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Business needs to see concrete action on corruption from today's summit, says expert

Out-Law Analysis | 12 May 2016 | 10:00 am | 2 min. read

FOCUS: Business wants a level playing field without competition distorted by corruption – and corporates exposing corruption should be given immunity.

Measures to encourage businesses and whistleblowers to self-report corruption, and more funding for and better cooperation between law enforcement agencies, must also emerge from today's historic anti-corruption summit, if world leaders are to truly "break the cycle of corruption".

In light of recent scandals, particularly the increased global focus on corruption following last month's 'Panama Papers' leak, the London 2016 Anti-Corruption Summit must not be a mere talking shop. Formal, concrete policies to tackle corruption across the board must be agreed - as well as the practical steps needed to implement them.

It is crucial that ethical businesses that seek to compete fairly are not disadvantaged by those that engage in corrupt behaviour, such as seeking to pay bribes to win contracts and favour. There are five areas in particular in which concerted action by world leaders can really make a difference.

Immunity from prosecution for businesses that 'self-report' corruption

There must be a clear, demonstrable financial benefit to companies that take the bold step of self-reporting and entering into a deferred prosecution agreement (DPA).

Introduced in the UK in 2014, DPAs allow businesses which admit to involvement in corporate crime the possibility of avoiding a prosecution. Strict conditions agreed by a judge need to be met, and any proposed fines paid. The Serious Fraud Office (SFO) secured its first DPA in November 2015.

However, the UK rules could be improved, following in the footsteps of the US where there have been recent moves to incentivise companies to self-report in order that the particular individuals responsible for corruption can be brought to book. Currently, when UK judges follow general sentencing principles, the fines paid under DPAs are the same as a judge might order if a company is prosecuted.

Cash incentives for whistleblowers - to be paid for from fines and penalties

Increased support and incentives for whistleblowers in the UK, and in many other countries worldwide, is long overdue. World leaders need to work much harder to create a system in which those who witness wrongdoing feel comfortable coming forward, and know that they will be rewarded and financially secure rather than victimised for their assistance.

Arguments that incentivised whistleblowing is incompatible with the UK culture of fairness ring hollow - in the US, most non-US applicants under the Dodd Frank Whistleblower programme come from the UK.

An anti-money laundering system focused on genuine risks, and backed by technology

Put simply, the current anti-money laundering regime in the UK is unfit for purpose. The law must be updated to re-focus on the highest risk entities, and systems upgraded to deal with vast quantities of data.

Proposed reforms to the Suspicious Activity reports regime and better international cooperation will be vital here, as well as better technology - using algorithms to sort through vast quantities of data and sort the wheat from the chaff.

Increased funding

In the UK, the bodies involved with fighting corruption and other economic crimes have been chronically under-funded for many years. Corrupt businesses and bribe seekers have no such limits on their activities.

Business' position is clear. They want a level playing field on which to compete, and law enforcement agencies which are well-resourced enough to tackle corruption and white collar crime effectively.

Inter-governmental cooperation

Finally, the summit must focus on how inter-governmental cooperation can be improved. The UK's Foreign and Commonwealth Office (FCO), which has like many government departments been subjected to swinging budget cuts, should be better funded to take the fight to corruption - and should take a higher profile role in protecting UK businesses from corruption overseas.

Barry Vitou is an anti-corruption and economic crime expert at Pinsent Masons, the law firm behind Out-Law.com