TISC PN49 0506

TRADE AND INDUSTRY COMMITTEE

COMMITTEE OFFICE HOUSE OF COMMONS
7 MILLBANK LONDON SW1P 3JA

Telephone: 020 7219 5777

PN 48 of Session 2005-06

PRESS NOTICE

PUBLICATION OF REPORT

STRICTLY EMBARGOED: NOT FOR PUBLICATION OR BROADCAST BEFORE 11.00HRS TUESDAY 25TH JULY 2006

ANTI-BRIBERY RULES UNDER SCRUTINY

The Export Credits Guarantee Department has been criticised for wasting tax payers' money.

In a report by the Trade and Industry Committee, MPs argue that the failure of the ECGD to consult on new anti-bribery rules introduced in May 2004, led to a 'great deal of wasted time and money'.

The Committee criticises the Government for ceding to industry pressure by agreeing to an unacceptable weakening of new anti-bribery rules it had issued in May 2004.

'The crucial error that ECGD made was to proceed with the May 2004 procedures without any consultation. It then compounded the problem by embarking on what turned into a one-sided dialogue with one interested party, the exporters, which excluded another, the non-governmental organisations.'

In the face of a challenge by anti-corruption campaigners in the courts to the revised rules in January 2005 the Government agreed to full consultation on the rules. The upshot was further revisions to the anti-bribery rules which came into operation in July 2006.

The new anti-bribery procedures contain 'special handling arrangements' to meet exporter's concerns to protect details they supply to ECGD about their middlemen.

The Committee want to see a review of these 'special handling arrangements', including an evaluation of the extent to which ECGD's commitment to keep the identity of agents confidential has hampered its ability to undertake proper due diligence on the middlemen.

The Government has announced that it will review in three years time new anti-bribery procedures introduced in July 2006.

The Committee would like to see as part of the review, an examination of whether the role of ECGD needs to take on regulatory and investigatory powers to tackle bribery and corruption committed by exporters.

In the meantime, MPs believe the Government should monitor the operation of the July 2006 procedures and at least once a year report to the Export Guarantees Advisory Council the outcome of the monitoring.

Commenting Chair of the Sub-Committee that examined the ECGD's bribery rules, Roger Berry MP, said:

"ECGD's own Business Principles drawn up in 2000 commit it to wide consultation. If ECGD had followed its own policies and consulted business and the anti-corruption organisations in 2004 then everyone involved would have been spared over two years' uncertainty and two major€”and unnecessary€”revisions to the bribery rules.

"We have ended up with revised rules in July 2006 which, although not exactly the same as those we started with in May 2004, are in line with them.

"ECGD now has to show that it can operate the new rules to ensure it does not support exports tainted by bribery and corruption."

Notes to Editors

1.Copies of the report will be available from the House of Commons Press Gallery and the Reception at 7 Millbank SW1P 3JA from 11.00Hrs on Tuesday 25th July 2006.

2.Media Bids/ Requests for interviews with the Chairman of the Sub-Committee should be directed to 020 7219 5779/0724.

3.The title of the report is 'Export Credits Guarantee Department's bribery rules'. HC 1124

25 July 2006

ENDS