South Africa’s Corruption Index Gets Worse 

Transparency International – a global non-profit organization dedicated to monitoring and combatting corruption – has released its most recent evaluation of South Africa’s corruption levels. 

Transparency International rating the country at 41/100 for 2023. The lower the score out of 100, the more corrupt the country.

Since 2021, South Africa’s rating has decreased by five points in eight years. From a high of 46/100 in 2016, the country’s rating has slid down to 41/100 in 2023. 

What do these worsening corruption levels mean for South African businesses? Here are three key points. 

1. Adverse Media Checks are Becoming Essential for Reputational Risk 

Adverse media is undesirable or negative information regarding an individual/legal entity. This negative information and/or news coverage can be discovered across a variety of sources, such as news sites, online blogs and social media posts. 

An example of adverse media could be news articles reporting on a large corporation’s involvement in a corruption scandal – hundreds of these high-profile stories are published every year. 

An adverse media check is a “scan” used to detect such undesirable or negative information. If done correctly, an adverse media check can reveal a party’s involvement or complicity in serious events such as corporate fraud, political corruption and organized crime. 

Adverse media checks are often conducted in conjunction with sanctions checks and will therefore form part of a company’s risk mitigation strategy and AML/CFT regulatory compliance framework.

Furthermore, in a country where corruption is rife, adverse media checks are a valuable tool for protecting your company’s reputation. Thousands of businesses in South Africa have been caught up in corruption scandals. Every time that this happens, adverse media is generated on such businesses, which can then negatively impact your business. 

If your business has invested in building a strong reputation based on trust and accountability, it can be destroyed if you enter into a partnership with a business that has previous or existing corruption allegations against it. Adverse media checks empower your company to better mitigate these risks. 

Click here to read our detailed explanation of the importance of adverse media checks. 

2. Politically Exposed Persons (PEPs) are a Persistent Risk 

A PEP is an individual who currently hold or have held political power. Due to the interwoven nature of politics and private capital, governments and financial institutions worldwide agree that PEPs represent an increased money-laundering risk. This is because individuals who hold political power can abuse their power to engage in money laundering and other financial crimes like corruption, bribery, embezzlement and the financing of terrorism. 

The risk posed by PEPs skyrockets in countries where corruption is widespread, especially if this corruption is present at the national and local levels of government. 

In addition to being a reputational risk, PEPs also remain a compliance risk. In South Africa, many companies are legally obligated to conduct PEP checks on individuals before doing business with them, as well as implementing additional due diligence measures if a client is revealed to be a PEP. 

ThisIsMe offers PEP checks and sanctions scans that empower your business to easily stay compliant. 

3. Sanctions Checks and Watchlist Screening Becomes an Essential Tool 

Sanctions and Watchlist Screening is an essential for two reasons. 

First, such due diligence checks are required by Anti-Money Laundering (AML) legislation. Failing to comply with this legislation can result in significant fines and even criminal charges, as well as reputational fallout. 

Second, a comprehensive sanctions and watchlist screening protocol becomes even more essential in countries with widespread corruption. This is because when corruption in a country is widespread, corrupt deals are often done with businesses and individuals in other countries and jurisdictions. 

To mitigate this risk, ThisIsMe offers a range of business due diligence services that empower you to protect your reputation and always know who you are dealing with. 

PEP Checks and Adverse Media Check Services for South Africa 

As South Africa’s leading provider of world-class due diligence and automated digital onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team here.