Forensics & fraud blog

An interesting article in TheLocal.de on a study by Prof. Friedrich Schneider of Johannes Kepler University in Linz, Austria.
The study estimates the loss to the German economy due to corruption to be € 250 billion in 2012, up from a previous estimate of € 220 billion in 2005, when corruption in Germany was at a historic low-point.
That is a whopping €250 billion that could have been invested in genuine economic activity and grown the German economy, but was wasted by corruption and bribery. Given the importance of the German economy for the Euro-zone, this figure should be a concern of all European countries.

Also considering that Germany is ranked 14th on the TI list of least corrupt countries, so the relative problem of corruption loss as percentage of GDP may be even worse in other countries.

Something to think about when considering the stagnant or even declining economic growth in Europe.

Or maybe not, considering the impact the current crisis has on Greek society.

In his post, Luke Balleny explains the impact corruption has had on Greek society and now on the crisis facing Greece.

The 2012 Greek chapter of the Transparency International report on National Integrity System Assessment suggests that the Greek government “acceptance” of corrupt practices has contributed to the current crisis in Greece.

TI’s Assessment of National System Integrity on Greece can be found here: TI – NIS

Considering the impact on the lives of many if not most Greeks, and the contribution to the current crisis of the corruption in Greece, we must conclude that corruption is in fact not a victim-less crime.  The consequences may not be immediate or clear to most, but as this case teaches us, there almost always are consequences to be paid.

Fighting corruption, both by preventative measures and controls and by investigating and exposing corruption post-fact, is crucial to the smooth operation of the economy as a whole. And if you need more convincing of the real-world impact, just look at Greece today and the draconian budget measures that they have to implement.

With the 2012 World Economic Forum in Davos just behind us, Transparency International reflect on some of the evolutions in the global corporate community in terms of transparency, corruption, bribery and perception of people around the world.

TI sees the need for companies to consider new approaches and new business models in light of the persistent global economic woes and ever growing public dis-trust in corporations around the world.

Well worth the read: TI – Corporate Transparency: Old Problems and New Ideas

UK Bribery Act: the British act against corruption is not something that Belgian business can just ignore.

UK Bribery Act press release PwC

The Bribery Act 2010 received Royal Assent on 8 April 2010 and came into force on 1 July 2011.  In addition to the two offences of active and passive bribery (paying and receiving bribes respectively), two specific offences are covered:

• Bribery of an overseas public official; and
• A corporate offence of ‘failure to prevent’ bribery.

With the Bribery Act the UK has one of the strictest anti-bribery regimes in the world and its reach is even broader than the US Foreign Corrupt Practices Act.

What do you need to do?

As the Bribery Act will have implication for all businesses that are incorporated in the UK and for the businesses that carry on all or part of their business in the UK, it is of utmost importance to have a fully integrated and effective anti-corruption program.

In many ways the introduction of the Bribery Act could require a fundamental reassessment of the risks that a company is running and how those risks are addressed.