Bereavement damages: an award or an insult?
The UK Government has recently published its response to the International Development Committee (‘IDC’) report on tackling overseas corruption. While it agrees with most of the 13 recommendations, it has only partially agreed with four, and outright disagreed with two. So what does this mean for UK efforts to tackle corruption in 2017?
Summarised below are the agreed recommendations, which indicate what we can expect to see on the government anti-corruption agenda for 2017.
Areas of disagreement
In a previous blog entitled Tackling overseas corruption - MPs ask questions of Government approach, Caroline Day questioned what position the government would take with regards to beneficial ownership and tax havens, and whether it would adopt a longer term approach to addressing corruption. The Committee made recommendations on both of these points.
For instance, Recommendation 2 encouraged the government to lobby OTCDs to create a public beneficial ownership register. This is obviously a bone of contention for the government who have so far resisted calls to impose a time limit for OTCDs to establish such a public register through the Criminal Finances Bill. Accordingly, the DFID disagreed with the Committee’s assessment. It found instead that the commitment made by OTCDs to construct registers of beneficial ownership information “or similarly effective systems” that provided law enforcement authorities in the UK “rapid access” would still put them “ahead of many…major international partners”.
With regards to timescale, Recommendation 8 made the case for a ten year anti-corruption strategy that could adapt to the political and economic environment while ensuring a long-term financial and institutional commitment. Such an initiative would inevitably encounter problems presented by the five year political cycle, and while the government agreed in principle that tackling corruption was a long-term endeavour, any lengthy strategy should be underpinned by “a flexible and politically astute approach”. It suggested instead that the DFID develop “rolling strategies with a 10 year horizon but with a shorter term detailed programme and influencing agendas”.
Transparency in anti-corruption measures appeared again in Recommendation 3, which held that the Finance Act 2016 did not go far enough in committing the Government to publish country by country reporting of multinationals’ (‘MNEs’) profits and payments. As with Recommendation 2 above, the Government maintained that their efforts to initiate country by country reporting to the OECD were sufficient to ensure that information on the activities, profits and taxes of MNEs was available and would even assist developing countries in assessing tax avoidance risks. Public reporting, the Government argued, could only be effective if implemented on a “multilateral basis”, and while it would support any measures to ensure such an arrangement, it could not yet lead the way on public country by country reporting.
Further disagreements arose in respect of the Committee’s recommendations that the government appoint an anti-corruption champion from the Cabinet (Recommendation 5); reconsider the OECD as the forum for discussions and decisions on international tax matters (Recommendation 6); and publish its anti-corruption strategies, overdue internal review and individual country plans as a matter of urgency (Recommendation 9). In respect of 5, the Government upheld their current appointment of Sir Eric Pickles (a non-cabinet member) on the basis that his role was clearly defined, and that Cabinet ministers including the Chancellor, the Secretary of State for International Development, and the Minister for the Cabinet Office would share these responsibilities. Contrary to Recommendation 6, the Government persisted in viewing the OECD as the optimum forum for anti-corruption strategies not least because of the considerable investment and attention it has received through recent initiatives. While agreeing to publish the necessary documents under Recommendation 9, the Government was unable to respond to the issue of urgency, or offer a timescale for this publication.
It is encouraging that the Government has agreed with the majority of recommendations made by the Committee. However on closer look, many are uncontroversial involving the Governments “continued” action and on going commitment to schemes and initiatives already in place and already agreed.
Thematically, the areas in which the Government appear to disagree with the Committee are where legislation or policy is recommended to compel the publication of information. For example, the Government response to Recommendation 2 falls short of requiring OTCD’s to publish their registers of beneficial ownership. While there are undoubtedly implications for requiring these registers to be made widely available (eg. disincentivising OTCDs to cooperate with anti-corruption measures or to force any tax avoidance activity to become more clandestine), those in favour of publication may consider the need for transparency, and the accessibility of such information for all rather than an elite few as important principles. The same case could be made regarding the publication of country by country reporting (Recommendation 3).
The 13 Recommendations may feel unlucky for some as a result of the renewed focus on regulation. However, it is helpful to see a glimpse of what anti-corruption measures we can expect in 2017.
Skip to content Home About Us Insights Services Contact Accessibility