Increased global trade, foreign direct investment, greater economic potential, large consumer base, young working population, strong domestic consumption and fluctuations in the US dollar have led to improvements in the performance of emerging markets, including India. These markets offer attractive investment opportunities with portfolio diversification, showcasing the potential for strong commercial ties with the rest of the world. That said, emerging markets continue to grapple with fraud, bribery and corruption risks, which can be mitigated through greater regulatory enforcement and implementing robust anti-bribery and anti-corruption frameworks.
Enforcement trends in emerging markets
While the regulatory activities have shown a positive impact on emerging markets, increased enforcement, proactive measures taken by companies and effort taken to enhance individual accountability could deter corruption risks to a large extent.
EY’s EMEIA Fraud Survey highlights
Countering bribery and corruption in emerging markets
- Introducing new reforms and laws – Governments of various emerging markets are introducing new laws and or making amendments to the existing laws to raise the bar of compliance and penalize perpetrators. Key regulations include –
- Malaysia’s Misconduct for Civil Service Act
- Thailand’s Anti-Corruption Act
- Vietnam’s Penal Code
- Philippine’s Tax amnesia program 2018
- Proposed Anti-Bribery Law in Saudi Arabia
- India’s Insolvency and Bankruptcy Code 2016
- Newly proposed Cybersecurity Bill in Singapore
- South Africa’s Financial Centre Amendment Act 2017
- Proposed Digital Security Act in Bangladesh
- Adopting leading industry practices – Regulatory authorities in emerging markets are taking multiple steps to educate, inform, and support the commercial sectors on anti-bribery and anti-corruption practices
- Rising Foreign Corrupt Practices Act (FCPA) enforcement – 2016 was possibly the biggest enforcement year in FCPA’s history, globally. Emerging markets such as China, India, Thailand, Vietnam and the Middle East have shown improvements in enforcement activities, (including FCPA) in the recent past.
- Third-party risks – issues involving third parties have been at the core of recent enforcement actions in most emerging markets
- Adopting ISO 37001 – Many countries such as Singapore, Malaysia and China have adopted ISO 37001 standard on Anti-Bribery Management systems to strengthen their anti-bribery and corruption frameworks and processes
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