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Russia was included in the top five economic crime leaders

Russia entered the top five world leaders in the prevalence of crimes against business, equaling this indicator with Uganda. Most often companies in Russia complain about misappropriation of assets and corruption

Photo: Yevgeny Odinokov / RIA Novosti
Photo: Yevgeny Odinokov / RIA Novosti

The best of the worst

Russia entered the top 5 countries, where companies most often suffer from economic crimes, according to a poll by PricewaterhouseCoopers (PwC) “Counteraction to fraud: what measures are taken by the company?”, Which covered 54 countries (RBC has a study). The crimes in the review are actions that are qualified as such by the companies themselves, and not by law enforcement agencies, and not necessarily formalized in criminal cases, PwC explained.

In 2016-2017, the number of companies that faced economic crimes increased sharply in Russia (the previous study was conducted at the end of 2015). If two years earlier 48% of respondents reported fraudulent information, this time already 66% ( see infographics ). For the 2018 survey, 210 companies were interviewed in Russia (in the previous survey there were 120 respondents).

More often than in Russia, companies face economic crimes, only in three countries – France, Kenya and South Africa (Russia divides the fourth place with Uganda). And in a study two years ago, Russia was ahead of seven countries. But the sharp increase in fraud cases for the past period was noted not only by respondents in Russia, but all over the world: at the global level the share of such signals increased from 36 to 49%.

From the data of PwC it is impossible to make an unambiguous conclusion, the objective level of economic crime is growing or the detection of its companies is increasing, the authors of the study acknowledge. It can not be said that the level of economic crime is growing, said the co-chairman of Delovaya Rossiya Andrei Nazarov. “If we are talking about the number of criminal cases in the economic sphere, last year this figure, on the contrary, was frozen at the level of 2016,” he notes. “On the other hand, both in the state and the companies themselves are paying more attention to this issue.”

Both in Russia and throughout the world, the most common type of economic crime is the misappropriation of assets, but in Russia this kind of fraud was noted by 53% of respondents, and in the world – by 45%. In second place in Russia – bribery and corruption (41% compared with 30% in 2016). At the same time, companies around the world deal with corruption much more rarely – 25%.

The third most common type of fraud in Russia is related to purchases of goods and services. It was noted by 35% of Russian respondents, their share remained practically unchanged from 2016 (33%), but the level of this type of economic crime is still higher than the world average (22%). But according to the share of those who reported cybercrimes, Russia is inferior to the world – 24% against 31%.

Threatening losses

The main damage to business from economic crimes is the financial loss and loss of assets, follows from the PwC survey. In Russia, 22% of respondents from companies that faced economic crimes in 2016-2017, indicated that the losses incurred from these crimes exceeded $ 1 million. For 41%, the loss did not exceed $ 100 thousand.

In the PwC study, the assignment of an asset is itself understood as an economic crime. However, Nazarov notes that in Russia, economic prosecution is often an instrument in the unfair competition, resulting in a redistribution of property. The businessman is placed in a pre-trial detention center or under house arrest without access to the company’s affairs, and as a result the decapitated company can no longer remain afloat. 80% of entrepreneurs, against whom criminal cases were initiated, completely or partially lost their business, Nazarov asserts.

In addition, companies have to conduct their own investigations of committed offenses. Only half of the respondents spent less money on these articles, caused by the crime itself and the elimination of the offense.

Only 15% of Russian companies from the survey spent an amount equal to the amount of damage incurred to investigate crimes. About 22% noted that they spent two to ten times more than the amount of the loss due to the crime. Thus, the indirect damage to business from an economic crime can more than double the amount of direct damage, writes PwC, calling such statistics threatening.

Criminals of middle level

In Russia, almost half of the respondents indicated that among the scammers, employees of their own companies prevail (48%). The number of external scammers who were named as the main threat increased from 33% in 2016 to 39% in 2018.

Both in Russia and throughout the world, economic crimes are committed mainly by middle managers (47 and 37% respectively). In the last two years, the share of fraudsters among top-level managers in Russia has increased from 15 to 39%. Such economic crimes are difficult to detect, they destroy corporate culture and set a negative “tone from above,” the authors of the study say. The leaders of the junior level commit 14% of crimes.

As more and more integration of high technologies into everyday life is used not only to monitor economic crime, but also to commit crimes, the survey follows. In Russia, 26% of respondents pointed to hackers as one of the main threats, but this is less than the global figure (31%).

Fraud of tomorrow

In its study, PwC also cites Russian business expectations about the threats that they may face in the next two years. The top four included fraud in the procurement of goods and services (16%), cybercrime (15%), bribery and corruption (15%) and misappropriation of assets (9%).

According to the portal of legal statistics of the Prosecutor General’s Office, the number of economic crimes in Russia has been declining since 2015 (112.4 thousand) and in 2017 it was 105 thousand. At the same time, the number of indictees accused of committing crimes of property and economic nature (including thefts , robbery, acquisition and sale of property, known to be obtained by criminal means) with the status of an entrepreneur or a leader is about 6-8 thousand per year, the research report ( pdf ) of the Institute for Problems of Law Enforcement “Lessons of Liberalism the administration of justice in criminal matters in the economic sphere in 2009-2013 “.

Discrepancy with statistics

To economic crime from criminal statistics, the PwC study has a weak attitude: a very small fraction of what is the subject of this study is registered as official crimes, and vice versa, an insignificant share of actions registered as crimes falls into such studies, RBC said. a member of the Institute for Problems of Law Enforcement (St. Petersburg) Kirill Titaev. “The survey includes three key categories of crimes: crimes committed by employees, clients and partners,” the expert argues. – It does not get a very important thing – ordinary theft, from which companies incur a loss (for example, if a company has stolen anything from a construction site). ”

The data in the PwC report most likely reflects only a part of reality due to the specifics of the sample; judging by the description, mostly top managers of large companies were surveyed, who in overwhelming majority do not work in the sphere of trade and services, explains Irina Chetverikova, junior researcher at the Institute for Enforcement Problems. Therefore, to disseminate the findings of the study to the entire Russian economy, I would not, the expert admits.

The data from victimization surveys (interviews with victims of crime, as in the case of the PwC.- RBC study ) can help with the assessment of the dynamics of crime in the economic sphere, in contrast to official statistics, Chetverikova notes. The latter are strongly influenced by the accounting system, she adds.

Companies very rarely give publicity to economic crimes, especially if they are single-point conflicts, Nazarov adds. This also happens if the company’s reputation can suffer, Chetverikova notes. As a rule, they turn to law enforcement bodies only in blatant cases with a large amount of damage or if it has developed into a systemic problem. In other issues, companies are trying to defend themselves, attract specialists for outsourcing, use the services of consulting companies. And they are increasingly increasing the budget for such operations in order to minimize risks, he explains.

The fact that Russia is at a very high place in the PwC rating is explained by two factors, Titaev said. First, Russia has a very regulated economy and not a very high culture of a market economy, which creates all conditions for a large number of such crimes. Secondly, in Russia “on a discursive level” the level of criminalization of economic events is high: what is interpreted in some countries as a normal labor conflict is much more often described in terms of the Criminal Code, the expert says.

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