Foreign backed joint ventures are corruptly stealing contracts away from British firms, a source alleged

Around the world British companies are struggling to compete with their foreign counterparts, who bid for the same overseas contracts, because these businesses receive illicit support from their own governments, a senior intelligence source told StrategicRISK.

The situation creates an uneven playing field with British companies being heavily outsold—in particular by the German arms industry, but also by government backed joint-ventures in other sectors as well, explained Stuart Poole-Robb, chief executive officer of KCS Group.

Some of the tactics that certain countries deploy to assist their own companies’ bids for contracts are alleged to include extortion, bribery and corruption.

Specifically in the arms trade a number of contracts involving German companies were reached under an old legal regime that allowed the offering of bribes and inducements—called “useful expenditure”. This gives German companies an important advantage in negotiating new deals, said KCS.

Such deals are also believed to encourage spin-off trade in other sectors. A recent agreement between a German consortium and Aabar, the Abu Dhabi Investment Company, is expected to establish a manufacturing plant in the UAE producing tens of thousands of cars and trucks.

“British companies cannot compete because of their rigid adherence to the rules,” added Stuart Poole-Robb. “Their hands are tied, and they have acquired a reputation for naivete.”