20.10.22 Review

Exports of Corruption and Corruption in Exports: Transparency International notes another deterioration in the fight against corruption in international trade

The number of countries taking anti-corruption measures in international trade is decreasing, as is the share of these countries in global exports. Russia is among the countries that make zero efforts in this regard, according to Transparency International's "Exports of Corruption" report. Since 2018, Russia has opened only one case of this kind and has not brought any of the earlier ones to court. Russian law enforcement authorities have not even taken any actions against "VimpelCom" and "MTS", which admitted violations in the so-called Uzbek telecommunications scandal and ended up paying multimillion-dollar fines in the United States for their actions. This case shows that the Russian authorities are more likely to cover up international corruption than to fight it.

Transparency International's report analyzes the international anti-corruption initiatives of the states that have signed the Organization for Economic Cooperation and Development (OECD) Anti-Bribery Convention. This report is based on an analysis of the effectiveness of different enforcement stages: investigations initiated, charges brought, and cases closed with sanctions implementation. Transparency International has been conducting regular monitoring in this area since 2005. The published report analyzes the period from 2018 to 2021 and notes a continuing trend of declining states' activity in the fight against export bribery. Transparency International notes that 38 countries, accounting for 55.3% of world exports, have made little or no effort to enforce the OECD Convention. However, nine countries with a global export share of 28.7 percent have made moderate to significant steps to address international bribery. 

Countries participating in the OECD Anti-Bribery Convention and their level of anti-bribery activity 

      Active efforts Medium efforts Limited effort Little or no effort
Countries USA, Switzerland Germany, France, UK, Australia, Norway, Israel, Latvia Netherlands, Canada, Italy, Spain, Brazil, Austria, Sweden, Portugal, South Africa, Argentina, Chile, Greece, Colombia, New Zealand, Peru, Costa Rica, Estonia China, Japan, South Korea, Hong Kong, Singapore, India, Mexico, Russia, Belgium, Ireland, Poland, Turkey, Czech Republic, Denmark, Luxembourg, Hungary, Slovakia, Finland, Bulgaria, Lithuania 
Share in world exports, % 11,8 16,9 15,5    38,9

Russia is at the bottom of the "Export of Corruption" ranking. Transparency International's report indicates that despite the well-known and recognized facts of international corruption by Russian companies in other countries, the Russian law enforcement authorities have initiated only one relevant case in the last two years, and none of the earlier cases have been brought to court.

A typical example is the attitude of Russian authorities to the so-called Uzbek telecommunications scandal. An investigation launched in Switzerland in 2012 proved that the daughter of Uzbekistan's president, Gulnara Karimova, had received multi-million dollar bribes from foreign companies seeking access to the Uzbek telecommunications market. Russian telecom giants "VimpelCom" and "MTS" were part of this scheme. Both companies admitted to U.S. regulators participating in corruption schemes in the Uzbek market. They have paid $850 million and $450 million in fines to the Department of Justice and the U.S. Securities and Exchange Commission.

However, Russia has not reacted in any way to the fact of violations recognized by the companies themselves. Thus, the Russian law enforcement authorities seem to be covering up international corruption rather than fighting it. Transparency International intends to file a criminal complaint with the Investigative Committee of the Russian Federation and offers the Russian government several systemic measures to combat international corruption.

Yet, the interests and attention of the Russian government and the law enforcement system are far from this issue. Moreover, there is reason to believe that commercial bribery by big business is one of the tools used by the Kremlin to influence foreign markets, organizations, and states. However, these strategies are typical for many emerging markets, resulting from a significant trend noted in the report: the number of countries that do not oppose international corruption is growing in parallel with their growing share in world trade.