The OECD Working Group on Bribery reaffirms its concerns about the UK's discontinuance of the BAE Al Yamamah investigation and outlines continued shortcomings in UK anti-bribery legislation.

At its March 2007 meeting, the OECD Working Group on Bribery reaffirmed its serious concerns about the UK's discontinuance of the BAE Al Yamamah investigation and outlined continued shortcomings in UK Anti-Bribery legislation.

It urged the UK to remedy these shortcomings as quickly as possible and decided to conduct a further examination of the UK's efforts to fight bribery.

The Working Group acknowledged that the UK has taken a number of important measures to implement the Convention in the two-year period since a Phase two review of its policies in March 2005 which include extensive awareness-raising about foreign bribery issues.

However, the 2005 Phase two report on the UK recommended, as did an earlier 2003 Working Group report, that the UK enact modern foreign bribery legislation at the earliest possible date. The Working Group voiced serious concerns that this recommendation, which reflected deficiencies of UK law on foreign bribery, remains unimplemented.

In addition, UK law on the liability of legal persons remains deficient and the Working Group reaffirmed that it should be modified in accordance with its 2005 recommendation.

The recent discontinuance of a major foreign bribery investigation concerning BAE SYSTEMS plc and the Al Yamamah defence contract with the government of Saudi Arabia has further highlighted some of these concerns.

The Working Group noted that the UK has stated that the discontinuance was based on national and international security considerations and that the matter is subject to judicial review in the UK. The Working Group underlined in this respect that bribery of foreign public officials is contrary to international public policy and distorts international competitive conditions.

In accordance with Article Five of the Convention, in exercising prosecutorial discretion, parties to the Convention shall be mindful of their obligations and of the object and purpose of the treaty.

The Working Group welcomed the additional explanations from the UK authorities and the openness of the UK delegation. Nonetheless, it maintained its serious concerns as to whether the decision was consistent with the OECD Anti-Bribery Convention.

In light of these outstanding issues, the Working Group has decided to conduct a supplementary review of the UK ("Phase two bis") focused on progress in enacting a new foreign bribery law and in broadening the liability of legal persons for foreign bribery.