Transparency International (TI) released its 2020 Corruption Perception Index (CPI) on 28 January 2021.TI has reported that, with an average score of 45, the Asia-Pacific region has struggled to combat corruption and tackle the health and economic impact of covid-19.
TI’s index continues to be an important gauge for assessing corruption risk, and is a helpful tool when doing business in the region. The 2020 CPI ranks 180 countries and territories by their perceived levels of public-sector corruption, according to experts and business people. The CPI uses a scale from zero (highly corrupt) to 100 (very clean). Companies should pay close attention to those countries and regions that score poorly on the index, and identify any compliance risks that may be previously undetected.
TI’s latest report highlights the impact of corruption on government responses to covid-19, comparing countries’ performance in the index to their investment in healthcare, and the extent to which democratic norms and institutions have been weakened during the pandemic.
TI research shows that corruption is more pervasive in countries least equipped to handle the covid-19 pandemic, and other global crises. The research also looked at foreign bribery in the global export space, and found that many countries that export goods and services heavily are failing to investigate and prosecute companies that pay bribes to win business abroad.
In China, and the region generally, given the shifting sands of the business environment brought about by increasing economic pressures and geopolitical tensions, companies need to remain vigilant against risks arising from government touchpoints, and business models that rely upon third-party relationships such as those with agents or intermediaries.
China introduced into its legislation the concept of compliance management on 1 January 2021. This means that compliance policies, robust internal controls and on-the-ground implementation measures remain at the forefront of 2021 priorities.
Highlights of 2020 CPI scores
(a) The Asia-Pacific has an average score of 45 on the CPI, and ranked above other regions such as the Americas (43), Middle East and North Africa (39), Eastern Europe and Central Asia (36) and Sub-Saharan Africa (32);
(b) With a score of 88, New Zealand is consistently one of the top performers on the CPI, both in the region and around the world;
(c) Singapore, Australia, Hong Kong and Japan follow New Zealand closely in the Asia-Pacific region;
(d) China improved on the CPI, increasing by six points, from a score of 36 in 2014 to 42 in 2020; and
(e) Myanmar is a significant improver on the CPI, increasing by 13 points since 2012 to a score of 28 in 2020. Note that these findings preceded the current military coup.
Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Howard Wu (Shanghai) at firstname.lastname@example.org