Legal correspondence with Export Credits Guarantee Department
following up OECD Phase2bis report

by solicitors Leigh Day & Co, and Export Credits Guarantee Department

first published 30 March 2009

The October 2008 Phase 2bis report on the UK by the OECD Working Group on Bribery was highly critical of the continuing support from the UK's export credit agency, the Export Credits Guarantee Department (ECGD), for BAE's Saudi Arabian arms contracts.

The report queried why ECGD had not acted on evidence that BAE had allegedly made bribery-related fraudulent misrepresentations when it requested insurance cover from ECGD. The Serious Fraud Office (SFO) had handed this information over to ECGD as part of its corruption investigation into BAE's contracts with Saudi Arabia.

The report also raised probing questions as to why ECGD had extended further insurance to BAE for the subsequent Al Salam contracts at a time when the recipient of the underwritten exports, Saudi Arabia, was known to have interfered with the UK's criminal law proceedings (the Serious Fraud Office's BAE-Saudi investigation).

Following up on this report, solicitors Leigh Day & Co, acting for The Corner House and Campaign Against Arms Trade, wrote to ECGD, asking what steps it was taking to review its insurance cover provided for the Al Yamamah contracts involving BAE and Saudi Arabia in the light of evidence passed to it by the SFO and whether the Department intended to use its audit powers to do so.

This document is the ensuing correspondence, which revealed that BAE had cancelled all its public insurance for its arms sales to Saudi Arabia with effect from 1 September 2008.