May 18, 2011 / 1:05 AM / 8 years ago

Bribery rife across Europe's top companies

LONDON (Reuters) - More than one third of employees at large European companies are prepared to offer cash or lavish gifts and entertainment to win business as the economic downturn prompts firms to cut corners to stay ahead.

In its 2011 European fraud survey, consultants Ernst & Young said on Wednesday that Greek and Russian staff were most likely to offer cash bribes, with Greece also topping the chart for the most likely to offer personal gifts.

France and Norway had the cleanest slates, although two thirds of the 2,365 people quizzed across 25 European countries agreed that bribery and corruption was widespread on their turf — and nearly half were unaware of any company anti-bribery policy.

“Complacency about fraud, bribery and corruption, combined with cost cutting initiatives at many companies, creates additional exposure,” said David Stulb, who leads Ernst & Young’s global fraud investigation & disputes services.

Britain’s Bribery Act, which comes into force from July, unsettled business leaders in part because of an onerous new offence of failure to prevent bribery, which can make businesses with any UK interest criminally liable if staff, subsidiaries or “associated persons” offer bribes anywhere in the world.

It also clamps down on so-called “facilitation payments” — often used to oil the wheels of business by speeding up services such as visa applications — and “disproportionate” hospitality.

After polling employees from the factory floor to top executives, Ernst & Young said over 40 percent acknowledged that bribery and corruption had worsened over the last two years of the economic crisis.

Around one quarter did not trust management to behave ethically and nearly 60 percent expected top executives to cut corners to hit targets. Half of management respondents agreed.

Ernst & Young said only 26 percent of UK staff and less than 20 percent in France and Germany had received anti-corruption training. Only one third of those polled thought their anti-bribery policy contained clear guidance.

Staff in countries hit hardest by the economic crisis were clamouring the loudest for a tougher regulatory crackdown. Over 80 percent of respondents in Portugal, Ireland, Spain and Greece wanted more supervision by regulators.

That call comes against a backdrop of increasing regulatory action against companies and individuals. Under the Foreign Corrupt Practices Act (FCPA), the United States has sanctioned 107 for foreign bribery, Germany 71, Italy 39 and the UK 5.

The UK was shamed in the last annual Corruption Perceptions Index of least-corrupt countries, when anti-corruption group Transparency International ranked it 20th, trailing nations like Qatar. Greece ranked 78th and Russia 154th out of 178.

Editing by David Cowell

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