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Out-Law News 2 min. read

Independent SFO to join new 'national economic crime centre' in fight against financial crime


The future of the independent Serious Fraud Office (SFO) has been confirmed by the UK government as part of a new national strategy to crack down on economic crime.

The government will legislate to give the National Crime Agency (NCA) the power to require the SFO to investigate serious offenders, as part of what the Home Office has termed a "multi-agency response" to fraud, money laundering and corruption. A new 'national economic crime centre' within the NCA will be established to lead the national response to these crimes, backed by greater intelligence and analytical capabilities.

A new economic crime 'strategic board', to be chaired by the Home Secretary, will also be set up, to agree national strategic priorities at government level. The government has also appointed John Penrose MP as its  'anti-corruption champion', following the departure of the previous incumbent, Sir Eric Pickles, after the last election.  Mr Penrose will be responsible for challenging the government on economic crime issues and supporting it in implementing a five-year anti-corruption strategy.

The strategy sets out six priorities that the government will use to guide its efforts to tackle domestic and overseas corruption in the period to 2022. These are reducing insider threats at borders, ports and in other high-risk UK sectors; strengthening the integrity of the UK as an international financial centre; promoting integrity across the public and private sectors and reducing corruption in public procurement and grants; and improving the global business environment while working with other countries to combat corruption.

The government has re-committed to several new laws and regulatory responses as part of the strategy. These include the planned register of the beneficial owners of overseas companies that own UK property or participate in central government procurement, which is currently being developed by the Department for Business, Energy and Industrial Strategy (BEIS); a new working group, led by the NCA, police and prosecutors, which will be tasked with using the powers within the Criminal Finances Act to seize criminal assets; and reforms to the suspicious activity reports regime.

The Law Commission will also review the confiscation laws in the Proceeds of Crime Act, with the aim of improving the process by which confiscation orders are made and making them easier to enforce.

Plans to merge the SFO with the NCA in order to "strengthen Britain's response to white collar crime" were included in the Conservative Party's pre-election manifesto, although the likelihood that this would be taken forward decreased when the government lost its majority at the general election. The so-called 'Roskill model' under which the SFO operates, which brings together prosecutors, investigators and other specialists within a single agency, has been praised by international watchdogs at the Organisation for Economic Cooperation and Development (OECD) for its independence and effectiveness.

Anti-corruption expert Barry Vitou of Pinsent Masons, the law firm behind Out-Law.com, said that the government strategy was "lengthy, detailed and thoughtful".

"Of course, the proof of the pudding is in the eating; however, the report looks promising," he said.

"In the meantime, now there is some certainty around the SFO we can expect the process of recruitment of SFO director David Green's successor to begin. There is not much time, given Green's tenure ends in April. It is also pleasing to see the government taking seriously the use of behavioural science in the fight against corruption - something which Pinsent Masons has been championing with the use of 'nudge' techniques in compliance for some time," he said.

The strategy commits the government to "expand[ing] and improve[ing] the evidence base on corruption and its impacts" including through better reporting techniques, 'open data' releases and collaborating with international governments on projects to develop and improve the use of data in corruption cases. The UK has been working with governments in Columbia, Argentina and Mexico on testing how behavioural sciences approaches can be used to identify and stop corruption in supply chains and in public service, and intends to continue this work, according to the strategy.

'Nudge' techniques refers to the use of simple, basic steps to increase compliant behaviour. Examples include oaths and formal promises to be compliant and the use of signatures to verify the truth or accuracy of documents.

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