Transparent exporting in a post-Brexit world

Exporters have a key role to play in the stand against bribery and corruption and to meet the governance elements of ESG in a post-Brexit world, but they may need more help from government. Mark Norris, Deputy Chair of BExA and Partner at Sullivan investigates
Mark Norris
Mark Norris
Deputy Chair, British Exporters Association
22/03/2021

Exporters continue to show that they are adaptable to whatever circumstances throw up. Be it the COVID-19 pandemic, the UK’s withdrawal from the EU or increased statutory obligations. Following the UK’s withdrawal from the EU, UK exporters have been encouraged to look at new markets. The UK government has set out that it wants the UK to be ‘the investment partner of choice for Africa’.

Increasing trade with growth and developing countries will not only benefit UK exporters but is widely recognised as an effective method of meeting the United Nation’s Sustainable Development Goals (SDGs).

With new markets come new challenges. For example, Sub-Saharan Africa is the lowest performing region on Transparency International’s Corruption Perception Index – and is showing little improvement year on year. This presents a significant obstacle to exporters. For exporters one of the key issues from a governance perspective is bribery and corruption.

Disturbingly, Transparency International’s ‘Global Corruption Barometer – Africa’ highlighted that more than one out of four people – around 130 million people in the 35 African countries surveyed – had paid a bribe to access essential public services such as health care and education. Not surprisingly the UN has highlighted bribery and corruption is of ‘one of the biggest impediments to achieving the SDGs.’

Exporters have an important role to play in combatting bribery and corruption. Organisations such as the British Exporters Association (BExA) not only lobby government to provide support for exporters but also work with exporters to help them meet the challenges in exporting. BExA believes that governments can do more to assist exporters, particularly SME exporters, meet the challenges of bribery and corruption.

The UK prides itself on having some of the toughest anti-bribery legislation. Given the important role that trade and exports can have in meeting the UN’s SDGs it is important that anti-bribery legislation does not act as a drag on exporters. The cost of compliance can be significant for SME exporters.

To ensure that the cost of compliance does not become a barrier to exporting, governments need to be more pro-active in supporting exporters. A particular need in those target regions which rank poorly in Transparency International’s Corruption Perception Index is for Embassies and High Commissions to have easily accessible dedicated resources to assist – ideally with dedicated ‘hotlines’.

In the UK, while departments such as the Ministry of Justice provide guidance, such guidance can only ever provide limited support. The House of Lords in its 2019 post-legislative scrutiny of the Bribery Act 2010 found that the Ministry of Justice Guidance was less successful in providing SMEs with the information and advice they need to enable them to decide on a formal anti-bribery policy.

It is not just with the policies and procedures that exporters need to have in place where exporters would welcome more assistance – it is also with the combatting of specific incidents of bribery and corruption. This is an area where BExA believes that government should be more innovative.

Lessons from FCPA

The US has a procedure where the US Department of Justice (the DOJ) can issue Foreign Corrupt Practices Act (FCPA) Opinions on specific situations. Although little used (last year the DOJ issued its first Opinion in six years) this could provide the basis of a useful mechanism for exporters.

The FCPA Opinion Procedure allows US ‘issuers and domestic concerns’ to request an opinion from the DOJ ‘as to whether certain specified, prospective – not hypothetical conduct – conforms with the DOJ’s ‘enforcement policies regarding the [FCPA’s] anti-bribery provisions.’

A favourable FCPA Opinion creates a rebuttable presumption that the requesting company’s conduct complies with the FCPA’s anti-bribery provisions. Particularly useful is the fact that these FCPA Opinions are then published on an anonymised basis to provide guidance to others.

The House of Lords in its post-legislative scrutiny of the Bribery Act 2010 considered whether it would be appropriate to have a similar procedure in the UK but was not supportive. Monty Raphael QC in his evidence to the House of Lords Committee highlighted the challenge faced by SMEs and the SFO’s position on issuing opinions – that companies should instead, “bloody well go and get their own advice from their very expensive ritzy experts... I am not here to give advice,” (David Green CB QC).

Although the FCPA Opinion Procedure is used infrequently (and there are specific reasons for this) BExA believes that the UK government should be looking to develop a procedure along these lines to support exporters. Exporters are committed to ESG but this comes at a cost and here governments can assist. Particularly as exporters are being encouraged to look at new markets with very high bribery and corruption risks. Government departments can and must do more.

Dedicated bribery and corruption hotlines at Embassies and High Commissions would be a useful first step so that bribery and corruption issues can be followed up promptly on the ground at a government to government level. The UK government should commit to launching a few trial programmes.

Government departments such as UK Export Finance are committed to pro-actively developing products to support exporters and are committed to collaborating with other government departments to ensure that the government provides ‘a joined-up offering to exporters’. More government departments need to adopt this approach.

Proactive government support for exporters to address the bribery and corruption challenges when exporting to countries with high perceived levels of corruption will not only assist exporters but will make a significant contribution to helping meet the UN’s SDGs through good governance, job creation and increased trade.

More BUlletin Publications

Charting a course forward

01/05/2024

Charting a course forward: Navigating AI, digitalisation, and economic support amidst unprecedented global change

This May edition of the BUlletin offers fresh insights on embracing and implementing digital strategies, adopting AI tools to enhance efficiency and security, supporting the Ukrainian economy by helping keep trade...

Celebrating 90 years of supporting trade and investment

26/02/2024

Celebrating 90 years of supporting trade and investment - 1934 - 2024

Reflecting on Berne Union’s origins and celebrating its achievements. What does the future hold?

 

Climate Working Group: The continuing momentum for change

19/09/2023

Climate Working Group: The continuing momentum for change

The Berne Union’s Climate Working Group is proving a helpful forum for sharing good practice. How is it progressing, and how can our industry continue to help with this initiative?

Claims: Controling Chaos, and Risk Versus Reality

29/06/2023

Controling Chaos, and Risk Versus Reality

In this edition we explore BU claims data and its relation to predicting risk since the pandemic, we also feature a broker's eye view of the state of the CPRI market, the bold restructuring of Denmark's investment and export financing with EIFO, how EDC is looking at ESG risks and ...

Landmark modernisation for OECD Arrangement

25/04/2023

Landmark modernisation for OECD Arrangement

A bold agreement for the Arrangement marks a positive development for our industry. Also featuring
digital access to export finance for China SMEs, challenging the 'China debt trap' narrative for Africa,
insolvency trends, analysing service ...

What's on the horizon for 2023?

28/02/2023

What's on the horizon for 2023?

The pick of key issues to look out for in 2023 – from macro trends, potentially choppy seas for smaller ECAs,  possibilities for using Islamic finance in the renewable energy transition, China’s reopening, a bumpy CPRI outlook, and reinsurance complexities. 

Authors look at...

Digitalisation as a business leadership imperative

25/11/2022

Digitalisation as a business leadership imperative

Technology-driven trade and client interaction are nothing new. But increasing investment in digitalisation of fundamental business processes and decision making is driving a new way of looking at trade finance and risk underwriting. Authors highlight successes and challen...

Mobilising Africa's Potential

06/09/2022

Mobilising Africa's Potential

Despite the challenges there are many positive opportunities emerging for Africa today

Curated by the BU Sub-Saharan Africa Working Group, authors for this special edition of the BUlletin explore areas of growth and the role of different sources of international finance tapping this

Ripples and After-effects

22/07/2022

Ripples and After-effects

exploring the multiple secondary impacts of both the pandemic and the war in Ukraine

from sovereign risk in Africa, to energy security, political violence and the private CPRI market

Shocks and Short Circuits: The Rewiring of Global Trade

07/04/2022

Shocks and short-circuits: The re-wiring of global trade

The bright shoots of economic growth are under threat once again
Assailed by commodity supply shocks and political instability exacerbated by the war in Ukraine
Contributors this month look at the complex impacts on trade and investment across developed and...

Diverging Risk

14/01/2022

Some predict that 2022 may finally bring us beyond the thrall of the COVID-19 pandemic

But the events of past two years have brought significant divergence of risk across economic and geographic boundaries

Authors this month look at how this is playing out in a range of cases

New Foundations

29/09/2021

If the global economy is truly on the road to recovery how can we build the surest path to sustainable growth in our new net-zero world?

New foundations in tech, data, and cooperative frameworks may help guide us into the next phase

Illuminating Climate

22/07/2021

Now widely recognised as an economic as well as environmental imperative
The momentum to tackle climate change is building
Changing perspectives, policy, products and processes across the export credit industry

In search of claims

30/04/2021

Where is the avalanche of claims and insolvencies expected to emerge from COVID-19?
The picture so far is uneven across geographies, sectors and business lines
And for the future? Well, it depends...

Cross-roads for Africa's recovery

21/04/2021

The economic impact of the COVID-19 pandemic on Africa has been considerable and the path of recovery depends on maintaining the support of local, regional and international stakeholders. But which approaches can best build upon the opportunities presented by growing intra-regional trade, and investment in sustainable infrastructure?

Navigating the Brave New World of Trade

23/03/2021

With the wounds of the pandemic still under triage, a rebound in trade could the best hope for governments and businesses alike.
But trade is under immense pressure from myriad directions.
How can we maintain supply of finance, in the face of growing demand and irregular patterns of risk?