Estimated by the European Commission to be worth 990 billion euros a year in all sectors, corruption remains, alas, an endemic phenomenon. And the situation is not about to improve! According to Transparency International, which published its Corruption Perception Index (CPI) in February 2025, the situation in France has worsened. The hexagon has dropped five places in the world ranking, falling to 25th position, ten places behind Germany, with a sad score of 67/100.
Corruption, a sprawling monster that feeds on complexity
Corruption finds a fertile breeding ground in the multiplicity of interactions between companies and their ecosystems - be they customers, partners, suppliers or subcontractors - both nationally and internationally. The complexity of economic activities and the massive volumes of transactions they generate make it difficult to identify, analyze and eradicate corruption. Although progress has been made in the fight against this scourge, it remains slow and uneven, while fraudulent practices continue to evolve.
Ill-prepared and disorganized companies: an open door
The record of companies in the fight against corruption is worrying. The French Anti-Corruption Agency points out that many organizations have structural weaknesses, such as unclear internal governance, a lack of leadership during audits, and insufficient human and material resources. In addition, compliance networks are sometimes non-existent and functions poorly defined. These shortcomings are also reflected in the KYC (Know Your Customer) approach, which is essential to prevent corruption. The European Commission's study shows that the automation and digitization of KYC procedures weakens human interaction with customers, making it more difficult to identify fraud.
The persistence of this scourge has been highlighted by a number of recent cases involving high-profile companies such as waste treatment specialist Paprec, the SNCF and IBM, and the Lorientfishing port. According to data from the French Anti-Corruption Agency's observatory, almost a third of cases involve company directors and legal entities under private law.
Knowing your customers and suppliers: the first line of defense against corruption
The KYC (Know Your Customer) approach is not only essential, but also a legal obligation, particularly in the financial sector. It is framed by legislation such as EU Directive 2015/849, the 2016 law strengthening the fight against organized crime, terrorism and their financing, as well as the 2016 Sapin II law. The latter requires companies with over 500 employees and sales in excess of €100 million to implement preventive measures against corruption. The main aim of these obligations is to strengthen information gathering and identity verification.
The KYC(Know Your Customer) approach is a process used to verify the identity of customers prior to any commercial relationship. It is based on three pillars: customer identification, with the collection and verification of identity documents. Next, profile and risk assessment, based on the customer's activities, financial situation and source of funds. Finally, there is ongoing monitoring, with transactions tracked to detect suspicious or unusual behavior. KYC has its counterpart for suppliers(Know Your Supplier).
KYC and KYS: undeniable assets
For companies, the KYC approach offers many advantages:
- enhanced security, reducing the risk of fraud and identity theft.
- Identification of all suspicious transactions.
- Better regulatory compliance: companies avoid sanctions and fines by complying with legal obligations to combat fraud, corruption and money laundering. As a reminder, bribery in the private sector is punishable, for an individual, by five years' imprisonment and a fine of 500,000 euros. For legal entities, the fine is quintupled.
- Reduce operational and financial risks: by identifying high-risk customers from the outset, companies can better anticipate potential problems and avoid financial losses.
- Improved customer relations: a well-designed KYC process creates a climate of trust between the company and its customers, fostering smoother, more lasting collaboration.
Real risks
KYC is a crucial tool for ensuring the transparency, security and compliance of financial and commercial transactions, while at the same time identifying "dubious" customers or suppliers. Neglecting to know your customer/supplier presents major risks. In addition to financial penalties, the consequences for a company's image, particularly in the event of media coverage, can be critical.
Compliance Officer: a job with a future!
So how can you reduce the risks associated with corruption? There are several strategies to consider:
- Analyze and map risks according to customer/supplier typologies: certain company profiles, activities (purchasing departments, etc.) or geographical areas are more prone to corruption. This makes it easier to assess the integrity of a customer or supplier.
- Develop the Compliance Officer function, reporting to general management. According to headhunting firm Robert Half, the role of a Compliance Officer is to ensure that the company's regulations and procedures are properly implemented, and to check that processes are compliant. " The importance attached to compliance by the company's top management has a positive impact on the way operational staff take these issues into account",emphasizes PWC. Compliance Officers, who have multiple missions, are particularly involved in setting up partnerships, concluding contracts, acquisitions and major investments.
- Set up a warning system as far upstream and automated as possible, even if human intervention is always desirable, to eliminate false positives.
- Invest in a solution that guarantees that the organization knows its customers and suppliers (KYC and KYS), with extended functionalities including: KYC remediation (cleaning and updating customer and supplier databases), information and transaction filtering, real-time detection, scoring, risk assessment...
Corruption progresses insidiously, and its perpetrators have no shortage of creativity. Yet it is often perceived as a distant problem by companies, who believe themselves to be immune to these illegal practices. However, the reality is that this issue is taking on increasing importance in compliance strategies, particularly with the rise of Compliance Officers. To combat corruption effectively, it is essential to deploy suitable tools, such as those offered by AP Solutions.
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