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ARC: A WORLD OF RISK: MANAGING FOREIGN BRIBERY AND CORRUPTION EXPOSURES

Russian, Chinese firms most likely to pay bribes: Trade group

Companies based in Russia and China are among the most likely to pay bribes to officials in foreign countries, according to a survey of more than 3,000 business executives worldwide.

The survey, released Wednesday by the Berlin-based global trade watchdog group Transparency International, polled business executives on the perceived frequency of corruption and bribery among companies in 28 of the world's leading exporting countries, based on their interactions inside those countries.

Russia and China—which represented a combined $554.3 billion in direct foreign investments abroad in 2010, according to the CIA's “World Fact Book”—were identified as the two countries whose businesses were most likely to bribe foreign officials.

Companies in the Netherlands and Switzerland were ranked as the least likely to engage in bribery. The United States ranked 10th on the list of 28, behind the United Kingdom and Singapore (tied for 8th) and ahead of France.

The survey respondents were also asked to rank the frequency of foreign bribery according to industry sector and the type of bribe being paid. Agriculture, light manufacturing, civilian aerospace and information technology were ranked as the industries that draw the most bribery activity abroad.

In addition to bribes paid to low-level public employees and high-profile elected or appointed officials, Transparency International's 2001 survey also tracked for the first time the perceived frequency of bribes paid between private companies.

The results of the survey were released ahead of the Group of 20 (G20) summit in Cannes, France, later this week. The group comprises 20 leading world economies that agreed in 2010 to launch an anti-corruption action plan to combat foreign bribery.

In a statement released with the survey on Wednesday, Transparency International Chairman Huguette Labelle urged leaders in G20 countries to pass legislation and ramp up enforcement of anti-bribery laws.

“New legislation in G20 countries is an opportunity to provide a fairer, more open global economy that creates the conditions for sustainable recovery and the stability of future growth,” Mr. Labelle said.

“It is clear that bribery remains a routine business practice for too many companies and runs throughout their business dealings, not just those with public officials,” Mr. Labelle said in his statement. “And companies that fail to prevent bribery in their supply chains run the risk of being prosecuted for the actions of employees and business partners.”

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