This Week in AML
This week Transparency International released its 2021 Corruption Perceptions Index (CPI). The CPI uses a number of criteria to evaluate the status of corruption in 180 countries. For 2021 the global average remained unchanged at 43 on a 100 point scale. John and Elliot discuss some of the findings in the CPI and the links between corruption, deterioration in human rights, the rise of authoritarianism, and the continuing assault on democracy.
2021 Corruption Perceptions Index Released – Things are Not Improving TRANSCRIPT
Elliot Berman: Hi, John, how are you this week?
John Byrne: Good, Elliot. How are you doing?
Elliot Berman: I'm okay, too. Thanks. So Transparency International, who we've talked about before, put out their corruption perception index for 2021. Did you see that release?
John Byrne: Yeah, like you said, we've talked about this before, and it continues to be a very useful tool for our community because as we know, and we're getting that as a focus in the US as a priority that corruption drives financial crime or vice versa.
I think understanding what outside organizations think of different jurisdictions should help, not just in terms of training. Due diligence, you know, what to focus on, where there's progress, where there's decline. So, yeah, useful tool. I think everybody on all sides of the equation respect Transparency International, 180 countries that they look at.
I thought there was some interesting statistics. The overall comment that was made is things aren't going that great. You know, and I think that's something to focus on, and they talk about the top and bottom performers and who's declined who. You know, what were some of the issues, but the bottom line is their overall view is that things have not improved. Particularly during COVID-like, there was hope that it would.
Elliot Berman: Right. So, on a net basis, well, let me do it a different way. So there's 25 countries improved, 23 declined, and 131 stayed the same. So basically, you know, one step to the side on a net basis. It was interesting; even some countries that have been well-positioned in the top group had some noticeable stepbacks, one being Canada.
Based on the criteria that are listed out on this, on the Transparency International website, they moved a minus eight. So they were up pretty high. They were up near 80, but they still took a significant step back, which I think it's more broadly. It's an interesting commentary on the fact that even when you're doing well in one of these difficult areas, maintaining requires vigilance and is not a guarantee.
John Byrne: Right. You know, the Transparency International folks have had sort of ongoing series of recommendations to [inaudible] or, end if you could, the vicious cycle of corruption, which they also say connects with human rights violations and democratic decline.
I thought while they're hortatory goals, they're certainly logical. So, uphold the rights needed to hold power, to account a restore and strengthen institutional checks on power. So they talk about sanctions and anti-corruption agencies, combating transnational forms of corruption, which the US is again attempting to do with naming this a priority.
One that, you know, there might be some pushback on, although it makes sense to me [to] uphold the right to information and government spending. So, you know, if you're spending money in any sort of budget that gets approved by a legislature, how's it being used, and maximum transparency is obviously a goal there. So again, nothing unusual, but I think all of those things make a ton of sense. And going back to your point, the fact that the top countries declined should be a potential cause for concern.
Elliot Berman: Yeah. As you mentioned, they draw a direct connection between human rights and authoritarianism and authoritarianism and corruption. I think that their view is that the target is to put the world on a sustainable route to [a] corruption-free society, which is difficult but important.
Some of the countries that are interesting, not surprising, I guess some of the bottom countries that are in the news about a variety of things. Many of them with a negative connotation, Afghanistan, North Korea, Yemen, Venezuela, Somalia, Syria, and South Sudan. I would say every one of those countries, at least in part, their notoriety is for poor human rights.
But many of them, we also hear regularly being talked about in terms of corruption issues. So I think it's important, again for the community, as we think about many of the things that we try to do and to identify in the transaction flow and activity flow in our organizations, to see how all of these things do connect. Was there one thing that you took away from this that gave you a little positive feeling?
John Byrne: No, it's not really. I mean, the scores, again, some of the top scores went down a bit. Transparency, small T is always useful here. When you talk about a country score, and that's the—perceived level of corruption, their rank, where they are with other countries. So I think all of that, just having this is useful, but I'll give a really quick example of this in the United States.
There's been a debate just recently, and some legislation introduced just in the past couple of weeks; from what I understand, I could be wrong by it. Ensuring that elected officials don't trade in stock, you know, and you're thinking, wow, that's not already banned. While there are some restrictions on what elective office holders can do regarding trusts in the states and that sort of thing. The bottom line is it's just open for potential corruption if you don't restrict people that are in office and have the ability to either influence or gain monetarily from certain things that could increase stock prices. So that's another example which I would imagine if it passes in the US will help the U S score going forward. So that's an interesting example of how this works from a practical standpoint.
Elliot Berman: Yes. Agreed. Your example's interesting because it's one of those, and I'm sure I would get a huge amount of pushback from many people on this, where it seems like you wouldn't need a law for people to know that that's the right thing to do.
John Byrne: Yeah, I would just say though, Transparency International, go to their website. This is not the staff's view on corruption. It's based on data they get from places like the world bank, [The] World Economic Forum, that sort of thing. So this is not a stat. This is based on data. Te could always quibble about data, but that's what it is, and it's been around for quite a long period of time. Go to their website, take a look at it, and I think you'll find some really interesting facts in addition to what we just chatted about.
Elliot Berman: Yes. We will link to the landing page, where you can download the entire report on our website as part of posting this podcast. So, I'll do the shameless plug. If you enjoyed this week's This Week in AML, please tune in every Friday and listen to us or sign up and subscribe with us on Spotify, Apple Podcasts, or wherever you get your podcasts.
John, I know we're recording on Thursday, and so we're actually going to do a webinar today that people won't be able to sign up for tomorrow when this post. So, tell people about that, though, because they'll be able to see it later on.
John Byrne: True, it's on transaction monitoring, an important issue for all of our clients. You'll be able to, again, log on to get it after the fact, [inaudible] portions of it over the course of the next couple of months, and [we] put those out on social media. So please follow us on social media. Follow us on LinkedIn, Facebook, and Twitter, all the logical social media platforms. We're going to be doing a webinar in February, dealing with experts talking about what else to expect in 2022 in terms of legislation guidance. We will continue to provide monthly webinars that we hope help you with not just content understanding but also keep you current.
Elliot Berman: Perfect. Well, John, have a good weekend, and I will talk to you next week.
John Byrne: Take care.
Elliot Berman: Yep. Bye-bye.