Transparency International publishes CPI 2023

On 30 January 2024, Transparency International (“TI“) published the Corruption Perceptions Index 2023 (“CPI“). The CPI, which is the most widely used indicator of corruption worldwide and covers 180 countries, scores and ranks countries (or territories) based on how corrupt a country’s public sector is perceived to be by experts and business executives.

A country’s score indicates the perceived level of public sector corruption on a scale of 0-100, where 0 means that a country is perceived as highly corrupt and 100 means that a country is perceived as very "clean". A country’s rank indicates its position relative to the other countries included in the index. It is a composite index, combining 13 data sources from 12 independent institutions, based on data published in the previous two years. For a country to be included in the ranking, it must be included in a minimum of three of the CPI’s data sources.

Best and worst performers

Overall, the latest CPI shows a general decrease in trust in public sectors across the globe, with several high-ranking countries (such as Sweden, the Netherlands and the UK) recording their lowest scores ever. In the 2023 rankings, as in 2022, more than two-thirds of countries (68 percent) scored below 50. The average global score remains unchanged from the previous two years at 43. Since 2012, perceived corruption levels in 118 countries (66 percent) have remained the same, whilst 28 countries have improved and 34 countries have declined.

Denmark, Finland and New Zealand remain at the top of the list of the "cleanest" countries, although whilst the scores of the former two have not changed since last year (90 and 87 respectively), New Zealand's score has declined to 85 (down two from last year).

The worst performers were Somalia, Venezuela, South Sudan and Syria, which ranked lowest with scores of 11, 13, 13 and 13 respectively. Sub-Saharan Africa (with an average score of 33) remained the worst performing region for 2023, closely followed by Eastern Europe and Central Asia ("EECA") (with an average score 35).

The UK

The UK is jointly ranked the 20^th ‘cleanest’ country this year, along with France, the Seychelles and Austria, following a two-point decline to a score of 71. This is the UK's lowest score on the CPI, following a five-point decline in 2022. Public trust in government has declined further following a sustained string of alleged cronyism and public spending scandals, particularly in light of the continued fallout from the COVID-19 pandemic when individuals with political connections were appointed to senior public-sector roles and there was systematic bias in the awarding of PPE contracts to those with political connections, via the government’s “VIP lane”.

The CPI report also flags issues with the involvement of enablers in cross-border corruption, noting a lack of compliance with, and enforcement of, anti-money laundering regulations in the UK.

However, TI notes that the creation of the Register of Overseas Entities, following the introduction of the Economic Crime (Transparency and Enforcement) Act 2022, has increased transparency of high-value property owned by foreign entities. Our previous blog post in relation to the Register of Overseas Entities is available here.

Other regional results

On average, EECA, the Middle East and North Africa, Sub-Saharan Africa and the Americas (excluding North America) scored poorly in the CPI, with regional average scores of 35, 38, 33 and 43 respectively. Notably, Russia has received its lowest score to date (26) as did Turkey, which has declined by two points since last year to a score of 34.

Asia Pacific had an average regional score of 45, with Afghanistan (20), Myanmar (20) and North Korea (17) ranked the lowest in the region. Vietnam has increased eight points since 2018 to score 41 (although it declined a point since 2022), although it remains some way behind the region's highest scorers New Zealand (85) and Singapore (83).

Although Western Europe and the European Union remains the highest ranking region, with only 13% of countries with a score below 50, the average score in the region fell to 65 in 2023, and TI suggest that there has been a stagnation or decline in anti-corruption efforts in the region.

Implications for businesses

The CPI source data captures a number of manifestations of public sector corruption including bribery, diversion of public funds, access to information on public affairs/government activities, and the ability of governments to contain corruption in the public sector. While there is no indicator which measures objective national levels of corruption directly and exhaustively, the CPI contains the informed views of relevant stakeholders, which generally correlate highly with objective indicators. Therefore, many companies use the CPI as part of their risk scoring matrix. Those scores should be rechecked annually to ensure they align with the most recent version of the CPI.

Many UK-based companies operate in high-risk jurisdictions which score poorly on the CPI. For example, within the EU, Romania, Bulgaria and Hungary score 46, 45 and 42 respectively. Regulators and enforcement authorities (such as the UK Serious Fraud Office) actively investigate and prosecute corporate criminal conduct, primarily in high-risk jurisdictions. Companies should therefore ensure that they carry out a country-by-country risk assessment, with the jurisdiction and its CPI score influencing the level and nature of their anti-bribery and corruption controls.

If you have any questions or concerns about any bribery or corruption matters potentially affecting your business, including in relation to the adequacy of your anti-bribery and corruption policies and procedures, please feel free to contact us.