Compensation for victims of economic crime overseas

Six months on from the launch of the Home Office’s Anti-Corruption Strategy 2017-20, key commitments are now being acted on. The first being new joint principles on compensating victims of economic crime overseas.

The Anti-Corruption strategy underlined how seriously the UK takes its 'global leadership role' working with other countries to combat corruption. It sets out the strong-track record in providing external support to countries where corruption is endemic and how it works to raise standards internationally. Under the goal “reduce levels of corruption in partner countries” a key action set out is the publication of new principles governing compensation to overseas victims of economic crime. These were published on 1 June 2018. The principles are based on an agreement between the Crown Prosecution Service (CPS), the National Crime Agency (NCA) and the Serious Fraud Office (SFO).

The agreement establishes a common framework to identify cases where compensation is appropriate and act swiftly in those cases to return funds to the affected countries, companies or people. Alongside a commitment to working collaboratively across Government to identify potential victims and utilise suitable means to return money in a transparent manner that minimises the risk of re-corruption. The principles identify remedies for asset recovery and/or compensation available under: The Proceeds of Crime Act 2002 for confiscation and The Powers of Criminal Courts (Sentencing) Act 2000 for compensation.

There is a commitment under the principles to ensure that the question of compensation is considered in every case and to all available legal mechanisms are used to secure it – “whenever appropriate”. It recalls that to date the SFO and the NCA, working with the CPS, have secured £49.2m total compensation for overseas victims in five cases since 2014 including:

  • £28.7m of assets recovered by the CPS following the conviction of Ao Man Long, former Secretary of Transport and Public Works in the Macao Special Administrative Region, for corruption offences. The CPS ensured that Mr Ao’s UK-based assets – part of the US$ 100m hidden in offshore companies and over 100 bank accounts – were successfully returned to the Region’s authorities.
  • £349,000 paid to the Government of Kenya following SFO prosecution of senior executives at printing firm Smith & Ouzman. The funds paid for 11 new ambulances to service hospitals across the country.
  • £4.9m (US$ 7m) compensation to the Government of Tanzania included as part of the terms of the SFO’s first Deferred Prosecution Agreement, with Standard Bank
  • £4.4m recovered by the SFO from corrupt oil deals in Chad which has now been transferred to the Department for International Development to identify key projects for investment to benefit the poorest in that country.
  • £10.9m in a fourth SFO case which cannot currently be identified for legal reasons.

A National Economic Crime Centre

In the spirit of multi-agency co-operation that prevails throughout the strategy, the Home Office’s plan for 2018-19 sets out that it will establish a multi-agency National Economic Crime Centre. The goal of which is to act as the national authority for the UK’s operational response to economic crime. This was one of the core goals within the Anti-Corruption Strategy which set out that the NECC would be based in the National Crime Agency and include staff from across government and the private sector. The aim of which would be to: improve the intelligence picture on economic crime; task and coordinate the overall law enforcement response; and increase the UK’s ability to investigate high-end economic crime.

With the recent appointment of a new Director of the Serious Fraud Office and the pending appointment of a new Director of Public Prosecutions it will be interesting to see how this multi-department co-operation plays out in practice.