One in Three Swiss Companies Admits to Bribery Abroad
One in Three Swiss Companies Admits to Bribery Abroad
Wed, Feb 28th 2024
Despite heightened anti-corruption efforts, over half of Swiss companies face demands for illicit payments abroad, with a significant portion conceding to these requests, reveals a recent study.
Keystone/SDA – STR
One in three Swiss companies makes corruption payments abroad! More than half of companies are confronted with demands for such payments in their foreign business. According to a study, they are even more common than ten years ago.
Despite increased anti-corruption measures, the illegal practice of informal payments or “gifts” in foreign transactions is still widespread, Transparency International Switzerland found in their study.
The online survey of 539 Swiss companies of all sizes and sectors operating abroad revealed that 52% of companies are confronted with requests for informal payments that are “expected” of them. And of these, 63% admit to making such payments, according to the survey.
On average, 5.6% of turnover in the country is spent on concealed payments. SMEs are just as affected by this as multinational companies. Companies with production facilities, joint ventures, or equity investments are more willing to pay.
Public sector Courruption
Corruption is widespread in both the public and private sectors. Over 70 percent of the companies concerned stated that gratuities were expected when other companies awarded contracts, while 60 percent mentioned this in connection with public contracts. These “expectations” sometimes come from the police or customs.
Around a quarter of participants stated that they had lost a public or private contract in the last two years to a competitor who was considered corrupt. This was particularly the case in Italy, China, Russia and Germany.
Almost one in seven companies surveyed refrained from entering a market due to the risk of corruption. Russia, Iran, Belarus and Ukraine were frequently mentioned in this context. 12% of respondents had left a market in the last five years for the same reason, with Russia, Iran, Azerbaijan, Angola, and China being mentioned most frequently.
No Prevention
Until the turn of the millennium, bribes had hardly any consequences for companies based in Switzerland: they were even considered necessary for certain foreign markets and could be deducted from tax. In the last 20 years, however, the paradigm and the legal framework have changed.
As a result, prevention strategies have been introduced, such as the written documentation of all business transactions. Companies can also resort to disciplinary or legal measures or the contractual obligation of third parties.
Nevertheless, the survey showed a trend towards more corruption offenses. This could be partly due to the new methodology compared to previous surveys, the authors explained.
No Penalty
There are still gaps in prevention: almost one in four companies do not have any basic measures in place, such as binding guidelines or due diligence checks by contracted third parties. Half of the companies have neither training for employees nor an independent office for whistleblowers.
According to the authors of the study, criminal prosecution of offending companies is rare. In the last 20 years, only 11 Swiss companies have been convicted of failing to prevent serious crimes.
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