The people of Madagascar recently came to realise that the price they pay to get a passport – almost a month’s wages – may very well be criminally inflated.
Leaked documents seen by investigative journalists reportedly show that Semlex – a Belgian company that produces passports for the island nation – had paid at least US$140,000 in unexplained fees to a former Malagasy top official who contracted them. This is a huge sum in a country where three-quarters of the population live on less than US$2 a day.
On the heels of these revelations, Transparency International Madagascar is demanding urgent and impartial investigations from local authorities.
If proven, what Semlex did would qualify as foreign bribery. In fact, the company has been previously exposed to have used this exact playbook in other African countries too and is being investigated by the authorities in Belgium.
Airbus, Odebrecht, INASSA, Semlex and Skoda – we look back at some of the most recent cases of foreign bribery that expose the extent of corporate corruption and highlight the long way many governments still have to go to address bribery in foreign markets.
That’s precisely what our new report, Exporting Corruption, reveals: how well or poorly leading economies and exporters – including Belgium – enforce against foreign bribery in line with their international commitments.
The results are of great concern. Nearly half of world exports come from countries that fail to punish foreign bribery. This includes half of all G20 countries and eight of the top 15 global exporters. Even more concerning, the number of countries actively enforcing has dropped since we published our last survey in 2018.
One of the major obstacles to enforcement against foreign bribery is the extensive use of shell companies that help cover up payments, making it more difficult for authorities to trace the origin and destination of the money.
As our Exporting Corruption report shows, shell companies make fighting foreign bribery a Sisyphean task. The Financial Action Task Force and its members have an opportunity to change that by reforming the global standard on beneficial ownership transparency.
But even when countries actively enforce against foreign bribery, victims’ compensation is rare and most proceeds of corruption are never returned to countries or citizens.
Foreign bribery has consequences. People in countries where multinationals bribe public officials often end up paying higher prices than they otherwise would for possibly lower-quality goods and services – just like Madagascar, where people have reported technical problems with their passports.
Public money wasted on unnecessary contracts and deals deprives citizens of essential services like education and healthcare. This can be a matter of life and death, especially during a pandemic.
Exporting Corruption 2020 | Transparency International
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Cases like that of Semlex in Madagascar should change the way business is done.
They should also prompt major exporters to do more against foreign bribery. To start with, the countries must make enforcement statistics and case outcomes public to show how international corruption is being handled. Legal frameworks, enforcement systems and international cooperation must be strengthened to handle complex international corruption cases to the benefit of the victim populations.
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