Transparency International’s 2023 Corruption Perceptions Index: top trends companies need to know

On January 28, 2024, Transparency International, the world’s leading NGO in the fight against corruption, released its 2023 Corruption Perceptions Index (CPI). The CPI has been published annually since 1995. It provides an annual comparative snapshot of 180 countries based on perceived levels of public sector corruption, as determined by expert assessments and opinion surveys, on a scale from 100 (very clean) to 0 (highly corrupt).

The 2023 Index sheds light on noteworthy trends for anticorruption professionals.

Stagnation or decline in corruption perception scores

Over two-thirds of countries score below 50 out of 100, which strongly indicates that they have serious corruption problems. The global average is stuck at only 43, while the vast majority of countries have made no progress or declined in the last decade. Over 80 percent of the world’s population live in countries with CPI scores below the global average of 43. 

Only 28 of the 180 countries in the index have improved while 34 have significantly worsened. Transparency International notes that this global decline has been evident since 2016 attributing it to the rise in authoritarianism. 

Top and bottom performers in the global corruption index

For the sixth year in a row, Denmark heads the ranking, followed by Finland, New Zealand and Norway, with Singapore, Sweden, Switzerland, the Netherlands, Germany and Luxembourg completing the top 10. However, as acknowledged by the NGO, the CPI does not capture the extent to which countries facilitate cross-border corruption. Western countries, for example are much more likely to harbour corrupt assets (such as real estate) or host corruption enablers, rather than preside over an inherently corrupt system.

Somalia, Venezuela, Syria and South Sudan are ranked last in the 2023 Index. In these states the root causes for corruption spring from variety of major geopolitical factors, including conflict, freedom restrictions and weak democratic institutions. Where the justice system is unable to uphold the rule of law, corruption thrives. Conversely, where corruption is the norm, there may be obstacles to accessing justice for the most vulnerable.

How does the UK fare in the 2023 Corruption Perceptions Index?

Over the last six years, the UK has been sliding down the Index from a high point of eighth position and a score of 82 in 2017, to 20^th this year with its lowest ever score of 71. Indeed, the UK is highlighted in the 2023 CPI report as a significant decliner, alongside countries such as Poland and Cyprus, citing compliance with anti-money laundering regulation and loopholes in the register of the owners of foreign entities as inherent weaknesses. The Serious Fraud Office is still perceived to lack sufficient resources to implement the UK’s anticorruption programme fully.

The passing of the Economic Crime and Corporate Transparency Act however, could help reverse this decline. Introduced as part of the UK’s economic crime plan, the Act imposes significant new obligations on companies. Of particular importance is the failure to prevent fraud offence, extending throughout the organisation, its connected entities and those operating on its behalf, and the expansion of the identification principle to include senior managers, making it easier for regulators to attribute responsibility and bring about successful prosecutions.

How has France performed in the 2023 Corruption Perceptions Index?

France is also ranked at 20 with a score of 71, but with a very different trajectory from the UK. Transparency International notes France’s positive progress between 2013 and 2020 driven primarily by the creation of the  national financial prosecutor’s (Parquet national financier, ‘PNF’) office in 2013, its anti-corruption law Sapin II which set up the French Anti-Corruption Agency (Agence Française Anticorruption, ‘AFA’) as well as the implementation of whistleblowers protections into French law.

But France seems to have lost the momentum considering the appointments of prosecuted individuals as ministers and recent legislative reforms like the reform of the ‘judiciary police’ (notably in charge of finance investigations) according to Transparency International’s French chapter. The anticorruption judicial and investigation authorities also lack resources as noted likewise by the OECD Working Group on Bribery in December 2021.

Useful tools to assess corruption risks

Transparency International’s Corruption Perception Index is a practical and useful reference when beginning to assess international corruption risks as part of a due diligence or business risk analysis. It provides valuable insights into the appetite for, and commitment to, corruption prevention by country. However, it is important to remember that it is based on perceptions and focuses primarily on public sector corruption.

In order for companies to properly assess the risk level in a country or third party, it is vital to have detailed information on all applicable enforcement laws and regulations so that appropriate and robust systems and processes can be built and integrated into the business to mitigate corruption risks and ensure compliance.

Companies must therefore take a more holistic approach for corruption risk assessment purposes in order to properly identify and prioritise the risks they face. Companies need to understand where the greatest risks lie and focus on the granular details of possible corruption, specific to the nature and location of their operations. GoodCorporation’s anti-corruption risk assessments provide a comprehensive analysis enabling companies to prioritise the necessary actions to protect the business. Other resources such as the French Anti-Corruption Agency has also produced a practical guide of useful resources when conducting due diligence on third parties and assessing risk level.