UK Export Finance (UKEF) is a government department and is the United Kingdom’s official Export Credit Agency (ECA). UKEF requires applicants and/or exporters to provide information on their anti- corruption processes, and in certain circumstances directs applicants and/or exporters to further information on sources of best practice:
- Prior to any support being provided, applicants and/or exporters must fill out an application form, which includes anti-corruption representations and warranties. Applicants/exporters also undertake to report any corrupt activity in connection with any export contract to UKEF. While there is no legal requirement under United Kingdom law for commercial organizations to have a code of conduct in place, it is strongly recommended to do so. If an applicant and/or exporter indicates in the application form that they have no such code of conduct and/or procedures, UKEF directs them to relevant guidance issued by the United Kingdom’s Ministry of Justice.
- UKEF is committed to taking reasonable and proportionate measures to identify and mitigate the risk of UKEF supporting transactions involved in financial crime. UKEF’s framework for considering financial crime risk comprises of the following risk areas or domains: money laundering, breaches of sanctions, fraud, facilitation of tax evasion, terrorist financing, and bribery and corruption.
- UKEF takes a risk-based approach to requests for exporter support, including whether the support is sought for a specific export contract or more broadly for general working capital for an exporting counterparty’s entire business.
- Despite not being regulated through the risk assessment and due diligence process, UKEF seeks to consider best practice methodology to proportionately identify financial crime risk or red flag indicators to then assess and consider the extent of the risk and the options to mitigate. The due diligence process includes collaboration and partnership across the government estate to shift the due diligence from sole reliance on open-source media checks to being intelligence-led. UKEF does not provide cover if due diligence concludes that a transaction is tainted by corruption. UKEF has no tolerance for being a victim of financial crime. Nor will UKEF tolerate providing support for transactions outside of its financial crime risk appetite.
- At any time during the contract, UKEF has the right to audit the records of the applicants and/or exporters that relate to obtaining the contract supported by UKEF.
- Following the provision of support, UKEF can also exercise financial recourse to the applicant and/or exporter or cancel the insurance cover if the applicant and/or exporter admits to, or is convicted of, corruption and UKEF has suffered a loss.
Since 2019, UKEF has had a dedicated Compliance Function. This function has since expanded to comprise a Financial Crime Due Diligence division (responsible for transaction screening and enhanced due diligence measures ensuring “risk owners” understand the financial crime risks, have controls available and can deliver safe business) and a Compliance Division (responsible among other things for strategy, policy, and compliance assurance activities). Suspicions may be escalated to UKEF’s Compliance Function, who then undertakes enquiries within the limit of its remit.
Sources: Guidance on UK Export Finance: Financial Crime Compliance, https://www.gov.uk/guidance/uk-export-finance-financial-crime-compliance;sample application forms link1, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1134236/BC_Application_Form_Sample_23.01.23.pdf; link 2, https://assets.publishing.service.gov.uk/media/65439e0fd36c910012935c5a/Export_Development_Guarantee_application_form_.pdf); UK Phase 4 report (2017), https://www.oecd.org/en/topics/anti-corruption-and-integrity.html ; Two years follow-up report (2019), https://www.oecd.org/en/topics/anti-corruption-and-integrity.html; Additional follow-up report (2021), https://www.oecd.org/en/topics/anti-corruption-and-integrity.html.
