'Extradited at a moment's notice': is it time to be afraid of doing business in America?

As the 'NatWest Three' strike a plea bargain, Tessa Thorniley looks at a law that seems loaded against UK citizens accused of white-collar crime
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The Independent Online

Britain's "iniquitous" extradition arrangements with the US are back in the spotlight after three UK bankers pleaded guilty to wire fraud as part of a deal with American prosecutors aimed at slashing their prison terms.

The decision by the trio Giles Darby, David Bermingham and Gary Mulgrew, known as the NatWest Three to strike a plea-bargain comes after a lengthy and controversial legal battle that has left the British Government facing accusations that it is failing to protect its own citizens and is exposing them to a justice system, in the US, that does not achieve justice in every case.

To date, the furore has centred on the Extradition Act 2003, with lawyers, opposition politicians and members of the business elite decrying it as one-sided because Britain has lower hurdles to extradition than the US and is able to send alleged white-collar criminals abroad without showing evidence.

Despite a legal battle in the House of Lords and European Court of Human Rights, the NatWest Three ex-employees at Greenwich NatWest, the investment banking arm were extradited to the US last year.

They were indicted in 2002, after the collapse of Enron, for their part in a fraudulent deal with links to the Houston-based energy-trading group.

Now, however, the case is fizzing with fresh controversy over the deal struck with the US authorities not least because lawyers expect Britain to make plea-bargaining a feature of the legal system in the next few years.

Trish Godman, the mother of Gary Mulgrew, said last week that her son was "coerced" into pleading guilty.

The trio were facing 35 years or more in a US jail and crippling legal bills. After pleading guilty to one count of wire fraud each, they are now expected to spend three years in prison, with the prospect of serving most of the time in the UK.

It is a point regularly cited that 96 per cent of those charged with a federal offence in the US plead guilty before trial.

Luke Tolaini, an associate director at legal firm Clifford Chance and chairman of the CBI's working group on extradition, says that faced with America's draconian sentencing policy which is particularly harsh on white-collar crime "it was inevitable the three would strike a deal".

In the meantime, there are several other high-profile extradition cases, including Ian Norris, the former chief executive of engineering company Morgan Crucible, accused of price-fixing, and Jeremy Crook, former vice-president of Peregrine Systems, facing charges over alleged accounting irregularities. These cases have heightened concerns and led to a major campaign to push through amendments to the Extradition Act 2003.

The CBI claims the treaty enabling the US to extradite UK citizens without having to provide "prima facie" evidence is iniquitous. Rod Armitage, head of company affairs at the business group, says that inequalities need to be addressed: "Under the old extradition act, the UK requirement had been lower than the one the US applied. Now it's the other way round."

He adds that under the existing arrangement, American citizens are guaranteed minimum rights under the US constitution and some evidence-based information (relating to probable cause) must be provided to the US courts before a citizen can be extradited. "This doesn't happen in the UK. A US citizen gets a hearing; a British one does not".

British businesses, he continues, are particularly concerned about the arrangement as "people can be extradited at a moment's notice for quite technical crimes".

"An email sent from the UK via a US internet server would be considered to be within American jurisdiction. Depending on the content of the email, that could be wire fraud."

Tolaini points out that the propensity of US prosecutors to "come and get" foreigners accused of white-collar crimes, is a further cause for concern.

An extradition lawyer who asks not to be named says: "A US federal prosecutor is a political appointment; it's about how many scalps they can claim."

Although some argue that the Act was largely conceived to help in the fight against global terrorism, others argue that the Government was well aware of the implications for white-collar crime from the outset.

Since the Act was introduced in 2004, many more UK citizens have been extradited to the US than have flown the other way. Out of 97 requests by the US, 52 have been granted; the UK has made 26 requests and 17 US citizens have been sent here. The Home Office claims this proves that the Act is working fairly. "Around the same percentage of requests have been met both ways," says a spokesman.

Lawyers, though, point out that not a single IRA suspect has so far faced extradition to the UK, suggesting that the judicial process is being used selectively and politically.

A possible amendment to the Act had been conceded by the Government last year that might have helped businessmen accused of white-collar crime overseas. The change, tabled by opposition MPs, would have allowed the Home Secretary to refuse an extradition request if a "significant part of the conduct alleged to constitute the extradition offence is conducted in the UK".

This modification, known as the "forum amendment", would have needed approval by both houses in Parliament and it was agreed that no attempt to seek approval would take place for a year. When the hiatus ended on 8 November, the Government was quick to to announce that it had no plans to introduce the forum as it would have made the Extradition Act 2003 "inconsistent not only with the US-UK treaty but also with the UK's extradition arrangements with other territories".

Alistair Graham, a partner at White & Case who is acting for Norris, is among the lawyers and opposition MPs calling for the Government to amend the Act. He is still pushing for change.

"It lies within the Government's own hands to address the widespread concerns that business has by activating the forum amendment, which it accepted during last year's debate on the Criminal Justice and Extradition Act," he says.

The shadow Attorney General, Dominic Grieve, says the forum amendment needs to be looked at again and debated.

"I have tabled an amendment to the Crime and Justice Bill to have forum discussed to bring this issue back."

In the meantime, as one extradition lawyer puts it: "Everyone who does business in the US should be afraid of this Act."

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