COMMONS

Committee publishes report on Financial Crime and Development

30 November 2011

MPs on the International Development Committee have called on the Government of Tanzania to bring individuals to court to answer allegations that corrupt payments were made during the sale of an air traffic control system by BAE Systems.

The Select Committee successfully pressured BAE Systems in the summer to honour its agreement with the Serious Fraud Office and make a full transfer instead of phased payments of £29.5 million

The Committee believes it is essential that all those involved in financial crime are dealt with appropriately, and that where there is a case to answer individuals are brought before the courts. The Committee welcomes the Government of Tanzania's plans to bring individuals before the courts and we will continue to monitor developments in relation to proceedings against individuals in Tanzania.

Comments from the Chair

Chair of the Committee, Malcolm Bruce MP, said:

"Corruption undermines the rule of law and hampers development - it cannot be tolerated"

"I welcome the Tanzanian Government's plans to bring individuals to court to answer allegations that corrupt payments were made as part of a multi-million pound deal with BAE Systems."

"We will continue to monitor developments in relation to proceedings against individuals in Tanzania."

Background

BAE Systems agreed in August to honour its settlement with the Serious Fraud Office over bribery allegations and make an immediate payment of £29.5 million to the Tanzanian Government, following pressure from the International Development Committee.

Recommendations

In the report published today, the Committee recommends that future settlements made by the Serious Fraud Office - as a result of plea bargaining in relation to financial crimes - should be drawn much more tightly than the agreement concluded with BAE. Future settlement agreements should be explicit about what the company is required to do and by when.

Malcolm Bruce MP, added:

"The way that BAE has handled this whole process has been quite shoddy."

"Dragging it out this way has needlessly created the impression that BAE was acting in bad faith. The company should have paid up much sooner."

The report raises concerns that the payment for the 'benefit of the people of Tanzania' remained outstanding more than eight months after the Court hearing and that BAE Systems envisaged spreading payment over a period of years, describing the payments as 'our money'. After pressure from the Committee, BAE has now agreed to make the £29.5 million payment to the Government of Tanzania to provide textbooks and school equipment.

DFID is finalising the necessary arrangements for the procurement and delivery and the International Development Committee has pledged to monitor how the money is spent and help ensure that the funds are used for the benefit of the people of Tanzania. The report also recommends that the Government publish an annual Anti-Corruption Report listing what the Government is doing to combat international corruption, including transnational financial crimes. 

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