When doing business in a new country, do you know what the bribery risks are? Robert Clark is the Manager of Legal Research at TRACE International, and he’s here to discuss the TRACE Bribery Risk Matrix, an excellent tool for the compliance practitioner, and deep-dive into it and how you can use it — so you don’t get caught unawares.

What is the TRACE Bribery Risk Matrix?

It’s a tool for assessing bribery risks on a country-by-country basis. Before 2014, the best available resources for doing this were general evaluations of the perception of corruption in each country. This tool is more specific, and does two things distinctively: (1) focuses on business bribery risk, and (2) takes a multi-dimensional view of that risk by looking at a range of factors or domains.

What are these domains and how do they work?

The first domain is called Opportunity, which is concerned with the direct engagement with public officials in each country. It asks three questions:

  • How much interaction can you expect there to be? The more interactions you have with public officials, the more chances there are for that public official to demand a bribe.
  • Is bribery generally understood as the way things are done in the country?
  • If a public official asked for a bribe, would that official have leverage to make it hard for the other side to resist that demand?  

The second domain is called Deterrence, which speaks to whether there is anything discouraging public officials from demanding bribes. Its two subdomains are:

  • Dissuasion, or society’s general attitudes about the acceptability of bribery
  • Enforcement, or whether or not a government has good enforcement mechanisms to make it a lot less appealing to engage in bribery

The third domain is Transparency. Does the society have the tools it needs to detect, expose, and thereby deter corrupt schemes? It has two subdomains:

  • Processes, or how easy is it to get information about what the government is doing?
  • Transparency of Interests, which attempts to assess how easy or difficult it is to determine the interests public officials might have in particular entities.

Finally, we assess the Degree of Press Freedom, the Strength of the Free Press, and the Strength of Civic Institutions to act as a watchdog with respect to government abuses.

How can a compliance professional utilize this information in an anti-corruption compliance program?

You can do it in two ways. If you’re trying to make a broad assessment, the matrix provides a top-level risk score to give you a high-level overview of a country’s risk level. Or you can dig a little deeper and understand where the risk comes from and what it looks like specifically, so your business can respond accordingly to make sure it’s not complicit in any bribery schemes.

Why is it important to have this perspective when conducting commercial operations outside of the US?

We want to help people appreciate how people in the community understand the history and processes that give rise to these risks. So rather than trying to build the matrix as something that would track how bribery changes over time, the complete dataset has been made available online, arranged in a way that’s relatively easy to browse through so you can visualize how the underlying conditions have changed and developed in the past.


Robert Clark (LinkedIn)

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