Domestic UK corruption risks overlooked

Unchecked conflicts of interest and austerity mean corruption risks for UK businesses are increasing, but these dangers are being overlooked because of a focus on overseas bribery cases, warns Fraud Advisory Panel (FAP)

The fraud watchdog, founded in 1998 by ICAEW, says domestic corruption risks in areas such as business, education, local government and elections are neglected and poorly understood, while crimes committed overseas grab all the headlines and resources.

Its report argues that data on domestic corruption are not collected systematically, let alone analysed. There is no dedicated infrastructure or single agency in the UK responsible for taking the lead in policing domestic corruption.

Everyday practices like revolving doors, nepotism, ‘self-regulation’ and excessive ‘hospitality’ – while not strictly illegal – work by stealth to divert resources and opportunities, concentrate power and advantage, and corrode trust, FAP argues.

David Clarke, FAP chair, said: ‘The neglect of domestic corruption risks sits uncomfortably with everything else we know about the epidemic of economic crime in the UK.

‘With most types of economic crime rampant, why would corruption be the exception? If UK companies commit bribery overseas, why would nothing similar occur at home? We add our voice to the growing chorus demanding a clear and positive commitment to ethical business, both at home and abroad.

‘Corruption isn’t a single event or act; it is a process whose ultimate objective is to create a culture in which it can become the new normal. Everywhere we look in Britain today we see signs that just such a culture is beginning to take root.’

The report calls for action on a number of fronts.  These include greater transparency and openness in court proceedings; a central public reporting mechanism to record risks; reducing the bureaucracy around bribery case authorisations so more small-scale activities are tackled; introducing a new corporate offence for failure to prevent economic crime; and a public consultation on a statutory framework for addressing corruption in the public and private sector.

Hidden in Plain Sight: domestic corruption, fraud and the integrity deficit report

Pat Sweet

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