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III. THE BAE/SAUDI AL-YAMAMAH CONTRACTS: IMPLICATIONS IN LAW AND PUBLIC PROCUREMENT

PUBLIC INTERNATIONAL LAW

Published online by Cambridge University Press:  13 February 2008

Sope Williams
Sope Williams
Affiliation:
School of Law, University of Nottingham.
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Type
Current Developments: Public International Law
Information
International & Comparative Law Quarterly , Volume 57 , Issue 1 , January 2008 , pp. 200 - 209
Copyright
Copyright © 2008 British Institute of International and Comparative Law

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References

1 These contracts were called Al-Yamamah (The Dove) by the Saudi Government.

2 See BAE Systems, Annual Report 2006, <http://www.baesystems.com>.

3 See BAE systems in Saudi Arabia, <http://www.baesystems.com>.

4 Government of the Kingdom of Saudi Arabia and the Government of the United Kingdom of Great Britain and Northern Ireland, ‘Memorandum of Understanding for the provision of equipment and services for the Royal Saudi Air Force, September 1985’, <http://image.guardian.co.uk/sys-files/Politics/documents/2006/10/27/PJ5_39AYMoUSep1985.pdf>.

5 C Chandler, ‘Confidential Memo on arms sales unit on Commercial Negotiations for Tornado Project’ (Jan 1986) <http://image.guardian.co.uk/sys-files/Politics/documents/2006/10/27/J5_40RiyadhreportconclusionJan86.pdf>.

6 D Robertson, ‘BAE Confirms £5bn Eurofighter Sale to Saudi Arabia’ The Times Online (19 Aug 2006).

7 S Hawkes and D Robertson, ‘BAE Profits Surge Confounds US Sales Fears’ The Times Online (9 Aug 2007); R Norton-Taylor, ‘BAE and the Saudis Finally Sign £4.43b Eurofighter Deal’ The Guardian (18 Sept 2007).

8 Bribes of £600 m in jets deal, The Guardian (21 Oct 1985).

9 Hansard HC vol 412, col 437W (3 Nov 2003) <http://www.publications.parliament.uk/pa/cm200203/cmhansrd/vo031103/text/31103w13.htm>.

10 Serious Fraud Office, Press Statement (3 Nov 2004) <http://www.sfo.gov.uk/news/prout/pr_337.asp?seltxt=>.

11 Section 1 (3) Criminal Justice Act 1987.

12 C Nicholls et al, Corruption and Misuse of Public Office (OUP, Oxford, 2006) para 4.08–4.25.

13 The Law Officers Department, Departmental Report 2006 (Cm 6811–Cm 6838) part 3, 61, at <http://www.sfo.gov.uk/publications/pdfs/LO_DepartmentalReport2006.pdf>. See Nicholls et al (n 12) 4.25–4.32.

14 See Serious Fraud Office, Press Statement (3 Nov 2004) <http://www.sfo.gov.uk/news/prout/pr_337.asp?seltxt=>.

15 M Robinson, ‘BBC Money Programme–BBC lifts the lid on secret BAE slush fund’ (5 Oct 2004), repeats the information provided in a programme ‘Bribing for Britain’ aired on BBC 2 on 5 October 2004.

16 ‘SFO to Investigate BAE Contracts’ See BBC News (3 Nov 2004) <http://news.bbc.co.uk/2/hi/business/3978703.stm>.

17 D Leigh, ‘Saudi Arms Deal Inquiry Closes in on Secret Papers’ The Guardian (20 Nov 2006).

18 Chandler (n 5). See also D Leigh and R Evans, ‘The Secret Whitehall Telegram that Reveals Truth Behind Controversial Saudi Arms Deal’ The Guardian (28 Oct 2006).

19 OECD, ‘United Kingdom: Phase 2 Follow-up Report on the Implementation of the Phase 2 Recommendations’ (21 June 2007) 5.

20 Serious Fraud Office, Press Statement (14 Dec 2006) <http://www.sfo.gov.uk/news/prout/pr_497.asp?seltxt=>.

21 OECD (n 19) 7. For further details, see HC Constitutional Affairs Committee, ‘The Role of the Attorney-General’ (2006–7) HC 306, paras 43–6, 54–6 and Evidence of the Director for the Serious Fraud Office and the Attorney-General, Qus 217–314, 315–68 (27 June 2007).

22 The Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916.

23 Home Office, ‘Bribery: Reform of the Prevention of Corruption Acts and SFO Powers in Cases of Bribery of Foreign Officials (A Consultation Paper)’ (Dec 2005) para 9.

24 R v Raud [1989] Crim LR 809.

25 Pub L No 95-213, 91 Stat 1494. Although this is a piece of domestic legislation, it is regarded as the genesis of extraterritorial attempts at controlling corruption. See M Maris and E Singer, ‘Foreign Corrupt Practices Act’ [2006] Am Crim L Rev 575; A Posadas, ‘Combating Corruption under International Law’, (2000) 10 Duke J of Comparative and Intl L 345.

26 P Johnstone and G Brown, ‘International Controls of Corruption: Recent Responses from the USA and the UK’ (2004) 11 J Financial Crime 217.

27 (1994) 33 ILM 1389.

28 Art I 1994 Recommendation.

29 Art III (i) 1994 Recommendation.

30 Art III (iii) 1994 Recommendation. The 1994 recommendation was followed in 1996 by the OECD Recommendation of the Council on the Tax Deductibility of Bribes to Foreign Public Officials (1996) 35 ILM 1311.

31 Art III (iv) and (v) 1994 Recommendation.

32 OECD Revised Recommendation of the Council on Combating Bribery in International Business Transactions (1997) 36 ILM 1016.

33 Art III 1997 Revised Recommendation.

34 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1998) 37 ILM 1 (hereafter, ‘the Convention’).

35 Art 1 (1) Convention.

36 Art 3 (1) Convention.

37 Art 1 (4) Convention.

38 Art 4 (1) Convention.

39 United Kingdom-Phase 1: Report on Implementation of the OECD Anti-Bribery Convention June 2000, 11 <http://www.oecd.org/dataoecd/8/24/2754266.pdf>. In the UK, a phone call into the UK relating to the bribe will be sufficient to establish jurisdiction.

40 OECD Convention on Combating Bribery of Foreign Public Officials: Ratification Status, <http://www.oecd.org/dataoecd/59/13/1898632.pdf>.

41 United Kingdom-Phase 1: Report on Implementation of the OECD Anti-Bribery Convention (n 39) 1 and 24.

42 Section 108 ACSA 2001.

43 Section 109 ACSA 2001.

44 Section 108 ACSA 2001.

45 T Swanson, ‘Greasing the Wheels: British Deficiencies in Relation to American Clarity in International Anti-Corruption Law’ (2007) 35 Georgia J Intl & Comparative L 397, 423–31.

46 See UK-Phase 1 Bis: Report on Implementation of the OECD Anti-Bribery Convention (Mar 2003) 15.

47 Art 1 (1) Convention.

48 See the limitations of this consent in Johnstone and Brown (n 26) 229.

49 Section 4 (1) 1889 Act; s 2 (1) 1906 Act.

50 See Crown Prosecution Service, Code for Crown Prosecutors (2004).

51 OECD, ‘United Kingdom Phase 2—Report on the application of the convention on combating bribery of foreign public officials in international business transactions and the 1997 recommendation on combating bribery in international business transactions’ (17 Mar 2005) 53–7.

52 ibid 55. See R v Attorney General ex parte Rockall [1999] All ER 312.

53 Section 110 ACSA 2001. See s 1, Prevention of Corruption Act 1916.

54 S Rose-Ackerman and B Billa, ‘Treaties and National Security’ [2007] New York Univ Jl of Intl L and Politics (forthcoming).

55 ‘BAE Systems: Al Yamamah Contract’ Hansard HL, vol 688, col 780 (18 Jan 2007) <http://www.publications.parliament.uk/pa/ld200607/ldhansrd/text/70118-0002.htm#07011849000062>.

56 PM defends BAE decision 7 June 2007, <http://www.pm.gov.uk/output/Page11882.asp>.

57 Rose-Ackerman and Billa (n 54).

58 P Cullen, ‘Article 5: Enforcement’ in M Pieth, L Low and P Cullen (eds), The OECD Convention on Bribery: A Commentary (CUP, Cambridge, 2007) 322.

59 Rose-Ackerman and Billa (n 54).

60 F Bennion, ‘Prosecutions: The Al-Yamamah Incident’ (2007) 171 JP 6.

61 See, however, Bennion (n 60), who asserts that Art 5 has no legislative force and may be disregarded.

62 Bennion (n 60). See also, D Leppard, ‘Blair Hit by Saudi “bribery” Threat’ The Times Online (19 Nov 2006).

63 G Brown, ‘Prevention of Corruption: UK legislation and enforcement’ (2007) 15 J Financial Regulation & Compliance 180, 184.

64 See G Rodmell, ‘Corruption—Economic Crime or Economic Reality’ (2007) 28 Company Lawyer 259.

65 The Committee Against Arms Trade (CAAT) and Corner House launched judicial review proceedings into the validity of the SFO's decision to terminate the investigation. See <http://www.caat.org.uk/issues/sfo/sfo-latest.php>. On 19 April 2007 the plaintiffs lodged full grounds for judicial review, see Detailed Statement of Grounds, Claim No CO/1567/2007, <http://www.caat.org.uk/issues/sfo/JR_grounds.pdf>. Judicial review was refused on 29 May 2007 and the application was renewed for an oral hearing. The NGOs were granted leave to seek judicial review of the decision to discontinue the investigation. A hearing is expected early in 2008 (<http://www.thecornerhouse.org.uk/item.shtml?×=558414>).

66 See generally, J Colares, ‘The Evolving Domestic and International Law Against Foreign Corruption: Some New and Old Dilemmas Facing the International Lawyer’ (2006) 5 Wash Univ Global Studies Rev 1; M Maris and E Singer, ‘Foreign Corrupt Practices Act’ (2006) American Crim L Rev 575.

67 J Werdigier, ‘US Investigates Saudi deal for British arms’ New York Times (27 June 2007).

68 15 USC § 78 dd-1 (g), 78 dd-2 (i).

69 15 USC § 78 dd-1 (a).

70 15 USC § 78 dd-1(a), dd-2 (a), dd-3 (a).

71 15 USC § 78 dd-1 (a); 3–15 USC § 78 dd-3 (a) 3.

72 United States v Blondek 741 F Supp 116, 119–120 (ND Tex, 1990).

73 McLean v International Harvester Co, 902 F 2d 372 (5th Cir 1990).

74 15 USC § 78 m (b) 2 (B); 15 USC § 78 m (b) 5.

75 15 USC § 78 dd-2 (g) (1) (A) to 78 ff (c) (1) (A).

76 15 USC § 78 ff (a).

77 ibid.

78 15 USC § 78 dd-2 (g) (2) (A), 78 dd-3 (e) (2) (A), 78 ff (c) (2)(A).

79 S Schooner, ‘The Paper Tiger Stirs: Rethinking Suspension and Debarment’ (2004) 5 PPLR 211, 212–13. See FAR 9.405.

80 S Williams, ‘The Mandatory Exclusions for Corruption in the New EC Procurement Directives’ (2006) 31 Eur LR 711, 715.

81 Codified at 48 CFR pt 1.

82 FAR 406-2 (a) (3).

83 FAR 406-2 (a) (5).

84 See <http://www.epls.gov/>.

85 FAR 9.405 (a).

86 ibid.

87 FAR 9.406-1 (b).

88 FAR 9.405-1.

89 FAR 9.402 (b). See D Duvall, ‘Moving Towards a Better-Defined Standard of Public Interest in Administrative Decisions to Suspend Government Contractor’ (1987) 36 American Univ LR 693.

90 Shane Meat Co v Department of Defense, 800 F 2d 334, 338 (3rd Cir 1988).

91 FAR 9.406-1 (a).

92 BAE Systems Annual Report 2006 (n 2) 12.

93 ibid 10.

94 FAR 9.406-1 (c).

95 DFARS 209.405 (a) (i).

96 DFARS 209.405 (a) (ii).

97 DFARS 209.405 (a) (iv).

98 FAR 23.506 (e).

99 FAR 9.407-1.

100 J Zucker, ‘The Boeing Suspension: Has Increased Consolidation Tied the United States Department of Defense's Hands’ (2004) 5 PPLR 260.

101 ibid 262.

102 A Schutz, ‘Too Little Too Late: An Analysis of the General Service Administration's Proposed Debarment of WorldCom’ (2004) 65 Administrative L Rev 1263, 1273.

103 Directive 2004/18/EC of the European Parliament and of the Council of March 31 2004 on the co-ordination of procedures for the award of public works contracts, public supply contracts and public service contracts [2004] OJ L/134/114 (hereafter public sector directive); Directive 2004/17/EC of the European Parliament and of the Council co-ordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors [2004] OJ L134/1 (hereafter utilities directive).

104 Art 45 public sector directive. See Williams (n 80) 715.