Croatia Ranked 16th in Bribery and Corruption in the Business World

A study by the auditing and consulting firm Ernst & Young (EY) on the prevalence of corruption, bribery, and fraud in the business world has shown that bribery and corruption remain present in the business environment, with Croatia ranking 16th out of 62 countries, EY reported on Wednesday.

The study titled “Corporate Offenses – Consequences for Individuals” involved 2,825 decision-makers from large companies and was conducted in 62 countries, including Croatia.

Croatia at 16th Place, Finland Perceived as a Country Without Corruption

The research revealed that 60 percent of respondents from Croatia believe that bribery and corruption are widespread in business.

Although still above the average of all respondents (39 percent) and the regional average (46 percent), the percentage has significantly decreased compared to previous years, indicating some positive shifts in the confidence of domestic respondents in the business and legal system in Croatia, the statement noted.

On the list of a total of 62 countries, Croatia ranks 16th, while the top three positions are held by Brazil (90 percent), Ukraine (88 percent), and Nigeria and Thailand (86 percent).

Slovenia is in 26th place (40 percent), Serbia in 23rd place (48 percent), while at the bottom of the list this year are the Scandinavian countries – Finland with 0 percent and Sweden and Denmark with 4 percent.

Saudi Arabia also appears on this list with the same percentage.

The study also showed that only 16 percent of domestic respondents confirm that bribery is common when concluding business deals in their sector. When considering all 62 countries, this figure is close to the average of 11 percent, the statement noted.

The results of the research emphasized significant support for increasing transparency regarding the determination of the actual ownership of companies. On average, as many as 91 percent of respondents recognize the importance of being able to determine the actual ownership of the companies they do business with. This figure among Croatian respondents is slightly lower at 82 percent.

“The need for increased transparency is visibly influenced by rising geopolitical tensions and heightened instability in global financial markets,” said Ivan Brko, a manager in the Fraud Investigation and Dispute Resolution Department at EY Croatia.

He also noted that we are witnessing that threats such as cybercrime, financing of terrorism, and abuse of offshore jurisdictions have become increasingly widespread recently. These threats have increased pressure on governments, which are expected to act, while at the same time, companies are expected to identify and combat issues related to fraud, bribery, and corruption, Brko emphasized.

Croats Highlight Weak Effectiveness of the State in Punishing Corruption

One of the questions concerned the work and effectiveness of state bodies in sanctioning corrupt actions, with as many as 74 percent of Croatian respondents stating that they believe state bodies have the will but do not consider them effective in sanctioning corrupt actions. This places Croatia in a high second place, alongside Portugal, while the least trust in the state is expressed by Thais.

The research indicates that whistleblowers remain a key source of information about alleged illegal activities, with 55 percent of companies having dedicated whistleblower hotlines, and in some parts of the world, including the USA, whistleblowers are also financially rewarded.

However, participants in the research identified certain limitations that prevent such mechanisms from always being effective – 18 percent of respondents indicated that their loyalty to colleagues would lead them not to report a case of fraud, bribery, or corruption, while 19 percent cited loyalty to the company as a decisive factor.

The results of domestic respondents on this issue are within the average. “Finding a balance between data privacy and security continues to create certain complications in business, but it is evident that cyber threats in the business world are still not taken seriously enough. The research showed that less than half of the respondents consider cybercrime a risk to business, while in Croatia, the percentage drops to only 22 percent,” concluded Brko.