The Corruption Perceptions Index (CPI) results came out at the end of 2017. Transparency International produces the CPI which ranks countries and territories across the globe for the perceived level of corruption in the public sector. The index does not measure actual corruption, but merely the perception of it. The results are produced using opinion surveys and expert views. Each country is given a score between 0 – 100. The closer to 0 a country's score is the greater the perception of corruption in relation to it.
The start of 2018 in the UK saw the first successful conviction under s.7 of the new Bribery Act 2010, in which the 'adequate procedures" defence was first tested before a jury. Even with self-reporting and the potential availability of DPAs in the UK, the SFO have made clear that DPAs will not be the standard way of dealing with corruption and bribery offences, this case is an example of that in practise.
The Organisation for Economic Co-operation and Development (OECD) Working Group on Bribery recently completed its Phase 4 evaluation on the UK’s implementation of the OECD Anti-Bribery Convention. The OECD's Report calls for further interagency co-operation within the UK to improve its already high level commitment to combatting foreign bribery and one of its recommendations includes a review of HMRC and its ability to detect and report foreign bribery.
Further, since April 2016 the UK requires companies to provide information about the ultimate beneficial owners of companies. Companies have to maintain registers of People with Significant Control (PSC) in order to improve transparency in respect of the control of UK companies.
In Germany the government has introduced proposals for new fines to deter corruption.
In addition to the developments in Europe, which include the increased use of DPAs in France covered elsewhere in this newsletter, steps are also being taken outside of Europe. In the US, the Department of Justice has announced a revised policy in connection with the Foreign Corrupt Practises Act (FCPA).
The aim of the policy change is to encourage companies to self-disclose corrupt practises and provide an incentive for companies to cooperate with them in respect of practises falling with the FCPA.
Regardless of its relatively unscientific basis, the CPI is taken seriously by regulators and industry bodies alike when assessing what ‘adequate procedures’ are required. Thus when negotiating cross-border contracts, it will be important to conduct a risk analysis which has regard to the target country’s CPI ranking, and ensure that the "adequate procedures", are specifically targeted against the perceived risk.
Further, be sure that you establish who the Ultimate Beneficial Owner of the companies you are working with are. With UK companies this is made easier with the introduction of the PSC register, mentioned above, which lists at Companies House those persons who have significant control of the business.