On the 11th of February, Transparency International released its 2024 CPI, assessing public sector corruption across 180 jurisdictions.
The CPI stands as a key tool for evaluating jurisdictional risk. It ranks countries based on perceived corruption levels, drawing on data from the World Bank and the World Economic Forum.
Key takeaways from the latest index
Bottom jurisdictions and variations
- At the bottom of the index are countries challenged by conflict, restricted freedom or weak democratic institutions.
- South Sudan (180th), Somalia (179th), and Venezuela (178th) occupy the lowest positions of the rank, indicating significant corruption risks.
- Most of the countries with the lowest CPI scores are also listed on sanctions lists or FATF watchlists, reinforcing their high-risk status. Eritrea and Equatorial Guinea, however, recorded their lowest-ever scores and stand out as the only two countries among the lowest-ranked that are not currently subject to UK, US, UN, or EU sanctions.
Top jurisdictions and variations
- The top ten countries are well-established democracies with robust governance frameworks. While their scores fluctuate slightly year to year, these countries have dominated the upper ranks of the index since its launch.
- Denmark retains its position at the top for the seventh consecutive year, followed by Finland (2nd), Singapore (3rd), New Zealand (4th), Luxembourg (5th), Norway (6th), Switzerland (7th), Sweden (8th), the Netherlands (9th).
- Yet, even top-ranking CPI countries face financial crime risks. Luxembourg, for instance, recently came under scrutiny after the Banque Internationale à Luxembourg was found to have facilitated the transfer of $175 million in allegedly stolen Azerbaijani state funds into UK real estate.
Regional insights
- Europe: most European countries experienced a decline in their CPI scores. The UK held steady at its lowest recorded score of 71 in 2023, maintaining its 20th place ranking. Switzerland (5th), Sweden (8th), and the Netherlands (9th) remain among the leaders but have also lost points. Norway dropped three points, marking its lowest score.
- Americas: the Americas were also marked by a decrease in their overall average scores. The US dropped 4 points, falling to its lowest-ever ranking at 28th and Mexico declined by 5 points, reaching a record low of 140th.
- Africa: nearly all African countries saw a decline in their CPI scores, however Rwanda experienced the highest rise in the continent by rising 4 points and achieving the highest ever ranking of 57th.
- Middle East: the Middle East was the only region globally to see an improvement in its average CPI score.
- Asia-Pacific: The Asia-Pacific region saw a slight decline in its overall CPI score, with mixed performances across individual countries.
Main considerations
The CPI is a valuable tool for assessing corruption risks across jurisdictions. Firms should pay close attention to changes in the latest index and assess whether updates to their frameworks are needed.
While the CPI provides a strong starting point, it is just one piece of the puzzle. Firms should incorporate additional data sources to build a comprehensive risk framework.
How we can support your firm
Risk Assessments
- Assist in developing your jurisdiction risk assessments.
- Conduct your business wide risk assessment and ensure that any changes to countries risks, are properly evaluated and mitigated.
- Design and implement your customer risk assessment tailored to your firm’s specific needs.
Policies & Procedures Review
- Review your policies and procedures to identify any gaps in jurisdictional risk assessment ensuring alignment with regulatory requirements and best practices.
Ongoing Support
- We can offer ongoing advisory support through our MLRO hotline and Horizon Scanning updates, keeping your team informed of regulatory changes and industry trends.