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Business

Russia’s Rich Top Bribery Index

Russian firms are most likely to use bribes in business, according to a new report published by Transparency International. Against 1999 figures, German firms show improvement.

Ever heard of getting tax back on a bribe? In Germany many have. Until 1999, companies were spared the risk of criminal prosecution for using bribes abroad, and could set bribes against their tax. But all that’s changed now. With the signing of an anti-bribery convention, Germany’s rating has improved in the Bribe Payers Index 2002 (BPI), published on Tuesday by the corruption watchdog Transparency International (TI).

In November 1997, the Organisation for Economic Cooperation and Development (OECD) and five non-member countries adopted a convention to fight bribery of foreign public officials in international business transactions. It’s been ratified by countries like Australia, Sweden, the United Kingdom, the USA, and Japan.

The usual suspects

But Transparency International’s latest findings show that ignorance of the convention is rife. A lot of important economic forces like Taiwan, Hong Kong, Russia and China haven’t signed up. And those very countries – particularly Russia and China – have the highest rates of international corruption and bribery.

The Bribe Payers Index 2002 was conducted between last December and March in 15 emerging market countries, dealing in trade and investment with multinational firms. As many as 835 executives were interviewed, including chartered accountants and people working for chambers of commerce, banks and law firms. They were asked how they perceived multinational firms from 21 countries.

'Underming fair global trade'

There’s been little change since 1999’s Bribe Payers Index. Despite the OECD convention, rich nations are still prone to using bribes to win contracts and business deals. While Australia has the cleanest record in 2002, and the German situation has improved (by a meagre 0.1 percent), South Korea, Italy, Hong Kong, Malaysia, Japan and the United States remain poor performers.

Transparency International Chairman Peter Eigen, who presented the new index in Paris on Tuesday, said part of the problem was that very few firms were actually aware of the OECD Anti-Bribery Convention, and that was a detrimental factor in international trade.

"The governments of the richest nations continue to fail to recognise the rampant undermining of fair global trade by bribe-paying multinational enterprises," he said.

The construction industry is hardest hit by corruption, but the arms trade and energy sectors are also heavily affected. In eastern and central Europe, the biggest emerging economies of Poland and Hungary were surveyed: only two countries in a vast and unstable region, struggling to combat corruption in their drive towards European integration.

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