Transparency International (TI) has published the Corruption Perceptions Index (CPI) 2014.  This is the 20thannual edition of the CPI, which ranks countries according to how corrupt their public sector is perceived to be.  The index is compiled using a combination of polls drawing on corruption-related data and also reflects the views of observers worldwide.  Countries/territories are given a score between 0 and 100, with 0 being highly corrupt and 100 very clean.  A total of 175 countries/territories were rated by TI.  Below we reflect some of the more interesting results from the CPI generally, before focussing on the assessment of perceived corruption in the UK and other key jurisdictions.  

General TI observations

  • As last year, more than two thirds of the countries rated scored below 50.  TI urges action from all countries regardless of their position, noting "Countries at the bottom need to adopt radical anti-corruption measures in favour of their people.  Countries at the top of the index should make sure they don’t export corrupt practices to underdeveloped countries."
  • Denmark maintains its top ranking from last year (when it shared the spot with New Zealand).  North Korea and Somalia continue to share last place in the updated ranking. 
  • The biggest downward mover was Turkey (down five points) reflecting a number of stories this year involving corruption within the highest levels of business and government.  Each falling four points were Angola, Malawi and Rwanda and – particularly interestingly – China (see more on this below).  A number of these falls occurred despite economic growth within the countries in question.
  • The biggest improvements (by four or five points) were made by Côte D'Ivoire, Egypt, Saint Vincent and the Grenadines, Afghanistan, Jordan, Mali and Swaziland.

What the CPI says about the UK

  • The UK retained last year's ranking at 14th, scoring 78, up two points from last year.  This gradual progress was, in part, credited to the effectiveness of the Bribery Act. TI warned, however, against complacency, noting that the UK should be in the top ten.  TI recommendations for the UK include stronger regulation of the "revolving door" between Government and the private sector and the extension of the authority of its Anti-Corruption Champion to cover corruption within the UK as well as overseas.  In the context of recent corruption scandals in horse racing and FIFA, TI found that the British public now view sports as the second most corrupt sector in the country (following political parties).  Their recommendations therefore include an independent enquiry into sport corruption commissioned by the UK governing bodies of major sports. 

What the CPI says about key regions/countries

  • The Asia Pacific region was found to lag behind in efforts to fight corruption in the public sector, with 18 out of 28 countries scoring less than 40 out of 100.  In particular, China's score fell to 36 in 2014, from 40 in 2013, despite a two-year anti-corruption campaign by the Chinese government targeting corrupt public officials.  Issues include the need to follow the proceeds of corruption hidden overseas, for example, in offshore companies or trusts, after files leaked in January 2014 allegedly revealed 22,000 offshore clients from Hong Kong and China, including close relatives of top Chinese leaders. Recent corruption prosecutions brought in China are stated by TI to be largely perceived as efforts to clamp down on political opponents of the regime as opposed to genuine anti-corruption commitments.  Ablog post on TI's website purports to identify reasons why corruption in China is getting worse. For further information on anti-corruption developments in this region, please see our Asia Pacific Anti-Corruption Report from our leading APAC anti-corruption team.
  • India's score has risen from 36 to 38 in the 2014 results, although this remains low.  Corruption remains one of the country's biggest challenges despite a new leadership pursuing an anti-corruption drive, including new legislation in January 2014 aimed at the more effective implementation of the United Nations Convention Against Corruption and the prompt and fair investigation and prosecution of cases of corruption.
  • Despite some movement for individual countries, results for sub-Saharan Africa overall remain low, with the majority of countries scoring less than 50 percent.   
  • No change or slight improvements were noted in many European Union countries, in part attributed to stabilisation of the economic situation.  However, a number of scandals in "old Europe" (France, Spain and Italy) were noted, as well as the higher index scores of eastern European countries such as Turkey and the Ukraine.  

Implications for industry

The CPI remains a useful tool, notwithstanding the subjective nature of its measure of the perception of corruption rather than of corruption itself.  Companies will no doubt continue to use the CPI to inform their assessment of country risk, as part of their "adequate procedures" against bribery.  In terms of a more objective analysis the OECD Foreign Bribery Report, which was also presented this week, seeks to analyse overseas bribery offences with reference to actual enforcement actions.  Further analysis on this is captured in ourbriefing