Products more expensive due to bribery and corruption, survey finds

DUBAI // Bribery and corruption results in higher costs for services and more expensive products as economic crime in the UAE increases, according to the latest global survey.

Local businesses were the largest participants (30 per cent) in the Middle East to a global survey into economic crime conducted by consultants PricewaterhouseCoopers.

Results showed an increase in reported crimes in the region, with 26 per cent of businesses saying they had been victims in the past two years. Although lower than the global average of 36 per cent, there has been a 5 per cent increase since 2014.

Nick Robinson, a former detective inspector with the Hong Kong Police commercial crime bureau, is now a forensic service leader at PwC in Dubai.

“If you look at fraud and corruption, people typically don’t pay bribes with their own money,” he said. “They will generally mis-appropriate it first. There is usually an underlying fraud in every bribery case. The two are closely linked.”

The four main pillars of crime in the business world are asset appropriation, bribery and corruption, procurement and cyber crime.

Results from the survey revealed that several businesses in the region simply did not know if they had been a victim; 20 per cent said they were unaware of illegal activity. The global average is just 11 per cent.

Seventeen per cent of reported economic crime was uncovered by accident, compared with a global average of 11 per cent.

Experts said it was a concern made all the more prominent by the fact that more than half of organisations had not, or did not know if they had, conducted a fraud-risk assessment during the previous two years.

Because most illegal activity is cross-border, it is difficult for businesses to know where to report it, or who should be investigating and prosecuting.

Mr Robinson said he suspects that many firms here are not reporting crimes to protect their reputation. “If someone is taking a bribe or kick-back, then someone will suffer as a result of that,” he said. “Generally, we will see quality of goods and services suffer as a result, and prices also increase.”