APPENDIX 2
Memorandum by the British Exporters Association
Thank you for your letter of 30 March 2006 inviting
the British Exporters Association ("BExA") to give oral
evidence to the Sub-Committee on Export Credits Guarantee Department's
bribery rules. You requested a written memorandum focusing on
whether or not the procedures published in the Government's Final
Response (i) reduce as far as reasonably practical the risk of
ECGD supporting contracts tainted by corruption and (ii) are workable.
This follows below.
BExA welcomes the fact that after more than
two years of discussion and uncertainty we appear to be in the
final stages of the consultation process. BExA believes that ECGD
and its customers now need a period of stability and confidence
within which to grow their business.
As a general comment we would like to assure
the sub-committee that despite a continuing misperception that
Agents employed in international business dealings are all involved
in making or facilitating the payment of bribes, Agents play an
important and legitimate role in the contractual process. We therefore
believe our members should be free to pay commissions to their
Agents without the burden of providing ECGD with details that
are often confidential and commercially sensitive. We do not understand
what additional comfort the holding of these details will give
ECGD—the only effect is to place an additional burden on
applicants for ECGD support, which could have an adverse effect
on the competitiveness of our members in an internationally competitive
market.
Focusing on the first of the Sub-Committee's
questions, we have mentioned in our previous submissions in relation
to ECGD's Consultation that UK businesses are subject to some
of the most stringent anti-bribery and anti-Money laundering legislation
in the world that, since February 2002, has been given extra-territorial
effect. We believe that rigorous enforcement of existing law by
the appropriate investigating authorities serves to ensure that
the highest standards are maintained. While it is clear that ECGD's
procedures should be consistent with wider Government policies
it is difficult to see what the new procedures can add to the
very real sanctions that face UK exporters and their directors
under English law, particularly as ECGD is not an investigating
body (as acknowledged again in the Final Response). Indeed as
Transparency International pointed out in one of its submissions,
a company that is willing to break the law through payment of
bribes would hardly baulk at the prospect of deceiving ECGD on
an application form. We believe the best way to address this is
for ECGD to know its customers, in much the same way that commercial
banks do when addressing money-laundering issues, rather than
to impose ineffective measures, including revealing commercially
sensitive information about the applicants' Agents.
With regard to whether the new proposals are
workable, there is no doubt that ECGD's new provisions will put
a much heavier burden on industry, imposing additional layers
of regulation that are unlikely to be implemented by any other
OECD country. Germany, Japan, Belgium and the Czech Republic have
already stated publicly that they will not support tighter guidelines
at the OECD meetings in Paris this week as they believe, as we
do, that the real deterrent to corrupt activity is in appropriate
legislation and not in regulation imposed by their Export Credit
Agencies.
We should also note that there is an ongoing
consultation with respect to ECGD's safe handling of information
relating to Agents. We have attached the BExA response to this
final consultation for your information.
We must be very clear that the expression of
the Views contained in this memorandum should not be interpreted
as a lack of support for our shared objective with Government
to combat bribery and corruption in export business. We should
reiterate that our members are fully committed to complying with
both UK and host country anti-bribery and corruption legislation.
27 April 2006
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