PPT Presentation: Corruption (Institute of Money Laundering Prevention Officers, February 2013)

Corruption IMLPO February 28th 2013

Robert Barrington Executive Director, Transparency International UK

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Agenda • Is corruption still a problem?

• Shining a light on grey areas • Best practice • Global corruption trends

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Is corruption still a problem?

Corruption Perceptions Index 2012

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Corruption Perceptions Index

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Corruption Perceptions Index

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Where are bribes paid?

Global Corruption Barometer

6 [Transparency International 2010]

Shining a light on grey areas Four areas where adequate procedures are inadequate

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Grey area 1: Governance • ‘Tone from the Top’ • What is good anti-corruption governance?

• What it is not…what we can learn from the banking crisis – – – – – –

Low board priority Lack of board responsibility Unclear reporting lines Poor response to whistleblowing Perverse remuneration incentives Skimping on resources

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Grey area 2: Risk assessment • Foundation of a good procedure • Conducted at too high a level…

• Failing to capture the real risks • Little buy-in for complex assessment • Not linking with existing procedures

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Grey area 3: Due Diligence • Flows from governance and risk assessment • How far should it go?

• Suppliers, agents, targets, partners • What have we learnt?

– – – – –

The highest risk area is agents Know who they are Know who you can trust Don’t rely on contractual provisions – but don’t do without them Liability can no longer be outsourced 10

Grey area 4: Facilitation payments • What are they?

• Do they matter?

• Can they realistically be stopped?

• Is there an acceptable transition period?

• Will they be driven underground?

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What is best practice?

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What is best practice?

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How well are companies doing?

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TRAC report • Survey of 105 companies globally • Publicly-available data • Scored in 3 categories • anti-corruption systems • organisational transparency • country-by-country reporting

• Maximum 23 points

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TRAC report

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TRAC report – Financial Services

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TRAC report – Financial Services

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Global Corruption Trends

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Corruption - not just bribery • Money laundering • Other corrupt behaviours…

• • • • •

Lobbying?

Political financing?

Facilitating abusive tax avoidance?

Mis-selling?

Exceeding society’s licence to operate?

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Global trends • Legal framework and enforcement • Rise of civil society – India, China, MENA • Social media – open data • Corporate transparency – Dodd-Frank, EU Directive • Tax – secrecy jurisdictions • Government action – G8, G20, OGP, UNCAC • Money laundering – systemic questions 21

Global trends

The moral relativism that traditionally infects multinationals in hot, corrupt countries is going out of style.

Jonathan Guthrie, Financial Times HSBC exits Panama

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www.transparency.org www.transparency.org.uk

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