Corruption Risk Assessment Tools

Identifying the right business partners to work with remains a key challenge for companies investing in foreign markets. In particular, executives want to make sure that their partners are not associated with integrity issues such as corruption or money-laundering. This prerequisite not only emerges from increasingly tight and rigorously enforced legal compliance requirements – on the international level well-known as the US Foreign Corrupt Practices Act and the UK Bribery Act. Apart from increased exposure to legal risks, it should be noted that a business partner’s involvement in previous or current cases of corruption can surface at any time.

Likewise, in the public sector, governments prefer to cooperate with corruption-free partner institutions and officials in their international relations to other countries, particularly regarding the call for transparency in the area of development cooperation and grant mechanisms. Public funds invested in international projects and administered by key officials in a beneficiary state may face the risks of political corruption including nepotism, clientelism and collusion. Governments and donors, being accountable to the electorate, seek to prevent any misappropriation of public funds by identifying the corruption risks attached to the implementation of foreign development assistance.

In both the private and public sector, the best method to identify and address integrity risks in complex settings involving a greater number of projects and partners, is to apply a Corruption Risk Assessment Tool. There is no standard corruption risk assessment procedure, because the tool’s design depends on the client’s strategic requirements. If set up in the right way however, a specifically designed risk assessment is a powerful tool for identifying and prioritising those risks that should be subject to effective risk mitigation measures and on-going monitoring.

When we develop a dedicated Corruption Risk Assessment Tool, we put a strong emphasis on involving the client in defining the right criteria in order to precisely target the specific strategic purpose and to meet the relevant research requirements. Based on practical experience, we are aware of the basic methodological conditions that have to satisfied.

Berlin Risk developed a Risk Assessment Tool for Transparency International and conducted a corruption risk assessment of the European Economic Area (EEA) and Norwegian Financial Mechanisms - View PDF for Methodology Report