New Zealand Tops TRACE Anti-Bribery List

TRACE International has posted its latest annual ranking of bribery risk in countries around the world, and good news if you’re working in New Zealand — Kiwi Country poses the lowest risk that government officials there will hit your company with a shakedown.

Every year TRACE publishes the TRACE Bribery Matrix, a ranking of 200 countries based on the likelihood that companies doing business there will be asked for bribes by government officials. It is one of several bribery rankings published by NGOs that companies use to help organize their anti-corruption and due diligence programs.

Source: TRACE

Behind New Zealand were (in order) Sweden, Norway, Denmark, and Finland. (So not only are Scandinavians terribly good-looking; they’re also really ethical too.) The United States ranked 18th. Canada, America’s largest trading partner, ranked 10th. Other trading partners were considerably lower: China, 151st; Mexico, 133rd; and Japan, 26th.

A country’s overall score is based on four criteria:

• opportunity: the extent of business interaction required with government officials:
• Deterrence: the country’s ability to deter bribery and prosecute offenses;
• Transparency: how transparent dealings with the government and civil servants are; and
• Oversight: the ability of the public and press to monitor and expose corruption.

TRACE first began the survey in 2014, but tweaked its methodology this year, so year-over-year comparisons are less accurate this time around.

Perhaps surprisingly, countries such as Singapore, Hong Kong, and Estonia all had lower scores than the United States, which means they ranked higher as low-risk jurisdictions. All were found to have less risk in terms of opportunity and deterrence, although the United States scored better on transparency.

The average global score was 50, and the biggest group of countries (82) fell into the moderate risk category, One example from the moderate risk group is Russia, which ranked 108th with an overall score of 54. The biggest threat for bribery in Russia is the opportunity category: that is, businesses working in Russia must interact with the government or state-owned interests all the time.

Source: TRACE

Fifty-nine countries were classified as high risk, including China. China was slightly riskier than Russia in the first three categories, but showed far greater risk of public or media oversight: difficulty in uncovering corruption and holding corrupt officials accountable.

TRACE pegged Somalia as the riskiest place in the world to do business— dead last in the rankings at 200. Somalia had the dubious honor of getting the highest possible score (meaning the greatest risk of bribery) in the transparency category. It scored 100 for transparency of processes, like procurement or payments for natural resources, as well as transparency of government interests. The other countries rounding out the worst five were Libya, Venezuela, Chad, and Turkmenistan. No surprises there.

The purpose of the bribery risk rankings is to help companies assess the risk they face of bribe demands from public officials overseas. New this year is the TRACE Matrix Data Browser, a free online tool that allows compliance officers to dig deep into subcategories to find patterns or particular concerns. The goal is helping compliance officers tailor their efforts to the specific risks they face in each country.