What will be the role of the International Corruption Unit?

The National Crime Agency (NCA) announced on 09 August 2015 that it had launched a new International Corruption Unit (ICU) to be the “central point for investigating international corruption in the UK.” Funded for up to £21m up until 2020 by the Department For International Development (DFID), the unit will adopt a multi-agency “combined intelligence and investigation approach” bringing together existing work on the part of the NCA and the Metropolitan and City of London Police.

What is the ICU’s mandate?

The ICU’s objective is to investigate:

• bribery of foreign public officials by individuals or companies from the UK, and
• money laundering by corrupt foreign officials and their associates.

In implementing those objectives Justine Greening (International Development Secretary) and Jon Benton (Joint Head of the ICU), highlighted how they consider the ICU’s work will be targeted at corruption in developing countries. To do so, the ICU will:

• trace and recover the proceeds of international corruption
• support foreign law enforcement agencies with international anti-corruption investigations
• engage with government and business to reduce the UK’s exposure to the proceeds of corruption, and
• work with business to support increased compliance with the Bribery Act 2010.

To achieve these aims, the ICU has drawn from existing experienced teams. Both the Metropolitan Police and the City of London Police have had dedicated DFID-funded units since 2006 - the Proceeds of Corruption Unit (POCU) and the Overseas Anti-Corruption Unit (OACU), respectively. With a track record including 150 investigations of overseas bribery, £200m recovered in stolen assets and 27 successful individual prosecutions since 2006, they have joined with the NCA’s International Corruption Intelligence Cell (ICIC). ICIC previously had a “tactical focus” on gathering intelligence on politically exposed persons abusing financial systems in the UK to share with its “investigative partners."

How will the ICU work with other agencies?

Both the City of London Police and the NCA are signatories to the inter-agency Memorandum of Understanding of April 2015 governing any “alleged or reported case of foreign bribery with a link to the United Kingdom”. The MoU contains a cascade system for assessing which agency is best placed to take responsibility for new leads, and given that both the OACU and ICIC were built into that waterfall it seems likely we can expect clarification on how the new, composite, ICU will fit into the amended structure when the next annual update is published. Under the current form of MoU, it is clear that the SFO is the first port of call. Any new cases are assessed both for sufficiency of evidence and against its Statement of Principles - it is only if the SFO decides to refer the case elsewhere that the other agencies have a remit to act.

Statements made by ICU Joint Head Jon Benton since its establishment may indicate that the ICU was seeking to challenge the SFO’s role by bringing the first major Bribery Act prosecution - “Well, 25% of our work is investigating offences that we suspect are under the UK Bribery Act,” said Benton at the Cambridge International Symposium on Economic Crime on 10 September 2015, “So watch this space.” Some will recall that this time last year Theresa May was said to have revived plans to abolish the SFO - Benton’s comments may lead to further speculation that the organisation’s status as lead agency for investigating foreign bribery by businesses within the UK is under fresh threat.

However, the SFO’s future would now seem much more secure, following recent successes including the approval of the first ever Deferred Prosecution Agreement with ICBC Standard Bank ICBC Standard Bank (formerly Standard Bank Plc) and the announcement that following its investigation into Sweett Group PLC, the group has admitted an offence under Section 7 of the Bribery Act 2010.

Focus on the UK property market

In the meantime, Jon Benton has also been indicating that the ICU may take a particular focus on the flow into the UK’s property market of “dirty money”, and that it will seek to do so by establishing joint operations with authorities in other jurisdictions such as the US and Switzerland.

This statement of intent closely aligns with recent high profile Transparency International initiatives, notably:

• The campaign to capture beneficial ownership of UK properties through the Land Registry to address the number of London properties registered to offshore corporates, which the Prime Minister has indicated he will support.
• Calls for reform of the suspicious activity reporting (SAR) system after findings that a mere seven financial transactions (worth a combined total of £115m) were blocked as a result of SARs in 2014 with estate agents contributing only 0.05% of all SARs submitted in 2013-2014.
• Proposals for Unexplained Wealth Orders (UWOs) to mirror measures in place in Iceland, Australia and Colombia that were recently given public backing by the government’s Anti-Corruption Champion, Eric Pickles.

Against that background, the ICU may be seen by some to be responding to pressure to take a harder look at the domestic property industry, amid fears that the UK market is being used as “a safe haven for corrupt money”. In the past, Benton’s unit has contributed to success in prosecuting figures such as James Ibori, the former corrupt Nigerian politician, who reportedly stole an estimated $250m from the Nigerian state to fund, among other things, luxury homes in the UK, US and South Africa.

Further powers?

It is not yet clear how these areas of focus might affect ICU investigations of the future - and how the unit will maximise the potential of its combined expertise. In particular, and in light of the proposals above, it will be interesting to see what legislative tools the ICU may have at its disposal in implementing its objectives. The ICU has already begun to put its powers into action - on 02 October 2015 it announced that it had made its first arrest, in respect of five unnamed individuals, as part of an investigation that had commenced in 2013 into “suspected bribery and money laundering offences.” Whilst the ICU has not identified the individuals, reports in the press (confirmed by a spokesperson for the Nigerian presidency) are that among them was Diezani Allison Madueke, the former Nigerian Oil Minister and a former president of the Organization of Petroleum Exporting Countries (OPEC). No further details have been officially released by the ICU, but those in all sectors will be keeping a keen eye out for how the ICU’s current powers are exercised during this investigation and others as to any clues that may emerge on legislative proposals for further powers.