Corruption

 "The cost of corruption equals more than 5% of global GDP ($US 2.6 trillion) each year." Around ONE TRILLION dollars is paid in bribes every year.

Corruption is the abuse of power, done in secret. It's damaging to the society, not acceptable by legal, moral or ethical ways.The economic and social effects of this type of corruption are far-reaching. Bribery and corruption can:

• Obstruct economic development
• Undermine the rule of law
• Weaken trust in public institutions
• Allow organized crime to flourish

Bribery and corruption are regarded as crimes throughout the world.

Anti-bribery and corruption laws and regulations govern our behaviour at home and abroad.

Consequences for companies and individuals can include:

• Penalties
• High fines
• Reputational damage
• Repayment of profits
• Redress to victims
• Loss of license to operate

Four types are:

• Country, Location or region based
• Industry based
• People or Relationship based
• Situation or activity based

Each year, the global not-for-profit organization Transparency International publishes a CPI, which ranks countries/territories by their perceived levels of corruption, as determined by expert assessments and opinion surveys.

In 2020, the CPI ranked 180 countries/territories on a scale from 100 (very clean) to 0 (highly corrupt). No country has a perfect score, and over two-thirds of countries/territories score less than 50. This indicates a serious, worldwide corruption problem.

The CPI data is not perfect, but it does help us, as organizations and individuals, assess the risk of doing business in various locations around the world.

Just because a country has a good CPI score doesn’t mean you can ignore the risks.

Things you need to watch out for include:

• An absence of effectively implemented anti-bribery legislation.
• A failure of the foreign government, media, the local business community, or society at large to effectively promote transparent procurement and investment policies.
• Different levels of bureaucracy – for example, at town, state, and country level.
• If you work in a high-risk region or country, you must be aware of how to mitigate the heightened risks, and proceed with caution.

We are the most important control against bribery and corruption. 

• Speak up
• Listen
• Observe

In 2020, one of the world's largest investment banks agreed to pay more than $2.9 billion (yes - billion) to resolve charges that it violated the anti-bribery, books and records and internal accounting controls of the FCPA, setting the record for the highest fine to date in an FCPA case.

The investment giant paid bribes to high-ranking foreign government officials to secure lucrative contracts. They did this through a 3rd party intermediary who used a sophisticated scheme of shell companies to funnel the money for the bribes to the officials and for personal use. The firm was charged with violating the antibribery, internal accounting controls, and books and records provision of the FCPA by obscuring the transactions and covering up what the money was used for.

Enforcement trends remain robust, and it is critical for companies to keep accurate books and records of all transactions.

We work with individuals who are known as "politically exposed persons," or PEPs.

Usually these are officials affiliated with foreign political parties, or individuals associated with corporations owned or operated by a foreign government.

Titles alone don’t identify a person as a PEP, as governments are organized differently in each country.

So consider other factors such as official responsibilities, the type of authority they have, and their access to government assets.

Because of their influence, it is recognized that many PEPs are in positions that can be abused for the purpose of committing money laundering, bribery and corruption, terrorist financing, and other unlawful activities.

Therefore, having dealings with PEPs is high risk. So it’s our responsibility to be aware of the PEP status of our customers or potential customers.

There should be strong, External and Internal policies against corruption.

Remember:

• Bribery and corruption are crimes. Once detected, or even suspected, they must be acted upon.
• You are a key player in our defence against bribery and corruption.
• It doesn't matter whether you are directly or indirectly involved; your responsibility is the same.