Commons Sense

House of Commons · Ministers' Questions

Serious Economic Crime

Thursday 26 May 2022 · 5 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 4 Partly answered 1 Not answered 0

Key points

  • Serious Fraud Office secured reparations totalling over 1.3 billion from organisations it investigated in the past five years.
  • The SFO is taking forward seven prosecutions involving 20 defendants on a total of 80 counts this year.
  • The Solicitor General notes concern about the SFO's tendency to negotiate deferred prosecution settlements instead of prosecuting corporate fraud cases.

Topics (select to filter)

Questions & Answers

Q1 James Sunderland
Crime & Law Enforcement
Context

In recent years, the Serious Fraud Office has faced criticism for its effectiveness in prosecuting serious economic crimes.

Question

What assessment she has made of the Serious Fraud Office's ability to tackle serious economic crime in 2022-23?

Answer from Alex Chalk

In the past five years, the Serious Fraud Office has secured reparations for criminal behaviour from organisations it has investigated totalling over £1.3 billion. That sum is over and above the cost of running the SFO itself. In addition to recent convictions leading to fines and confiscation orders totalling more than £100 million, just this week Glencore Energy has indicated that it intends to plead guilty to seven bribery counts brought by the SFO in relation to its oil operations in Africa.

Answered
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Q2 Jerome Mayhew Con Broadland and Fakenham
Crime & Law Enforcement
Context

Serious economic crimes are often complex, making them challenging to investigate and prosecute.

Question

Serious fraud is too often conducted by the powerful and the rich, which makes it hard to investigate, difficult and complex. That is equally the reason why we must focus on this area above all to demonstrate equality before the law. Will my hon. and learned Friend say how many fraud trials the SFO will conduct this year, and the estimated value of those fraud cases? Does he have a plan to increase that number?

Answer from Alex Chalk

My hon. Friend is absolutely right. We cannot have a situation where, just because the fraud is complex, it is beyond the reach of the law. That is why I am pleased that this year the SFO is taking forward seven prosecutions involving 20 defendants on a total of 80 counts, comprising alleged fraud valued at over £500 million. The alleged frauds include investment fraud, fraudulent trading and money laundering.

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Q3 James Sunderland
Justice & Courts Standards & Ethics
Context

The Serious Fraud Office has faced criticism and legal challenges, raising concerns about transparency.

Question

The Solicitor General will be aware that the Serious Fraud Office has recently suffered a series of humiliating defeats in the courts and received heavy criticism from judges, not least in the ENRC case last week, in which the High Court criticised a former SFO director for “gross and deliberate breach of duty”. Given that the taxpayer now faces a significant bill, will my hon. and learned Friend ensure that the report commissioned from Sir David Calvert-Smith is published in full so that this House can consider his recommendations?

Answer from Alex Chalk

My hon. Friend has raised two points: ENRC and the Sir David Calvert-Smith review. Those are, of course, separate matters, because the Unaoil matter is distinct. In respect of ENRC's civil case against the SFO, it is important to note that the judge found against ENRC on the overwhelming majority of its allegations against the SFO. My hon. Friend is correct about the review being led by Sir David Calvert-Smith, which is focusing on the findings of the Court of Appeal in the Unaoil case. The Attorney General has committed to publishing the findings of the review, and I am happy to restate that commitment today.

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Q4 Feryal Clark Lab Enfield North
Justice & Courts
Context

The Serious Fraud Office has seen a trend of negotiating deferred prosecution agreements rather than prosecuting companies.

Question

Since 2016, the Serious Fraud Office has convicted just five fraudulent companies, but it has negotiated deferred prosecution settlements with another 11. Does the Solicitor General share my concern that when the SFO detects corporate fraud, its instinct is to negotiate instead of prosecuting and convicting those responsible?

Answer from Alex Chalk

The hon. Lady is right that it is always important to be vigilant about the point she raises, but I would make two points. First, in looking at the deferred prosecution agreements, we should just consider what has been achieved over the past five years: £1.3 billion has been taken off companies that have acted in a fraudulent way, in agreements sanctioned by the courts. As I have indicated, this year there will be seven trials in respect of 20 defendants on 80 counts, in respect of fraud worth more than £500 million. It is good news that just this week, Glencore has indicated that it will plead guilty to serious fraud, and it will be sentenced accordingly.

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Q5 Bob Neill Con
Justice & Courts Ukraine
Context

There is a need to address gaps in substantive criminal law that affect corporate fraud cases.

Question

May I, on behalf of my fellow members of the Justice Committee, echo the welcome that has been given to the Prosecutor General for Ukraine? The prosecution of serious fraud has had significant success and I am glad that the Solicitor General recognises that. I have written to him in relation to the Calvert-Smith report, as many of us believe that confidence in the system demands full publication. Will he commit to looking earnestly and carefully at the concerns about gaps in substantive criminal law which sometimes create greater challenges for prosecutors in corporate fraud cases, for example the test in relation to corporate liability in criminal cases and whether there is a case for a duty to prevent, as is the case in other common law jurisdictions?

Answer from Alex Chalk

As always, my hon. Friend makes an absolutely critical point. Yes, there are convictions taking place. We can talk about Glencore, Petrofac and others, but he is absolutely correct that we must consider whether the law is there to meet the changing circumstances. The point he makes about corporate criminal liability is one that we are looking at very closely, not least in light of the Law Commission's conclusions. If there are gaps in the law, we will fill them.

Partly answered

Not addressed: Specific commitment to examining and addressing gaps in substantive criminal law was not provided

How: Looking At This, Considering This

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