Corruption Perceptions Index 2020 – a European perspective

On 28 January 2021 Transparency International Launched the 2020 edition of its Corruption Perceptions Index (CPI), which ranks 180 countries and territories by their perceived levels of public sector corruption, according to experts and business people. The CPI is a helpful tool for businesses and public sector organisations to use in assessing the corruption risk level of the public sector in a particular jurisdiction.

A novel and significant factor impacting this year's results is the COVID-19 pandemic, which, according to Transparency Internal, “is not just a health and economic crisis, but a corruption crisis as well, with countless lives lost due to the insidious effects of corruption undermining a fair and equitable global response.” ¹

We set out some of the key points, including the impact of COVID-19 upon corruption risks, of this year's report from a European perspective below.

Results

The CPI uses a scale of zero (highly corrupt) to 100 (very clean) to rank countries by their perceived levels of public sector corruption.

The highest scoring European country this year was Denmark, with 88 points, putting it first in the world alongside New Zealand. The other Nordic countries all placed within the top 10 countries globally, as did the Netherlands, Germany and Luxembourg. The UK received an unchanged score of 77, placing it 11th in the world.

There were some notable decreases in scores for certain European countries as compared to the 2019 results. Bosnia and Herzegovina scored 35 points, down from 36 in 2019; Malta scored 53 points, down from 54 in 2019; Poland scored 56 points, down from 58 in 2019. Poland was listed as a country to watch, with the steady erosion of the rule of law and democratic oversight allowing corruption to flourish at the highest levels.² Malta was similarly named as a country to watch on account that fact that it “faces significant corruption challenges and suffers one of the steepest declines in rule of law.”

Impact of COVID-19

Transparency International has highlighted the effect of the COVID-19 upon levels of corruption:

The large sums of money required to deal with emergencies, the need for urgency in disbursing aid or economic stimulus packages and the risk of undue influence over policy responses form a perfect storm for corruption as they can increase opportunities for it to occur, while weakening the mechanisms in place to prevent it.³

Transparency International's analysis highlights that:

• corruption diverts funds from essential services such as healthcare, leaving countries around the world vulnerable and under-prepared to deal with public health crises;
• a lack of transparency in the allocation of resources – a practice positively associated with corruption – weakens the efficiency of crisis responses;
• countries that perform poorly in controlling corruption tend to breach human rights and democratic norms in their management of the COVID-19 pandemic.⁴

In relation to Western Europe and the EU, “the COVID-19 pandemic exposed serious issues related to the rule of law across the region, with corruption further weakening democracies. Although an ambitious EU stimulus package could be instrumental to member states' COVID-19 response, such an initiative is saddled with numerous large procurement processes, subject to strict deadlines and vulnerable to potential corruption and integrity challenges.”⁵

Conclusion

The CPI results highlight that areas of significant risk continue to exist even within Western Europe, notwithstanding the fact that it is the highest scoring region on the CPI when viewed as a whole, and despite ongoing efforts to strengthen Europe's anti-corruption legislation (such as the adoption by Member States of the EU's Sixth Anti-Money Laundering Directive in 2020).

It should be borne in mind that the CPI only relates to risks within the public sector, and that there remains a significant amount of private sector bribery and bribery risk, as demonstrated by a number of high profile cases being brought against companies in the automotive, aviation and banking industries in the last year.

It is therefore important for companies to be aware of such risks when conducting business both domestically and abroad, particularly in light of the increasing prevalence of anti-bribery and corruption legislation with extraterritorial effect. Corruption risks may also be heightened currently as a result of the ongoing COVID-19 pandemic, making it essential for companies to have in place comprehensive compliance frameworks which are informed by up-to-date risk assessments.