Often spoken about as partners in crime (pun intended), bribery and corruption are not the same.  

Corruption is the umbrella term for various activities conducted by those in positions of power, quite often those with political power, by abuse of those powers entrusted to them.  Bribery is, perhaps, the most commonly cited form of corruption but the concept of corruption is much wider and is not restricted to the politerati.

Fundamental to identifying and mitigating corruption risk is an understanding of corruption in its various guises.

A particularly hot corruption topic is that of graft – where those in political authority use that authority for personal gain.  This might take the form of diverting state assets for personal use, awarding state contracts to cronies and family-owned business or by activities such as rezoning development land from commercial to residential to benefit from the higher returns on residential development.  

The UK is currently under a great deal of scrutiny by anti-corruption bodies such as Transparency International for its role in laundering the proceeds of graft by foreign politicians leading to significant changes in UK law to help identify property with illicit origins (see Unexplained Wealth Orders and the Criminal Finances Act 2017)

Corruption may be termed as ‘petty corruption’ such as the waiving of a speeding ticket for a small payment – although this could lead to bigger issues should an accident happen as a result of excessive speed; or corruption may be termed as ‘grand (political) corruption’ whereby the effects are significant e.g. changing or implementing laws to benefit from that change, e.g. passing a law to grant immunity from prosecution for MPs under investigation for corruption

Corruption also occurs in the procurement process, where kickbacks might be offered or provided to secure contracts e.g. for the provision of services or might be requested in return for favourable treatment.

As probably the most recognised form of corruption, bribery can take many forms and is not restricted to cash payments in brown paper envelops.  A bribe is anything that might ‘induce’ improper performance and can take the form of, for example, gifts and hospitality, providing employment for a family member or making introductions to (other) influential people.

In some instances, jurisdictions take a different view on what constitutes ‘corruption’ with ‘facilitation payments’ causing divergence between UK and US law with the US Foreign Corrupt Practices Act seeing them as ‘grease’ payments to expedite a process and permissible as long as they are recorded in a firm’s books and records; and the UK taking a much harder stance and deeming them impermissible as a form of corruption.  Understanding differences in jurisdictional law is essential to avoid the commission of a corruption offence, as is understanding the reach of jurisdictional law which, in respect of the UK and the US, is extraterritorial in reach.

Most forms of corruption have the common themes of secrecy, collusion and personal gain which can provide those in the regulated a thread to pick at in terms of detecting the proceeds of corruption – if they are empowered to recognise them.  Firms therefore must understand and be able to identify the risk indicators for dealing with the proceeds of corruption and have in place adequate procedures to deter the commission or perpetuation of corrupt activity internally.

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