UK: British Companies Demand Relaxed Regulations

Publisher Name: 
Guardian (UK)

UK: Three of Britain's blue chip
companies told the government they would boycott its export guarantee scheme
unless tough new rules over bribery and corruption were relaxed, MPs were told
yesterday.


Rolls-Royce, the Airbus Consortium and BAE Systems were named by
John Weiss, deputy director of the Export Credit Guarantee Department, as the
main objectors to rules which came into force last May and are to be watered
down from next month.

The revelations come days after the Serious Fraud
Office started an investigation into an alleged slush fund connected with BAE's
involvement in a huge jets deal with Saudi Arabia.

Mr Weiss released the
names after tough questioning from MPs on the Commons trade and industry
committee yesterday on why his department had agreed a U-turn to satisfy
complaints from the business world, including the CBI and the British Bankers
Association.

The new rules led to advice from lawyers to companies and
the banks who guarantee the company loans that firms should not sign up to ECGD
deals because they could not know that all the people involved in the project
were not involved in any bribery or corruption.

Mr Weiss told MPs:
"Lawyers advised them that they could not sign the agreements under the new
rules. In hindsight, it was our fault as we had not consulted them before they
came into force."

He told MPs that following lobbying from companies the
rules were being changed to meet their objections. Asked to spell out the
changes by Martin O'Neill, the Labour chairman of the committee, he listed five
major concessions.
Companies will no longer have to
guarantee that their affiliates or joint venture partners are not involved in
bribery. ECGD has also dropped a requirement that all employees and directors
must have no record of corrupt practices - this will now apply only to
directors. Agents will no longer be required to be clean either. In future ECGD
also agreed that it will not ask for audited accounts in the run-up to an
application unless allegations of bribery are brought to its
attention.

BAE declined to comment on why
it wanted less stringent regulations. "We are saying nothing. All questions
should be referred to the CBI because they acted on behalf of the whole
industry," said a company spokesman. Rolls-Royce was unavailable for
comment.

Mr O'Neill said yesterday after the hearing: "The civil servants
had been hung out to dry by ministers. These new guidelines were not produced in
a political vacuum and they are not being withdrawn without ministerial
guidance.
AMP Section Name:Money & Politics
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