Strengthened procedures to minimise the risk of bribery and corruption on business deals supported by the Export Credits Guarantee Department (ECGD) will come into force on 1 May 2004.

The measures - which aim to deter illegal payments to win overseas contracts, corrupt practices and also money laundering - underline ECGD’s continued commitment to combat bribery and corruption, and keep it at the forefront of international efforts within the Organisation for Economic Cooperation and Development.

They build on the significant strides made by ECGD in 2000 when it strengthened its anti-corruption measures to reflect international best practice.

They follow a further review of procedures required by Ministers in recent months.

Mike O’Brien, Minister for Trade, said: “These new measures ensure that the Government continues to play its part in rooting out wrong-doing in international business transactions.

“ECGD is at the forefront of Export Credit Agencies which are keen to eliminate unethical and illegal practices. But this further package of measures means the Department is being even more effective.”

And he added: “Bribery is not only wrong, it is bad for business. A culture of corruption is a disincentive to trade and investment and payment of bribes just makes the corrupt officials worse.

“This is a balanced package. It will be to the ultimate benefit of all UK companies.”

Under the new measures on bribery and corruption coming into force next month, ECGD will:

• Obtain additional information from applicants to ensure that no improper payments involving agents have been made to win contracts;
• Have greater rights to inspect exporters’ documents relating to winning contracts and any payments made to agents;
• Require applicants to provide ECGD with a copy of their Codes of Conduct if they have one, and to sign a declaration that they will not engage in corrupt activity and will take action against anyone found guilty of such;
• Applicants must also show that they have procedures in place to prevent corrupt activity and monitor compliance with their Codes of Conduct (or similar procedures);
• Extend the range of various declarations regarding corruption to include affiliates – i.e. any company which is a member of the same group of companies, or that is a party to any joint venture or consortium, as well as directors and employees in those companies;
• Require applicants to warrant that neither they nor, to the best of their knowledge, their affiliates have been convicted of, or admitted to, an offence of money laundering;
• Remind applicants of their legal obligations with all new ECGD cover application forms containing a statement of the UK laws on bribery and corruption, and money laundering; and,
• Remind applicants that all allegations of bribery and corruption, and money laundering will be referred to the appropriate authorities, which includes the National Criminal Intelligence Service.

NOTES TO EDITORS

1.  ECGD’s procedures are designed to alert applicants to the seriousness of its commitment to combat bribery and corruption and thus deter corrupt activity.  There have been no occasions in the last five years where ECGD cover has been refused due to allegations, suspicions or evidence of corruption. However, ECGD continues to maintain its vigilance over the life of all the cases it supports.

2. Companies that engage in corrupt activity will have insurance for their contract voided, and ECGD will seek repayment for any claims it may have paid out for the contract.  

An admission or a conviction for bribery and corruption is a prima facie reason for refusal of ECGD cover for future contracts. In such a case, ECGD would thoroughly investigate the circumstances, and the company’s actions in response, before coming to a decision on providing cover.

3. The maximum penalty for a UK national found guilty of bribery and corruption is an unlimited fine and/or seven years in prison.

4. For further details about the new procedures to minimise the risk of bribery and corruption on business deals supported by ECGD, visit: www.ecgd.gov.uk/home/pi_home.htm/policy_on_bribery_and_corruption

5. For more information about the UK laws on bribery and corruption visit:

www.uktradeinvest.gov.uk/corruption_overseas/corruption_overseas/overview.shtml

6. ECGD, the Export Credits Guarantee Department, is the UK’s export credit agency.  A separate Government Department reporting to the Secretary of State for Trade and Industry, it has more than 80 years’ experience of working closely with exporters, project sponsors, banks and buyers to help UK exporters of capital equipment and project-related goods and services.  We do this by providing:

• Insurance against non-payment to UK exporters;
• Help in arranging finance packages for buyers of UK goods by guaranteeing bank loans; and,
• Overseas Investment Insurance - a facility that gives UK investors up to 15 years’ insurance against political risks.

PRESS ENQUIRIES:

Azara Bibi, ECGD Press Office, Tel: 020 7512 7421

(Out of Hours: 07790 887852