Crackdown offshore

According to the FT today

Companies based in the UK, Bermuda and the Cayman Islands account for 16 of the 29 ongoing investigations in Washington’s fast-expanding assault on graft by overseas companies.

Thus far, US prosecutors have secured fines of over $1bn against 43 companies in relation to bribery and corruption charges.

At the same time, a North London lawyer, Jeffrey Tesler, could become the first Briton extradited to the US on corruption charges (the NatWest 3 case did not involve corruption). Tesler is said to have channelled very large sums of cash to Nigerian officials, along with a Ugandan accomplice (bring on Private Eye!).

This corruption case is being closely watched, as the first of its kind. Interestingly, it was only in 2002 that anti-corruption law in the UK actually made it an offence to bribe foreign officials. Tesler’s activities are said to have spanned the period 1995 to 2004, and he may argue that the US has no right to extradite him for alleged involvement in activities that were not, for at least part of the time in question, offences in the UK.

The US is focusing heavily on UK and UK-dependency based companies because of their close ties with the US. There is little doubt that centres that make a selling point of privacy are going to be on the short-list for investigations into alleged corruption, and that is why the BVI, the Caymans and, to some extend, even Bermuda are coming under greater scrutiny.