Whoever has been in the financial crime sector long enough knows that corruption uses many words but… corruption.
The title might be thought provoking but I have never seen anyone talking freely and openly about bribery and corruption and it is also quite obvious why; it is illegal.
Most of the times we tend to associate bribery with cash payments, to be made to (foreign) public officials to gather an undue advantage. Without a shadow of doubt cash is the most common asset in illegal transactions , nonetheless, when it comes to corruption, the concept of undue advantage applies also to the receiver, who is not allowed to personally benefit from his status.
It is, therefore, clear that offering, giving or receiving a bribe in other forms rather than cash makes (internal) investigations significantly harder since such transactions may appear legitimate and may not just involve the public official but also anyone close to him. In these cases we have an indirect advantage.
Furthermore, in light of the above, it is also clear that other benefits rather than cash make corruption significantly more sophisticated.
The revolving door public/private is an evergreen, however, there might be situations in the grey area;
- Consultancies, provided by the public official himself, any other physical person close to him or any legal person owned, controlled (even partially with some shares or indirectly) by the said official or any other person associated to him,
- Recruitment, We are not discussing whether a public official may or may not consider a career move in the private sector, however, a job (or consultancies) cannot be a reward.
In particular, whenever there have been close contacts between a public official and the the hiring organization, its internal policies and its code of conduct should impede contracting the public official – nor anyone close to him – for 2 to 5 years afterwards (unless a different timeframe is established by Law).
Such payments should always be subject to enhanced due diligence in order to assess the entity’s beneficial ownership and how these funds are actually spent.
Without questioning anyone good faith, it is also important to appear transparent; if a public official we worked with sits on the board of a charitable entity, better looking for another entity…
While doing business internationally is rather common giving something back to local communities, especially in disadvantaged areas. Although building public infrastructures for the locals is very noble, this practice presents several corruption risks.
In short, infrastructures for public purpose are fine, building or renovating a public official’s villa is not…
Source: Anti-Corruption Digest