Survey Finds that Many Companies Fall Short in their Anti-Corruption Compliance Programs

The findings from a 2013 survey of “International Business Attitudes to Corruption” conducted by Control Risks and the Economist Intelligence Unit, two independent international business risks and opportunities consultancy firms, suggest that many companies are unprepared to handle a corruption scandal and have yet to implement best practices for anti-corruption compliance.  The study surveyed general counsels, senior corporate lawyers and compliance heads in more than 300 companies worldwide.

A Synopsis of the Survey’s Key Findings

Pressure to Pay is Biggest Concern and Most Significant Challenge

Of those surveyed, the majority (58%) of respondents stated that their biggest concern is whether their employees will be able to resist the demands for “operational” bribes.  Only 29% cited the “classic” bribe, i.e., demands for bribes to secure contracts, as their main concern.  Operational bribes typically present themselves as demands for small amounts of money, carrying the threat that the company’s transactions --- whether a license application or custom processing --- will be significantly delayed if the company fails to pay.

Most companies cited the difficulty of navigating through the requirements under the U.S. Foreign Corrupt Practices Act (FCPA), the U.K. bribery act and other countries’ anti-corruption domestic laws, as a significant challenge.  For example, while some countries do not prohibit “facilitation payments” that are used when trying to expedite routine government transactions (such as the FCPA), such payments are unlawful under other countries’ laws (for example, under the U.K. bribery act).

Of those surveyed:

  • Only 50% have implemented due diligence procedures when selecting local business associates, despite the known risks that the third party may be paying bribes on their behalf.
  • 35% do not have corporate policies forbidding bribes and 47% do not formally prohibit “facilitation payments”.
  • 91% have no specialized anti-corruption training for employees working in high-risk areas and 74% have no anti-corruption programs in general.

Based on this research, “it [is] apparent that international companies have disturbing gaps when it comes to dealing with the dangers of corruption,” noted the authors of this study.  “Indeed, it would appear that too many companies still fall short of best practice in their anti-corruption compliance programmes ... and may not be prepared properly should they be exposed to a corruption scandal.”

A copy of the “International Business Attitudes to Corruption” report is available here.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.