Government Corruption

It takes two to tango to rob national treasuries and undermine global commerce: the government officials and politicians who take the bribes and, of course, the corporations who pay the bribes.

Just how rotten current conditions are is evident from two new reports – Transparency International’s index of bribe taking and a comprehensive OECD analysis of corporate bribe paying.

Transparency International’s 2014 Corruption Perceptions Index (CPI) covering 175 countries reveals that more than two-thirds score less than 50 points on a scale, where 100 is fully clean of corruption and 1 is the very opposite.

Many executives at multinational corporations have long acknowledged the significant risks of doing business with government partners in many emerging market countries, but these are so often offset by considerations of both the very large size and especially the potential of these markets.

The OECD reviewed the cases of 400 corporations that have been investigated for bribing foreign government officials – investigations that took place in some of the 41 countries that signed the OECD Anti-Bribery Convention that first came into force in 1998 and that makes it a criminal offense for a company to bribe a foreign government official.

The OECD said that on average the bribes paid equaled 10.9% of the total transaction value and 34.5% of the profits, equal to $13.8 million per bribe.





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