Brexit and the SFO

Driven by Theresa May, the Conservative manifesto pledged to scrap the Serious Fraud Office and roll it into the National Crime Agency. In response, the legal friends of the SFO got together and lobbied heavily against its abolition. Their efforts, however, proved to be unnecessary.

When the general election ended with the government being re-elected with a reduced mandate, the Queen’s Speech that followed was dominated by Brexit: a host of pledges were hurriedly thrown on the bonfire, including the SFO merger plan. It was safe. At least for the time being.

But rather like the government which wanted to see the SFO being consigned to history, its authority was reduced and its reputation diminished: the sentence having been passed, it is probably only a matter of time before the final execution is eventually carried out.

For now, and for at least the next two years, Brexit is set to consume the attention of every cabinet minister, sometimes to the exclusion of almost everything else. This will include the PM and her successor as home secretary, Amber Rudd.

Fraudsters, however, wait for no-one. Recorded crime may have fallen by 25% since 2010 but fraud has increased.  Of the 11.5m incidents of crime recorded by the Crime Survey of England and Wales (CSEW) last year, 47% were fraud and computer misuse offences – a remarkable 5.4 million offences in total.

For all the intense debate over the number of police officers, virtually no mention of fraud was made by any politician during the election campaign and its aftermath – despite ONS figures showing that 4.5% of all adults were a victim of bank or credit card fraud, by far the most common crime affecting adults in Britain.

The first duty of government is to protect the life, liberty and property of its citizens. Although the nature of the threat changes over time the fundamental responsibility never does. As the Telegraph commented ‘The recent ransomware attack on the NHS is an indictment of a state that is not doing its job properly. Britain has a cybercrime problem; the next government must make tackling this an absolute priority.’

This was written only days before the Manchester bombing. Terrorism does, rightly, grab the headlines, but it too plays a part in the same deterrent narrative: keeping people and their property safe. Nowhere is this better exemplified than in the awful consequences of the Grenfell fire.

Tackling fraud, which may fund everything from terrorism to criminal self-enrichment, should be at the heart of this government’s agenda. While the immediate focus is inevitably on trade, the single market, the customs union and the transition period before Brexit is finally achieved, there is a real danger that fraud will be further side-lined and overlooked.

One of the less discussed consequences of Brexit is the potential loss of cooperation with different branches of the EU security network which help to combat fraud: national and EU-wide regulators and criminal investigation agencies. Less input from them will make investigations harder and prosecutions fewer, leading to even worse prosecution and conviction rates for the SFO.

The most senior British EU official, Commissioner Sir Julian King, recently spoke out to warn of the need for strong security cooperation in Europe. He said that it was vital for EU member states to work closely together to combat international cyber attacks, terrorists and hostile states and “be prepared for whatever the future holds”. Brexit, he confirmed, potentially risks future security cooperation.

Intelligence sharing may play a pivotal role in Brexit negotiations, we are told. But as the UK stands to lose international influence if deep security links with Europe are lost, there have been implicit indications that Britain may also use its highly valued intelligence services as a bargaining chip in Brussels talks.

Sir Julian described how the world is facing a “new and darker phase” in its relationship with technology, but added that countries must work collectively to tackle the threats confronting them.

He wrote: “Working with colleagues across the European Commission, we are determined to implement a plan for reducing our vulnerability to cyber threats by increasing our resilience to attacks, reinforcing security by design, stepping up the fight against cyber crime, investing in cyber security, and strengthening international cooperation.

“The interconnected world offers many opportunities for citizens, governments and public and private enterprises to make a positive contribution to society. But it also offers unprecedented opportunities to criminals, terrorists, and hostile states. We must be better prepared for whatever the future holds.”

Sir Julian highlighted Europol’s work exposing how sophisticated crime syndicates exploit online trade in illicit goods, adding that “online fraud is now the most common crime in the UK”.

This year, the SFO has been devoting its energies to negotiating Deferred Prosecution Agreements with Tesco and Rolls-Royce. It has taken a gamble in charging four Barclays senior executives alongside Barclays itself in an alleged fraud involving the bank’s dealings with Qatar during its £11.8bn fundraising during the financial crisis nearly a decade ago.

Looking ahead, we must be better prepared, as Sir Julian put it, “for whatever the future holds” in serious fraud, especially cyber crime.

The real suspicion is that the government, so all-consumed by Brexit, does not have the time, the political will or the capacity to devote to fraud as it should. Likewise, the SFO needs to look forward not back, and be ready to meet the challenges posed by tomorrow’s fraudsters. The task of doing that outside the EU seems set to become much harder


Dominic Carman, legal commentator 

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