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ICC Austria - Home

Business Ethics & Anti-Corruption

ICC Austria’s “Commercial Approach to Anti-Corruption”

Max Burger-Scheidlin

 

Many investments and commercial activities in Africa face attempts of corruption in various forms – from petty “speed money” to grande corruption, extortion etc..

 

Traditional anti-corruption approaches based on the creation of ever more rules, stricter compliance and tougher enforcement have limited effects in weak “rule of law” countries. The true cost of corruption is not only the moneies paid, but the consequences of sub-optimal or wrong decisions.

 

To make “clean” and profitable business in Africa, Latin Amercia, South Asia etc. you have to go “beyond legal measures and strict compliance”.

 

Most businessmen, most public officials and politicians you meet there, have been sozialized with corruption from an early age on. In their minds there is nothing wrong with corruption. This is their usual way to survive, to feed their families, to “make it in life”. Since childhood, corruption has been their avenue to success, income, profits.

 

They simply do not understand the fuss “the West” is making concerning corruption.

 

What is more, they have nothing to fear! They do not care about legal threats or criminal law. They know “their” local enforcement authority, they probably have bribes “their policeman” in the past. The public prosecutor may be a distant relative, the judge their neighbor – and all are known to be corrupt as well.

 

As a result, they totally resist the “West’s” “legal & compliance” anti-corruption drive!

 

However, what most of these presently corrupt do not consider are the long-term challenges!

  • Indeed, corruption is profitable short-term! Corruption is ”temporary purchased legal security”! As long as their “corrupt mentor” stays in power, he will protect “his client”, - provided the “client” pays continuously the requested “protection-money”.

But in the longer run? How does that hold up over the corrupt person’s lifetime?

 

To generate income through bribes is relatively easy!

 

To keep and enjoy the illegally gained assets over a lifetime is very difficult!

  • E.g. in Iraq’s “Oil for Food Program” of 1992 - 2003, billions have been siphoned off. Over the last 5 years, the legal prosecution and confiscation of funds in this case have taken off. Many “benefactors” who profited tremendously at that time, now sit in prison. (e.g. UNAOIL case)

The long-term risks of corruption are very high for bribe takers!

  • Estimates are that bribe takers can only keep some 30% of their bribe as income, whereas some 70% must be distributed further to their “friends of heart and pocket”, while having to take 100% of the legal responsibility and culpability of the looted money – should the political winds change.
    • Their “friends” know them to be corrupt. …and the corrupt can always be extorted. Will the corrupt be able to keep their “friends of heart and pocket” quiet for 10 or more years ? – will they have to continuously pay their “friends” ? Do their have enough money to hush them up for 20 years?
    • Where can the corrupt invest the received bribes?
      • In their home country? …their local bankers know this money is not clean! ….blackmailing the account-owner is easy…
      • Abroad? Dubai, Hong Kong etc., have strict anti-money laundering laws. And the transfer of US$ 100.- from Tajikistan or Nigeria to Dubai is transferred via New York (and all transfers are screened by US Authorities)
    • o Will their wifes and girlfriends - who enjoy a luxurious life at present – stay mum – even after a divorce or separation?

ICC Austria’s “commercial approach” to anti-corruption appeals to and works with each person’s self-serving mind set, simply by looking at the long-term challenges and costs a bribe taker will face.

 

“Maximize your income, your savings, your profits, over your lifetime!” – This requires planning for 20 to 50 years! It requires solid long-term risk management! Hold on to your gains, but for 50 years! Never get extorted! Never sit in prison! Never have your bank accounts blocked, confiscated!

 

If you have made only “clean” money, it is easy to keep your savings and investments safe!

  • If, in contrast, if you are in possession of non-taxed, criminal proceeds you must stay “under the radar” of local and international authorities for a lifetime.

In addition, most corrupt people do not consider the consequences of corruption for their own communities – and indirectly their own personal income potential, and those of their sons and daughters, who will have reduced salaries and income opportunities:

  • pervasive corruption reduces investment in that country,
  • therefore, income opportunities are lower, products are of minimum quality,
  • unemployment is higher, workers’ salaries are reduced,
  • the number of poor and desperate increases…
  • corruption and in consequence poverty create a fertile ground for radicalization! A “savior” will emerge, who promises a “cure for all evils”. In Europe Hitler, recently the “Islamic State” in Syria… Wherever there are revolutions, civil war etc. corruption is often a key root cause (Eastern Ukraine, Somalia, Iraq, Myanmar, Boko Haram, Afghanistan, Congo).
  •  …and with all revolutions – the corrupt and powerful mosty loose their houses, savings, investments
  • …this is not profit-maximazation over a lifetime!

Therefore, ICC Austria’s key headline reads:

 

“To increase income for yourself, friends and family, to maximize profits – fight corruption !”

 

 

Contact:

ICC Austria - Internationale Handelskammer
• Dr. Max Burger-Scheidlin
• Mag. Paulus Krumpel

Wiedner Hauptstrasse 57, 1040 Wien
Tel: 01-5048300-3701
E-Mail: icc@icc-austria.org