The Serious Fraud Office has seemingly won a reprieve as the Government announced plans for a new economic crime centre.
The news confirms a significant shift in policy from the Prime Minister.
During her record-breaking stint as Home Secretary, Theresa May made two attempts to have the SFO abolished and for the agency’s work to be absorbed by the National Crime Agency (NCA).
These were foiled after the likes of Dominic Grieve, then attorney general, and Ken Clarke, then justice secretary, persuaded David Cameron it was not a good idea.
However, as Conservative leader, Mrs May revived the idea and it was a formal manifesto commitment in the general election earlier this year.
Following the election result, though, the proposal was conspicuous by its absence from the Queen’s Speech.
Now it has been confirmed that, apparently, the SFO will live to fight another day.
Image: Money laundering will be a key focus for the new unit
Instead, the Government is to set up a National Economic Crime Centre, as an arm of the NCA, which will have the power to direct the SFO to carry out certain investigations.
In particular, armed with what Mrs May’s successor as Home Secretary, Amber Rudd, described as “greater intelligence and analytical capacities”, the new centre is expected to focus on money laundering and people trafficking.
The aim is that the centre will co-ordinate a national response to both crimes and to other forms of fraud and that it will significantly improve “proceeds of crime” seizures from criminals.
Ms Rudd said: “The measures we have announced today will significantly improve our ability to tackle the most serious cases of economic crime by ensuring our agencies have the tools and investment they need to investigate, prosecute and confiscate criminal assets.”
The Home Office estimates that £90bn worth of money is laundered in the UK annually and that financial fraud costs an estimated £6.8bn each year.
So what seems to be behind the change of heart?
One factor is that the SFO, pilloried for years as the “Serious Farce Office” by the satirical magazine Private Eye, has raised its game.
Under its current director David Green, who is due to step down in April next year, it has notched up a string of US-style “deferred prosecution agreements” with major companies in which they agree to pay a fine in return for avoiding prosecution.
These included a £129m settlement with Tesco for the supermarket’s 2014 accounting scandal and a record £497m extracted from Rolls-Royce to settle bribery allegations.
The SFO published figures earlier this year suggesting that, during the year to the end of April, it had paid £516.8m into the Treasury – more than its total running costs of £473m for the last decade.
Image: Rolls-Royce paid £497m to settle an SFO bribery investigation
Yet the SFO has also suffered some reverses under Mr Green, most notably in January 2016, when it failed to convict six men for conspiracy to rig the Libor rate.
This new arrangement will not be to everyone’s liking.
The notion of creating an arm of the NCA, to which the SFO would be answerable, has been criticised by some lawyers in the past on the grounds that the NCA has no record or expertise in fighting complex fraud cases or other commercial cases.
The SFO also prides itself in the fact that, unlike the NCA, it is not answerable to the Home Office.
This, lawyers argue, gives it greater ability to strike deals with corporate defendants who might otherwise be suspicious of political interference in their cases.
It combines the role of investigator and prosecutor specifically to avoid such accusations and it, not the Crown Prosecution Service, decides whether to pursue a case.
Before the election, a group of leading lawyers even wrote to Mrs May urging her not to merge the SFO with the NCA, on the grounds that it would reduce the willingness of other crime-fighting agencies, such as the US Department of Justice, to work with it in future.
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So anything that dilutes that independence of thought and function in the SFO will not be welcomed by many in the legal profession.
It remains to be seen how these proposed new arrangements will work in practice.