Russian Entrepreneurs on the Red List


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Photo Credit: Taylor & Francis Group

“In contemporary Russia, entrepreneurs might be considered an endangered species,” writes former CIPE intern and current research scholar at George Mason University Yulia Krylova in her new book, Corruption and the Russian Economy: How Administrative Corruption Undermines Entrepreneurship and Economic Opportunities. Just as endangered animals are threatened by poachers and environmental conditions, Russian entrepreneurs face asset seizure and a hostile business climate.

The issues Krylova describes are not new or unique to Russia. Krylova’s research supports existing literature about the relationships between corruption and entrepreneurship, regulatory agencies, gender, and Russia’s recent past. She also builds on research that focuses not on bribe-takers but rather bribe-payers, who are not culturally predisposed to want to pay bribes to get ahead, but rather must pay bribes to ensure their basic property rights. Krylova’s scholarly contribution is an overview of Russian entrepreneurs’ corruption problems.

Two chapters are devoted to how public officials grab assets from business people.  Read More...

Armenia is Due a New Due Diligence Report



Photo Credit: PanARMENIAN

“In Armenia there is now no corruption,” boldly declared newly elected Prime Minister Nikol Pashinyan. While this is an exaggeration, early, anecdotal evidence shows that corruption in Armenia has decreased since Pashinyan’s Velvet Revolution this spring. This means investment in Armenia may be less financially and legally risky from corruption. Western companies may want to take a fresh look at potential Armenian partners and business opportunities in the country.

Major corruption indexes have not yet quantified these changes. Data from 2017 and 2018 show that corruption in Armenia posed a significant problem to businesses. Nearly a quarter of survey respondents admitted to paying a bribe in 2017, on par with the world average. For years, multiple corruption ratings for Armenia have stagnated close to the average for Eurasia. Observers should watch these indexes over the next year to see if evidence of reduced corruption emerges.

Over the last decade Armenia enacted modest reforms, improving its anti-corruption laws and limiting citizen and business contact with government, which theoretically decreased the risk of corruption.  Read More...

Ten Ways Washington Can Confront Global Corruption


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Photo Credit: Waging Nonviolence

This article was originally published by the Carnegie Endowment for International Peace:

A former U.S State Department official with a unique vantage point on global anti-corruption efforts wrote a visionary essay on what governments, civil society, and business can do to build upon current momentum. In her blog for the Carnegie Endowment for International Peace, Abigail Bellows laid out a roadmap for consolidating efforts, breaking down silos, and generally streamlining work in the anti-corruption field. Her approach is grounded in optimism, as well as an intimate knowledge of the sphere’s many players and their capacities.

In 2018, public anger and legal action over corruption have toppled political leaders in Malaysia, Peru, Slovakia, South Africa, and other countries. This is an acceleration of a documented trend: more than 10 percent of nations around the world have experienced corruption-fueled political change in the last five years. And these cases of peaceful transition represent the best-case scenario; elsewhere, corruption has fueled terrorist recruitment and sparked violent insurgencies.  Read More...

Shruti Shah Discusses the Development and Promotion of Ways to Combat Corruption


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Photo Credit: CIPE

On the latest edition of CIPE’s Democracy that Delivers podcast, Shruti Shah, President and CEO of the Coalition for Integrity, discusses the growing demand for ethics & accountability around the world, and the role of the Coalition as they execute their mission.

Shah illustrates her lifelong commitment to fighting corruption, and elaborates on the Coalition’s mission to promote greater transparency and accountability, and looks forward at the positive changes to come in ethics, compliance and integrity programs.

Four important points laid out by Shah in regards to how organizations can set a good culture of compliance:

1. Make sure there are (anonymous) reporting mechanisms
2. Set good incentives and discourage bad incentives
3. Ensure disciplinary measures
4. Accountability

This special Democracy that Delivers podcast is part of an ongoing series organized by CIPE’s Anti-Corruption & Governance Center.

Check out the podcast below!


The IMF Joins the Fight against Corruption


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Photo Credit: Thai E- News

The International Monetary Fund (IMF) made its first major updates to its policy towards corruption since 1997. This update is largely viewed as a response to Transparency International’s (TI) letter on anti-corruption compliance shared at the Civil Society Townhall during the IMF’s 2017 Annual Meetings. The IMF published a new framework on anti-corruption compliance and promised engagement with all its member countries during a roundtable call on July 2nd.

During the July 2nd meeting, the IMF also stated a new commitment to including evaluations of corruption in member countries in the reports produced by staff. This significant shift in policy demonstrates an explicit acknowledgement of corruption’s macroeconomic impact. Two existing examples of this approach can be seen in the latest lending agreements with Argentina and Ukraine.

For observers, it remains unclear whether the IMF will limit lending due to widescale public graft and corruption. “To refuse to lend because of a corrupt country environment is tough, but the IMF has that sort of leverage, and it seems that management at the fund is taking corruption compliance more seriously,” commented Richard Stern, a retiree of the World Bank and current President of the Partnership for TransparencyRead More...

A Conversation with Arkan El Seblani


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Photo Credit: Arab Forum of Anti-Corruption Agencies & Financial Intelligence Units 

Arkan El Seblani manages the United Nations Development Programme (UNDP) regional anti-corruption initiative in the Arab States. With his experience in private practice as a legal specialist in Lebanon, the United States and Qatar, coupled with more than 12 years’ experience with the UN, Mr. El Seblani brings a level of expertise to his work that uniquely qualifies him to address corruption as well as rule of law issues throughout the region.

During CIPE’s discussion with Mr. El Seblani, he outlined how UNDP supports anti-corruption reform as part of its work to enable the 2030 Agenda on Sustainable Development, including through the actualization of the UN Convention against Corruption: Prevention, Criminalization, International Cooperation, and Asset Recovery. UNDP believes that effectively battling corruption involves many actors across civil society, business and government. UNDP invests in networks and people to create informed demand for a national anti-corruption agenda, while also supporting policy dialogue and targeted training on the supply side.  Read More...

Closing the Feedback Loop through Citizen Engagement


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Photo Credit: Thailand’s Collective Action Coalition against Corruption (CAC)

Bureaucratic red tape and arbitrary decision-making around public services are key conditions that nurture a culture of corruption. Complicated and unclear processes accommodate corrupt practices by creating uncertainties that justify both the demand and supply side of bribery. To effectively mitigate corruption risks, it is essential to improve citizen and private sector feedback to government in public service delivery.

In this regard, Thailand’s Collective Action Coalition against Corruption (CAC) with support from CIPE, developed a platform called “Citizen Feedback” that successfully ran a pilot in autumn of 2017. This platform allows the public to share their opinions on their experience interacting with government service providers, which will ideally lead to a ranking of public offices, similar to TripAdvisor, thus fostering positive competition among agencies.

Anyone can conveniently participate in the Citizen Feedback program by scanning a quick response or ‘QR’ Code located at the agencies they visited.  Read More...

Vinnytsia’s Transparent Office: A Model for Others?


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Photo Credit: Vinnytsia City Council

Corruption in the public sector is a common problem, and exists all over the world. Zimbabwe, Saudi Arabia, China, Brazil, and many other countries suffering from endemic corruption are often saddled with complex bureaucracies, which allow corrupt officials to extract vast sums of wealth from citizens in exchange for processing services (filing paperwork, opening businesses, paying taxes, etc.). These systems distort the market, reduce tax collection, marginalize the impact of the business community, and suppress local business in favor of foreign actors with deeper pockets.

A potential solution to this problem can be found in the city of Vinnytsia in Ukraine. No stranger to endemic corruption, Ukraine has undergone various reforms since the Revolution of Dignity in 2014. The Revolution of Dignity was the popular uprising against their corrupt President Viktor Yanukovich, and ultimately led to the Russian occupation of Crimea, and the ongoing conflict with Russia and its proxies in the Donbas region.  Read More...

Your Supply Chain Is As Strong As the Weakest Link – Part II


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Photo Credit: ITprogBlog

This article originally appeared in the TFM Magazine, Volume 2 Number 13, 2018, p. 32 – 35.

Read Part I here

Empowering through knowledge

One of the most identified risk areas for organisations regarding corruption is third-parties acting on behalf of their organisation. In many cases, a third-party is an SME supplier either working independently on behalf of the larger, more established, organisation or as part of a joint venture agreement.

It is imperative that due diligence is done on all third-party representatives as the UK Anti-Bribery Act extends to organisations that do not have the necessary processes in place to prevent corruption.

Therefore, for a larger, more established, organisation to protect itself, third-party representatives must be educated on the expectations the larger organisation has, with clear guidelines on how business should be conducted. For example, a joint venture agreement must be a legally binding contract with expectations and areas of accountability clearly stated.  Read More...

SCCE’s new CEO Gerry Zack talks Compliance with CIPE


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From left to right: Anna Kompanek, Gerry Zack, and Ken Jaques

CIPE’s Democracy that Delivers podcast host Ken Jaques and CIPE’s Director of Global Programs Anna Kompanek, sat down with incoming CEO of the Society of Corporate Compliance and Ethics (SCCE), Gerry Zack. Zack discusses how fraud and compliance have evolved over the last 30 years. Prior to joining SCCE, Zack spent his career providing services involving the prevention, detection, and investigation of fraud, corruption, and noncompliance.

Check out the podcast below!