Out-Law / Your Daily Need-To-Know

Out-Law News 1 min. read

Businesses urged to consult Corruption Risk Forecast

Businesses now have access to a free new financial crime tool that provides further insight into the level of corruption they might expect to encounter when carrying out business activities across national markets around the world.

Andrew Sackey and Hinesh Shah of Pinsent Masons said the new Corruption Risk Forecast could help organisations identify the level of bribery and corruption risk they face now and in the future in each of the countries they may be operating in.

Sackey said: “This analysis tool is a free interactive resource that levers over a decade of historic data, as opposed to perceptions, and groups them across three indexes as predictors of current and future corruption risks. It is another valuable addition to the portfolio of existing resources compliance officers can consider interrogating when undertaking an analysis of the risks faced by their businesses.”

Shah said: “The Corruption Risk Forecast represents a valuable compliance tool in measuring corruption across international jurisdictions. The model is based both on observed, quantifiable inputs as well as societal enablers and disablers which allows for greater detail on specific corruption measures and predictive metrics to identify how countries are likely to move along the corruption scale in the future. It will be interesting to see the how the tool is used by governments and compliance officers and whether the tool will be complementary or look to replace or augment long-standing measures such as Transparency International’s Corruption Perception Index.”

The Corruption Risk Forecast has particular utility in the context of bribery and corruption laws that have extra-territorial effect, such as the UK Bribery Act 2010 and US Foreign Corrupt Practices Act 1977.

Under the Bribery Act, foreign companies which operate in the UK can face prosecution for failing to prevent bribery regardless of where the alleged activity has taken place, unless the suspect activities are expressly permitted by domestic laws. It is also an offence under the Act to bribe a foreign public official, even if that person has demanded a bribe.

A company will be responsible for bribery carried out by its employees or associated persons without its knowledge or consent, though there is a defence against liability for the offence of failure to prevent bribery if a company can they prove that they have implemented current risk assessments and other 'adequate procedures' designed to prevent bribery.

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