Examination of Witnesses (Questions 240
- 245)
TUESDAY 21 NOVEMBER 2000
MR PHILLIP
THORPE, MR
JEREMY ORME,
MR JOHN
ABBOTT, MR
GAVIN COLES
AND MR
TIM SWEENEY
Mr Colman
240. We are the International Development Select
Committee so we are interested in how we deal with the problems
of corruption in developing countries. I understand that evidence
was provided by the current Nigerian Government about what happened
with General Abacha's millions that he looted. It is not media
reports; this is factual and passed on. In the case of the Pakistan
Government, the current one has passed very detailed evidence
over to here in terms of what they alleged had happened under
the Bhutto regime and under the Sharif regime. Nothing has happened.
Clearly there needs to be some sort of basis which we can publicise
in our report on how, if in fact subsequent governments are willing
to provide the audit trail as to what happened, where it happened,
where the money went (because they have clear knowledge that it
is there). How do you suggest that we ensure that in the future
in relation to past corrupt dictators who are in fact moving on,
their money can be tracked down, that there can be successful
prosecutions and the money returned to the countries concerned?
What advice do you give to successor governments in developing
countries as to how they can get the United Kingdom Government
to act?
(Mr Thorpe) I suspect I speak for all of us in suggesting
that you take us well beyond our remit, authority or knowledge
in respect of that question. This is a matter that governments
consider and opine on.
241. Okay. The specific is about Abacha and
Bhutto and the Sharifs. The information was provided in all three
of those cases. Why was none of them followed up?
(Mr Thorpe) Again I suspect you may be taking us beyond
our collective knowledge but I do not believe it was provided
to us. I believe this would have gone to other government agencies.
242. Could I ask John Abbott?
(Mr Abbott) You can ask me, certainly, sir. I regret
that I am reluctant to speak about individual cases. I am very
prepared to speak with the Committee in private session in respect
of individual cases. To try and draw it to generality if I may,
provided we receive information we will seek to act upon it and
to encourage an investigating agency to act upon it. There is
a question around timeliness and what information is being provided.
Chairman: Maybe we would like to take
you up on that offer. We will let you know.
Mr Worthington
243. Can I go back to something Mr Thorpe said
a minute ago about 15 regimes which were not the strongest financial
regimes and about which you had doubts. From memory of when we
went through those, they were mainly the very small scale regimes,
and Russia. We have not mentioned Russia so far. Are you taking
any special efforts to deal with what is obviously a very large
scale problem in that country where a large amount of money is
probably being attempted to be recirculated within our economies?
(Mr Thorpe) Russia indeed was one of the 15 listed.
I will not go over all of them but there are a large number of
small island financial centres. There are also the Philippines
which are not small or Israel which is also not small in this
regard. The point remains more or less as I suggested before.
We would expect institutions since this has been published—not
by ourselves, I might add, but by an international body which
is in a position to give this kind of observation—to apply
this in their review of suspicions or other information and to
be cautious in respect of account opening or transactions where
they connect to any of these jurisdictions. In terms of what has
it shown so far, I am afraid we are talking about something that
was published in June and with the way these things go it will
be some time before we conduct sufficient reviews to see whether
there is a pattern that is emerging in respect of responding to
this extra information.
244. The point I am making is that on the borders
of the European Union we have an economy which is now operating
in a different way from how it operated in the past, from being
perhaps sealed off to where a major motivation for economic activity
there is to get the money out of the country and to be recirculated.
Would you develop country strategies against individual strategies?
Do you anticipate that occurring? I know it is early days for
you.
(Mr Thorpe) I think you are quite reasonable to ask
that, without compromising the point I was making before. We look
internally to see where problems are emerging and that does inform
us when we go to look at particular institutions and their systems
and controls. If we were looking at a particular institution tomorrow
that had a large and developing business with Russian institutions
we would pay particular attention to that. We are as informed
by this type of announcement as the institutions we regulate,
so it will affect our view of matters, yes. I would hesitate about
proximity. With the capacity for these transactions to be flitting
around through the internet at any pace, the smallest countries
can be major channels in this respect.
Chairman
245. Thank you. Mr Abbott, would you be prepared
to stay behind if we went into private session to give us the
evidence which you suggested you would be willing to do?
(Mr Abbott) Certainly, Chairman.
Chairman: We would like to do that. Perhaps
I can say thank you very much to our witnesses. It has been very
informative for us and an essential part of our enquiries. Thank
you all very much.
Qq. 246-269 were heard in private and
not reported to the House at the request of the witnesses and
with the agreement of the Committee.
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