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BAE Systems settlement shows UK courts understand seriousness of bribery

Commenting on Justice Bean’s sentencing in the BAE Systems’ Tanzania case, Transparency International UK welcomed the Judge’s stringent remarks concerning BAE Systems’ past conduct. However, the country’s leading anti-corruption watchdog re-iterated its concerns about the case and the outdated laws under which the settlement was negotiated, noting that despite the Judge’s damning comments, the company has not admitted bribery and no individuals have been punished.

According to Transparency International UK this case highlights the shortcomings of current UK anti-bribery laws and the need to bring the new UK Bribery Act (passed last spring) into force as soon as possible. Commencement has already been delayed for a year until April 2011. Today, the head of the anti-corruption watchdog expressed concern that the Tanzania case was effectively about bribery and there were still many questions unanswered. Among these is whether the Tanzanian authorities will be in a position to prosecute those who allegedly received illegal payments in the BAE deal.

Chandrashekhar Krishnan, Executive Director of Transparency International UK, said:

‘This has been a landmark case, in many ways, not least because a major company has been prosecuted despite the handicaps of previous political interference and outdated laws. It is also significant that the company will now have paid a combined US and UK total of £290m – an astonishingly large fine for a company that has consistently denied wrongdoing and in line with the largest fines for bribery anywhere in the world.

‘However, we are particularly disappointed that the settlement appears to prevent the future re-opening of this and other cases involving BAE Systems, should new evidence come to light. Perhaps most seriously, the individuals who allegedly broke the law and enabled large sums of money to be misappropriated in an extremely poor country have gone unpunished.

‘This hearing also highlights the need for a thorough review of sentencing law and procedures, to ensure that judges presented with agreed settlements are able to sentence on a fully informed and transparent basis.

‘It is clear that BAE Systems has got off lightly. The best that can now happen is that the company demonstrates it has turned a new leaf and is irrevocably committed to clean business. We hope that it will treat this as a wake-up call and not a nod-and-wink to return to its past practices.’

Note to editors

Transparency International UK’s detailed briefing note on the settlement when it was first announced in February 2010 can be found at: http://www.transparency.org.uk/publications/101-2009-publications

This briefing note argued that prosecutions should be the norm, citing three major advantages in bringing bribery cases to trial – transparency; the potential for debarment for convicted companies; and both companies and individuals receiving the full force of the law reflecting the seriousness of the crimes.

And it set out four tests for whether settlements, including plea bargains, can be more effective than prosecutions. These are whether:

  • the settlement is in the public interest (where the rationale for this has been set out in a fully and transparently);
  • the punishment is proportionate to the seriousness of the crime
  • the punishment will deter others from committing bribery
  • there are mitigating circumstances.

About Transparency International UK

Corruption is the abuse of entrusted power for private gain. It hurts everyone whose life, livelihood or happiness depends on the integrity of people in a position of authority.

Transparency International UK is the UK Chapter of the world's leading non-governmental anti-corruption organisation, Transparency International.

  • We raise awareness about corruption
  • We advocate legal and regulatory reform at national and international levels
  • We design practical tools for institutions, individuals and companies wishing to combat corruption
  • We act as a leading centre of anti-corruption expertise in the UK.

With more than 90 Chapters worldwide, and an international secretariat in Berlin, Transparency International has unparalleled global understanding and expertise.


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