3  November 2011

The Transparency International Bribe Payers Index, published this week, confirms that there has been no reduction in corrupt practices in most jurisdictions, despite an increased focus on enforcement. Although bribes often relate to business in a developing jurisdiction, in many cases the bribe payer is from an OECD state and corrupt payments are likely to end up in the banking system of OECD states ( or tax havens like the British Virgin Islands, which has a population of 25,000 people but is home to 500,000 international firms, a number growing by 70,000 each year.)

In October, UNDOC reported the annual value of criminal business (excluding tax evasion) was estimated at more than US$2 trillion, with $1.6 trillion of that sum being laundered into “legitimate” assets. This gives support to the Transparency InternationaI recommendation that all countries should be increasing their commitment to the UN Convention Against Corruption and reinforcing their anti-bribery laws. TI identified the need for Germany and Japan (which together with New Zealand are the only OECD states not to be members of UNCAC) to ratify the convention.

An interesting example of the extent of bribery is the US Commission on Wartime Contracting estimate that of US Government spending of $62 billion to rebuild Iraq, $72 billion for Afghanistan and $206 billion for joint logistical support, nearly 25% had been lost to waste and fraud – particularly bribery and kickbacks.

This week the U.K Serious Fraud Office set up a whistle-blower hotline called ‘SFO Confidential’. The SFO Director said: “I want people to come forward and tell us if they think there is fraud or corruption going on in their workplace. Company executives, staff, professional advisors, business associates of various kinds or trade competitors can talk to us in confidence. I have set up a special team to make the SFO readily accessible to whistleblowers, with trained staff sympathetic in dealing with any anxieties people might have about coming forward. I want whistleblowers to feel comfortable about it and use SFO Confidential to help flush out fraud.”

www.unodc.org/unodc/en/press/releases/2011/October/unodc-estimates-that-criminals-may-have-laundered-usdollar-1.6-trillion-in-2009.html 

http://euobserver.com/22/114121

www.thenational.ae/news/worldwide/us-recovers-millions-in-misappropriated-aid

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