A lot has happened since last International Anti-Corruption Day.
We saw the UK plunge to its lowest ever position in Transparency International’s Corruption Perceptions Index. Shortly afterwards, the Wolfsberg Group re-wrote the rulebook for establishing an effective anti-corruption programme in the financial services sector.
However, all of these developments have been covered by us in previous pieces over the course of 2023. That’s why, this International Anti-Corruption Day, we’re looking ahead to 2024, and setting out what we think will be the hottest topics in anti-corruption compliance for the year to come.
1. Slow Progress in the UK: A revised strategy focusing on public-sector interactions
At the time of writing, announcements on the UK’s long-awaited UK Anti-Corruption Strategy, covered by us in a previous piece, have been delayed amid a shift in focus towards the new failure to prevent fraud offence. The related position of UK Anti-Corruption Champion also remains vacant.
However, 2024 could see the UK Government raise the bar on anti-corruption significantly, as it seeks to separate itself from the public-sector corruption scandals of the past, and set out its stall of integrity-related commitments in the run-up to next year’s election. Reinstating both the Anti-Corruption Strategy and the Anti-Corruption Champion would be an obvious way to do so.
If the Government fills these gaps in the near future, as anticipated, there are various predictions regarding what the updated Anti-Corruption Strategy might contain. These predictions include: increased incentives for whistle-blowers, compensation for states affected by the corrupt actions of UK businesses abroad and, tellingly, stricter controls on lobbying activities undertaken by private actors as part of their interactions with UK public officials.
Of these predictions, stricter controls on lobbying activities perhaps have the potential to bring the most significant short-term impacts for the private sector.
The UK’s domestic lobbying legislation has not changed significantly since 2014. Since that time, various lobbying scandals have emerged, in which private actors have been able to exert significant influence on the public sector while appearing to stay within the confines of the law.
If it focuses on the regulation of private-sector interactions with public officials, as anticipated, the Anti-Corruption Strategy has the potential to start closing these loopholes, meaning that organisations with a significant public-sector nexus may need to adapt their lobbying controls.
2. Pushing Ahead in Europe: A unifying directive on anti-corruption standards and enforcement
Even if change is slow in the UK next year, there should be no shortage of developments in Europe, as the European Proposal for a Directive on Combating Corruption takes shape between now and April.
The Directive, proposed by the European Commission earlier this year, will be the subject of a future piece by our team as soon as its implications for financial institutions are more clearly defined. However, a few of its intentions are already apparent and have the potential to shape the anti-corruption debate on the continent over the course of the coming year.
The proposed legislation will require member states to establish specialised anti-corruption bodies and ensure that enforcement agencies have the tools and the teeth they need to fight corruption effectively. This chimes with the alarm bells raised by Transparency International whose recent publications have decried the lack of resourcing at anti-corruption enforcement bodies across Europe.
It also calls for a standardisation of the sanctions, aggravating factors and mitigations applied to corruption cases across member states. This levelling of the playing field may be designed to counter the growing threat of “forum shopping”, in which organisations or individuals engaged in multi-jurisdictional scandals aim to have their case heard in the country they believe will be most lenient.
Finally, the proposed legislation also intends to introduce new minimum rules on statutes of limitations. This aspect of the directive will help to ensure there is sufficient time available to bring corruption cases to justice, regardless of the member state in which the case is heard.
Although the exact focus of the legislation may change in the coming year, what emerges from this small number of examples is a focus on enforcement. As member states enact legislation to comply with the Directive, we could see an increasing number of enforcement cases, incentivising an overall uptick in the compliance controls implemented by private sector organisations on the continent.
3. Keeping Pace with Developments Worldwide: Anti-corruption as part of our broader geopolitics
Finally, from a global perspective, the past year has taught us that our broader geopolitics can pivot on a knife-edge, bringing swift and significant implications not least in the area of corruption risk.
Global conflicts and the climate crisis are accelerating and contributing significantly to the kind of economic uncertainty in which corruption thrives. Even a post-conflict environment would bring significant implications from a corruption perspective, with financial institutions striving to ensure re-development efforts are not hindered by misappropriation of funds in highly fragile economies.
These broader trends reinforce the need for private-sector organisations with a global presence to adopt robust systems for both horizon-scanning and continuous monitoring of inherent risk.
With major geopolitical developments apparently happening more quickly and more frequently, it will be necessary for these organisations to look simultaneously at an increasing list of external risk factors, while also monitoring the ability of their on-the-ground controls to mitigate them.
What happens next
Through the UK’s Anti-Corruption Strategy and Europe’s Anti-Corruption Directive, we can expect to see a notable increase in government-level commitments on corruption in 2024.
The challenge for these legislators will be to ensure that their commitments keep pace with broader developments in our global geopolitics, which have the potential to increase the level of inherent risk.
While we wait for these commitments from the public sector to take shape, private-sector organisations can already be sure that 2024 will put the spotlight back on corruption. Organisations hoping to stay ahead of these developments may wish to conduct a health-check on their existing compliance programme, to ensure it adequately reflects emerging risks and anticipated areas of legislative scrutiny.
Only with a suitably forward-looking compliance programme can private-sector organisations hope to avoid falling behind, during what promises to be an eventful year in the fight against corruption.
For more information on how we are helping our clients to meet the demands of developing anti-bribery and corruption laws, please contact Simon Stiggear, Michael Pollitt or Gina Burley-Staffieri.
