation should be established to provide an additional level of parliamentary scrutiny.

5. Responsibility for handling and protecting whistleblowers should be transferred to the new independent oversight body.

6. There should be much greater transparency and stakeholder participation in the development of policy by financial services regulators, including through the creation of citizen panels.

Companies House consultation on ‘Corporate transparency and register reform: powers of the registrar’: January 2021

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Recommendations:

1. Risk-based approach to querying data must be based on a sufficiently wide scope of risk indicators and updated continually in light of emerging threats.

2. Companies House must be given new resources to query records and intervene where necessary including expanding the number of forensic accountants to monitor increasingly complex fraud risks.

3. Annotation and removal of documents would help the public to navigate risks and promote overalln compliance.

Committee on Standards in Public Life Consultation, Standards 2: January 2021

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Recommendations:

1. We recommend that the Committee on Standards in Public Life conduct a review, building on this consultation, into which of the institutions regulating ethical standards should be consolidated into an independent, transparent, accountable statutory regulator, with the remit, powers and resources to properly regulate ethical standards and hold people with top executive functions and other public officials to account.

2. Our preference would be for the Advisory Committee on Business Appointments and the Independent Adviser on Ministers’ Interests – and potentially other institutions, subject to the Committee on Standards in Public Life review – to be replaced with an independent Ethics Commission; and for this Commission to oversee and enforce enhanced, statutory codes of conduct for ministers and special advisers, and post-employment rules for senior civil servants.

3. We recommend that both the Ministerial Code and the Code of Conduct for Special Advisers be enhanced to improve their effectiveness, enabling ministers and special advisers to be investigated and suitable sanctions imposed by an independent Ethics Commission, and that the revised statutory codes – covering conflicts of interest, lobbying, financial disclosures and post-employment rules – be overseen by an independent Ethics Commission.

Treasury Committee Inquiry into Economic Crime: December 2020

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Recommendations

1. The immediate introduction of a failure to prevent economic crime offence to complement the current Law Commission review into the identification doctrine.

2. An urgent amendment to the costs regime for public authorities bringing Unexplained Wealth Orders (UWOs) under the Criminal Finances Act 2017 (CFA);

3. Amendments to the CFA to ensure UWOs can effectively be used where property is held by trusts or by those who are not the ultimate beneficial owner.

4. Consideration be given to putting Property Freezing Orders (PFO) on an evidential par with Account Freezing Orders (AFO).

5. Consideration of an individual failure to prevent economic crime offence for seniormanagers in the event that a company is found guilty of such an offence, or enters into a Deferred Prosecution Agreement (DPA).

6. The introduction of a power for prosecutors to apply to courts for directordisqualification orders (DDOs) for directors where a company is convicted or enters into a DPA.

 

LACK OF CONSISTENCY IN ANTI-MONEY LAUNDERING SUPERVISION

Spotlight on Corruption has real concerns about the ongoing issues with the consistency of anti-money laundering (AML) supervision, including low rates of criminal and regulatory enforcement in relation to AML violations.

Recommendations

Spotlight on Corruption recommends that an independent expert review of the effectiveness of the UK’s supervision and criminal enforcement for AML is commissioned by the government in March 2021. This review should look at:

– Whether the government has achieved its stated goal of enhancing AML supervision as outlined in the Economic Crime Plan.

– How the UK performs against international best practice on AML supervision

– Whether the current Professional Body Supervisor (PBS) model is working or needs to be replaced with a more effective and robust model of supervision

– Whether the PBSs are effectively referring suspicions of money laundering to law enforcement and whether law enforcement is appropriately responding to suchsuspicions.

– The factors behind the low rates of supervisory and criminal enforcement for money laundering in the UK.

This review should be undertaken with stakeholder participation, and be published in a timely fashion and prior to the government undertaking the review of the Money Laundering Regulations (MLR) and Office of Professional Body Anti-Money Laundering Supervision (OPBAS) regulations which it has committed to do by June 2022.

 

C.ECONOMIC CRIME ENFORCEMENT RESOURCING

Spotlight on Corruption is concerned that the ongoing uncertainty and insufficiency ofresourcing for tackling money laundering and economic crime creates an inequality of arms between law enforcement bodies and those who commit economic crime.

Recommendations

Spotlight on Corruption recommends that a full analysis of law enforcement fundingneeds for economic crime be developed for the next multi-year spending review and that there is transparency about this analysis. Any analysis of funding needs must take intoaccount.

– New resources needed for adequate enforcement of the sanctions regime.

– New resources needed to respond to the fraud crisis created by COVID-19.

– New resources that might be required as a result of the UK losing access to EU-wide security tools and databases at the end of the EU transition period.

– The need to enhance recruitment and retention of relevant staff from financial investigators to top prosecutors, including pay levels needed to ensure this.

– The huge disparity in what law enforcement bodies can pay for legal advice from counsel compared to what defendants pay for such advice.

Public Bill Committee on the Financial Services Bill: November 2020

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Spotlight on Corruption is calling for an amendment to the Financial Services Bill that would introduce a criminal offence for failing to prevent economic crime, with particular reference to fraud, money laundering and false accounting.

Rationale

1. We believe that there are several important reasons for the urgent introduction of a failure to prevent economic crime offence as outlined in this amendment. These reasons are:

2. To promote strong corporate governance and deter wrongdoing in the financial sector after the UK leaves the EU (protection of market integrity);

3. To create a level playing field for how large and small companies are held to account for economic crime, particularly in response to the burgeoning fraud crisis resulting from COVID-19 (fairness);

4. To ensure that the UK does not fall behind international standards on prosecuting economic crime (equivalence); and

5. To create a level playing field on how liability is attached to companies across different economic crimes within the UK (consistency).

International Trade Committee Consultation on UK Export Finance: September 2020

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Recommendations

1. UKEF’s revised anti-corruption policies should be published along with an annual overview of its anti-corruption work.

2. UKEF’s remit for combatting corruption should be revised in line with the Bribery Act and the publication of the UK’s Anti-Corruption Strategy to provide a specific mandate to prevent bribery.

3. Strengthen its anti-corruption procedures by: ensuring there are appropriate sanctions where anti-bribery warranties are breached; referring suspicious activity promptly to law enforcement bodies; denying support where companies do not have anti-corruption procedures in place and where they do not cooperate with law enforcement investigations fully; and making greater use of its audit powers.

4. Continue to promote best practice at the OECD for export credit agencies, including pushing for a robust review mechanism, and an intelligence sharing mechanism between ECAs on corrupt actors.

Committee on Standards in Public Life Consultation on Electoral Regulation: August 2020

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Recommendations

1. The government should implement a robust national procurement strategy which draws on international best practice, including with the introduction of a False Claims Act, and legally enforceable codes of conduct for suppliers.

2. The government should establish an independent procurement Ombudsman with powers to intervene where necessary to ensure contracting authorities and suppliers comply with the new framework.

3. The government should commit to transparency by default throughout the procurement cycle, and ensure that public contractors are subject to the Freedom of Information Act.

4. A fair dispute resolution should be established, and a new procurement Tribunal with specialised procurement judges to hear legal challenges, with the right of non-parties bringing procurement challenges on public interest grounds enshrined.

5. The government should ensure that the exclusion regime is as effective as possible, by ensuring that convictions for fraud as well as failure to prevent bribery and tax evasion are grounds for mandatory exclusion from procurement subject to self-cleaning. The central debarment list and properly resourced centralised function for assessing exclusion decisions, ensuring they are applied on a cross-government basis, and for assessing whether a company has self-cleaned are essential to protect the integrity of public contracting.

House of Lords Constitution Committee Inquiry into the Constitutional Implications of Covid-19: August 2020

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Recommendations

1. Serious consideration should be given to rolling out virtual technology for hearings that relate to pre-trial and procedural issues as the norm in both civiland criminal jurisdictions.

2. The Lord Chief Justice and Lord Chancellor should review urgently how openjustice in criminal cases can be more effectively protected, including by giving consideration to making an order under Section 32 of the Crime and Courts Act to allow courts to provide remote access to the public, subject to safeguards.

3. Serious consideration should be given to publication of transcripts ofjudgements handed down orally and sentencing remarks both during the Pandemic and long-term. The judiciary and HMCTS should be working towardscomprehensive publication of all such judgements in England and Wales.

4. Listing data should make clear that members of the public as well as media are able to attend remote hearings.

5. Evaluation should be undertaken and statistics kept on the number of casesthat have been heard in private during COVID-19, both under the CPR 39.2(3) and existing Civil Procedure Rules, to assess whether remote hearings have had an impact on application of privacy orders.

6. The proposed Virtual Fraud Court should be implemented speedily to ensure that fraud and other economic crime cases can be managed effectively.

7. Given the potential huge increase in economic crime as a result of COVID-19,urgent consideration should be given to creating a ‘ticket’ for judges to workon economic crime, ensuring judicial training and expert support in this area

Oral Evidence

Executive Director, Dr Susan Hawley, evidence to the Public Bill Committee on the Financial Services Bill: November 2020