Ethics and governance in the European Financial centers - uk

FATF Follow-Up Report about the UK

noreply@blogspirit.com (jturquey) — Fri, 13 Nov 2009 19:18:57 +0100

The FATF has released the Follow-Up Report to the Mutual Evaluation Report of the United Kingdom, which was adopted in June 2007.

In October 2009, the FATF recognised that the United Kingdom had made significant progress in addressing deficiencies identified in that report, decided that the country should be removed from the regular follow-up process and agreed that it should now report on any further improvements to its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) system on a biennial basis.

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Companies scramble to tackle corruption

noreply@blogspirit.com (jturquey) — Wed, 12 Aug 2009 17:30:00 +0200

In a recent study KMPG UK shows that two thirds of companies believe that there are countries in the world where it is not possible to do business without being involved in bribery and corruption, and yet only a third (35 percent) say they have stopped doing business in any countries due to the bribery and corruption risk. The majority of companies say they rely on enhanced controls and third party due diligence when doing business in such countries in order to minimise the dangers.

Alex Plavsic, Head of Fraud Investigations at KPMG Forensic, said: “Companies have a greater awareness now of the bribery and corruption threat due to increased investigations and regulatory activity from the UK and other authorities. However, with the recession companies are having to fight harder than ever to win new contracts, and as a result there could be an increased pressure on those in the front line to over-ride anti-bribery and corruption laws. Compliance processes need to be robust, with special emphasis on due diligence with regard to third party agents, if companies are to protect themselves from regulatory scrutiny and reputational damage. The signs are that many companies could be doing more to manage the risks."

The findings – from a survey of over 100 FTSE listed UK companies – come as companies report an increase in their own internal investigations into possible bribery and corruption breaches. In a similar survey two years ago by KPMG, 27 percent of companies said that they had carried out internal investigations in the previous two years – but this has now grown to nearly four in ten companies (39 percent). The average number of investigations has also grown, from one or two a couple of years ago to three or four now.

Banks warned over tax avoidance

noreply@blogspirit.com (jturquey) — Wed, 01 Jul 2009 10:42:00 +0200

The BCC has reported that Treasury minister Stephen Timms said many banks continued "to be involved in tax avoidance that goes well beyond reasonable tax planning.

His comments came as the Treasury issued preliminary rules for how banks should handle their tax affairs.

Behaviour of bank auditors

noreply@blogspirit.com (jturquey) — Sun, 19 Oct 2008 18:26:00 +0200

As I already said auditors have a responsibility in the collapse of confidence : many of them certified accounts despite red flags all the more than the relationship auditor-auditee is a commercial relationship. I the auditor does not certify he knows that he may lose the client. As far as declarations of suspicion are concerned, of the auditor report a declaration of suspicion he knpws that he will lose the client (and the prospects).

An Early Day Motion was published last 16 October in the UK :

That this House is concerned to find that the banks which have failed in the US, Britain and the EU all had clean bills of health from auditors who are dependent for their appointment and fees on companies and their directors; notes that in all these cases auditors also acted as consultants to the companies and reported on the transactions they created, resulting in a financial dependency which inhibited auditors from doing effective audits or drawing public attention to the questionable mixture of toxic debts, off balance sheet accounting, and dubious asset values which brought the banks down; points out that in 2007 PriceWaterhouseCoopers charged Northern Rock £2.4 million (2006: £1.8 million) of which £1 million (2006: £1 million) was for consultancy, KPMG charged Bradford and Bingley £1.4 million (2006: £1.7 million) of which £0.8 million (2006: £0.8 million) was for consultancy, KPMG charged HBOS £11.4 million (2006: £11.2 million) of which £3.4 million (2006: £4.4 million) was for consultancy, Deloitte and Touche charged RBS £31.4 million (2006: £23 million) of which £14.2 million (2006: £11.1 million) was for consultancy and PriceWaterhouseCoopers charged Lloyds TSB £14.6 million (2006: £17 million) of which £1.5 million (2006: £2 million) was for consultancy; and therefore suggests that audits of banks should be directly conducted by the regulators on a real time basis and external auditors of banks must not act as consultants to the banks or the directors

I wish other parliaments reported the issue.

Read motion

OECD Group demands rapid UK action to enact adequate anti-bribery laws

noreply@blogspirit.com (jturquey) — Sun, 19 Oct 2008 18:12:39 +0200

The OECD's Working Group on Bribery sharply criticised the United Kingdom’s failure to bring its anti-bribery laws into line with its international obligations under the OECD Anti-Bribery Convention and urged the rapid introduction of new legislation (watch the press conference).

Current UK legislation makes it very difficult for prosecutors to bring an effective case against a company for alleged bribery offenses. Although the UK ratified the OECD Anti-Bribery Convention 10 years ago, it has so far failed to successfully prosecute any bribery case against a company.

In light of the numerous issues of serious concern, the Working Group has requested the UK to provide quarterly written reports on legislative progress for each Working Group meeting. It may also carry out follow-up visits to the UK, and may take further appropriate action after it considers the reports or any on-site visits.

The Working Group warned that uncertainty over the UK’s legislative framework may trigger a need for increased due diligence over UK companies by their commercial partners or multilateral development banks.

Read press release

Whitehall accused of blocking UN plan to stop tax evasion

noreply@blogspirit.com (jturquey) — Sun, 28 Sep 2008 13:15:04 +0200

The Guardian has reported that the British government is attempting to torpedo a section of an international plan to eradicate tax evasion with the view of protecting the interests of City law and accountancy firms.

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Financial crime and market stability

noreply@blogspirit.com (jturquey) — Sat, 06 Sep 2008 14:55:00 +0200

Philip Robinson, Financial Crime & Intelligence Division Director at the FSA, did a speech last 3 September.
He stated that "Where there’s evidence of fraud and dishonesty, regulators, professional bodies and law enforcement all have differing combinations of powers to take against offenders. And government agencies and trade bodies all have interests in the housing market being clean and efficient."
The FSA communicates any time there is an issue, which is a good thing and its fines are dissuasive enough.

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The UK and corruption

noreply@blogspirit.com (jturquey) — Tue, 02 Sep 2008 19:10:04 +0200

The UK's decision not to pursue an investigation into arms sales to Saudi Arabia is a black mark against economic transparency and judicial freedom in the country, according to Kathrin Betz from ISN Security Watch in an article titled "Britain yields to bribery and corruption".

This case was raised by Transparency International.

She observed that since 1998, the UK has been party to the OECD Anti-Bribery Convention, a binding multilateral treaty to fight corruption. The July ruling to halt an investigation into alleged corruption for reasons of public safety shows that the UK failed to fully incorporate the OECD Anti-Bribery Convention into domestic law. Read in context with recent legislative developments, this raises doubts about the UK's efficiency in fighting corruption and raises questions as to what extent national security considerations should be taken into account during corruption investigations.

And she concludes that with every new fact that comes to light in the BAE-Saudi case, the allegations will continue and the UK will have missed its chance to take a strong stance against corruption. It will also become entangled in its own anti-corruption hypocrisy.

OECD attacks UK failure on corruption

noreply@blogspirit.com (jturquey) — Wed, 20 Aug 2008 06:18:47 +0200

The financial Times has reported that the anti-bribery working group of the Organisation for Economic Co-operation and Development attacked London’s performance in a letter delivered to the government in June.

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Arrests made in major FSA insider dealing investigation

noreply@blogspirit.com (jturquey) — Wed, 30 Jul 2008 06:58:44 +0200

The Financial Services Authority (FSA) yesterday arrested eight individuals and executed search warrants across London and the South East in connection with a major ongoing investigation into insider dealing rings.

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