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Compliance Professionals Should Take The Corruption Perceptions Index With A Grain Of Salt

In an annual non-event, last week Transparency International (TI) released its so-called Corruption Perceptions Index (CPI) (see here [1]). The CPI scores 180 countries and territories by their perceived levels of public sector corruption, according to experts and business people. 100 is very clean and 0 is highly corrupt.

According to TI, the CPI 2019 “reveals a staggering number of countries are showing little to no improvement in tackling corruption.”

The CPI generates a lot of media coverage and is a popular tool for business organizations in ranking risk (and thus prioritizing compliance). However, for the reasons highlighted in this post compliance professionals should take the CPI with a grain of salt.

For starters, just because compliance professionals should take the CPI with a grain of salt, does not mean that the CPI (or other similar rankings) should be ignored.

Indeed, in a rare appellate court decision in the FCPA space, the Second Circuit in the Bourke case listed circumstances which provided “ample evidence” to support Bourke’s trial conviction on a conscious avoidance theory under the FCPA’s third-party payment provisions and specifically stated that “Bourke was aware of how pervasive corruption was in Azerbaijan generally.”

Nevertheless, query whether the CPI is a reliable or meaningful measure of the specific risks specific business organizations face when competing in the global marketplace for the following reasons.

In short, I enjoy maps and thus each time this year look at the CPI map. However, for the reasons stated above compliance professional should take the CPI with a grain of salt.

[3]

FCPA risk is best minimized through a risk assessment unique to a business organization in which the following questions provide a good starting point.

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