Anti-bribery and anti-corruption (ABAC)

An anti-corruption policy is an organisation's internal document that sets out rules and procedures for preventing bribery and corruption across all areas of its activity. It forms part of a broader anti-bribery management system and helps build a culture of integrity, transparency, and accountability.

An anti-corruption policy normally includes:

• definitions of corruption risks and special focus areas;

• rules for engaging with government authorities, partners, and suppliers;

• limitations on gifts, conflicts of interest and sponsorships;

• whistleblowing mechanisms;

• liability for breaches of the policy.

Under Article 13-1 of the Law of Ukraine on Prevention of Corruption, public authorities, enterprises, and other organisations must either set up an independent unit or appoint authorised persons to implement their anti-corruption programme.

In the private sector, these functions can be fulfilled by:

• compliance officers;

• legal or risk management departments;

• the Management Board or Supervisory Board, where no dedicated compliance function exists.

In international practice and according to ISO 37001, an organisation should assign an individual or a group of individuals to be responsible for the implementation and improvement of an anti-bribery management system.

PwC Forensic helps organisations develop, adapt and implement an anti-corruption policy as required by law and international standards, in particular ISO 37001.

The availability of an anti-corruption policy is not only an indication of responsible corporate governance but also a key requirement for participation in numerous tenders, specifically in those funded by international donors, governments or the EU institutions, the UN, the World Bank, etc. Such policies represent represent an important element of an anti-corruption system enabling organisations to act transparently, responsibly and in compliance with the law.

According to the Law of Ukraine on Prevention of Corruption (Law No. 1700-VII), organisations seeking to participate in public procurement or international projects are required to implement effective anti-corruption mechanisms.

Why it is important:

• A formal tender documentation requirement;

• Evidence of an integrity-driven organisation;

• Mitigation of reputational risks;

• Compliance with international standards.

To effectively prevent and manage corruption and bribery risks, organisations should implement a set of core policies and procedures aligned with Ukrainian anti-corruption legislation, international standards, including ISO 37001, and recognised corporate governance best practices.

These policies form the foundation of an anti-corruption compliance system that enables organisations to operate transparently, responsibly and in compliance with applicable national and international laws.

Such policies and procedures include:

• Anti-corruption policy;

• Conflict of interest management policy;

• Code of Ethics and Conduct;

• Counterparty due diligence procedures;

• Whistleblowing mechanisms;

• Internal investigation procedures;

• Ongoing personnel training programmes;

• Corruption risk assessment;

• Internal control and audit system.

These elements can be integrated into an organisation's general risk management and compliance system.

PwC Forensic provides comprehensive services for the development and implementation of policies and procedures encompassing the Code of Ethics and Conduct, due diligence procedures and internal controls.

Corruption and fraud in business processes can have both apparent and subtle signs. They often manifest through unusual patterns in staff behaviour, financial transactions or documentation. Based on PwC Forensic’s experience and international surveys, specifically the Global Economic Crime Survey (GECS) prepared by PwC and the Report to the Nations published by the Association of Certified Fraud Examiners (ACFE), the typical indicators (red flags) of corruption and fraud include:

• Unusual or non-transparent financial transactions, particularly payments without an appropriate justification, inflated budgets, dual bookkeeping, etc.;

• Conflict of interest when a responsible person makes a decision in favour of related parties or suppliers;

• Excessive concentration of powers in one person or the absence of a segregation-of-duties principle;

• Absence or weakness of internal controls, which creates conditions for irregularities (32% of fraud cases occurred due to the absence of internal controls);

• Abuse of existing procedures, e.g. an override of tender requirements or contract manipulation (19% of fraud cases occurred due to an override of existing controls);

• Suspicious activity in key functions — operational management, accounting, sales, customer support and senior management (these are the areas where irregularities are most often observed);

• ‘Red flags’ observed in staff behaviour: reluctance to take vacation, excessive secrecy, pressure on colleagues and sudden unexplained wealth.

It is also important to consider information from external sources, particularly from open registers, mass media and sanctions lists that could indicate corruption and fraud risks associated with counterparties and employees.

The PwC Forensic team carries out a business process assessment to detect corruption risks and helps implement effective controls.

Raising employee awareness of corruption risks and prevention measures is a key component of an effective anti-corruption compliance framework. This is not only a requirement of international standards but also a practical risk mitigation tool.

The key benefits of anti-corruption awareness include:

• Fostering a culture of integrity;

• Reducing a risk of irregularities; 

• Improving internal control performance;

• Meeting donor, partner and regulator requirements;

• Increasing the level of confidence in an organisation;

• Enhancing a reputation. 

PwC Forensic delivers training courses, workshops and communication campaigns to foster a culture of integrity within an organisation.

Performing a regular corruption risk assessment is not only an element of effective anti-corruption compliance but also a requirement of the Ukrainian legislation. According to Article 61 of the Law of Ukraine on Prevention of Corruption dated 14 October 2014 No 1700-VII:

“The chief executive and founders (participants) of a legal entity conduct a regular assessment of corruption risks in its activities and implement appropriate anti-corruption measures.”

A regular corruption risk assessment enables an organisation to:

• Identify vulnerable processes where potential corruption risks may arise;

• Respond proactively to developments in the internal and external environments (e. g., new regulatory requirements or changes in an organisational structure);

• Improve performance of internal controls and procedures;

• Enhance partner, investor, donor and regulator confidence;

• Prepare for inspections by supervisory authorities;

• Foster a culture of integrity and transparency within an organisation.

PwC Forensic helps organisations conduct a consistent corruption risk assessment and develops risk maps including the risk mitigation recommendations.

Responding to corruption risks involves reducing, mitigating or eliminating risks that could lead to corruption-related misconduct or violations. The effective management of such risks involves the implementation of systemic, organisational and behavioural measures as part of corruption prevention and tackling.

Key approaches to mitigating corruption risks can be distinguished:

• Business process standardisation – implementing clear procedures with segregation of powers and responsibilities;

• Segregation of incompatible functions – e. g., segregating approval, execution and control functions in procurement, finance and HR decision-making;

• Implementation of an anti-corruption policy and the Code of Ethics and Conduct– including clear rules on conflicts of interest, gifts and charity;

• Personnel training – ongoing training in ethics, corruption prevention and a responsibility for irregularities;

• Implementation of whistleblowing channels and tools;

• Internal investigations – a required response to each fact of an alleged irregularity including formalisation of findings and a responsibility.

These measures allow not only mitigating potential corruption and bribery risks but also enhancing partner, donor, investor and regulator confidence in an organisation.

A corruption risk map is the tool enabling an organisation to identify, assess and control areas of high vulnerability to corruption and bribery in its activities consistently. It is an important part of a corruption prevention  system and meets requirements of international standards, specifically ISO 37001.

A risk map typically includes:

• key business processes and roles within an organisation;

• potential corruption scenarios or risk points;

• a probability and impact assessment of each risk;

• responsible structural units and key employees;

• recommended measures to prevent, detect and tackle corruption.

How it helps:

• Enabling an organisation to respond to risks proactively rather than to eliminate consequences;

• Ensuring transparency and soundness of management decisions;

• Improving internal control performance;

• Facilitating compliance with the corruption legislation, specifically with the Law of Ukraine on Prevention of Corruption;

• Being an important argument for partners, donors and regulators that an organisation has a robust anti-corruption system in place.

PwC Forensic develops tailored risk maps for organisations, which allows managing vulnerable areas effectively and efficiently and meeting regulatory requirements.

Implementing ISO 37001, the international standard for an anti-corruption management system, is not required by the legislation of Ukraine. However, it is becoming a strategic necessity for many organisations, especially if they:

• participate in international tenders;

• raise financial investments;

• operate in regulated or high-risk sectors;

• seek to increase the level of internal integrity and transparency.

Key benefits from implementing ISO 37001:

• Enhanced confidence and reputation – an organisation demonstrates its commitment to ethical standards and transparency, which is crucial for entering international markets or dealing with donors;

• Mitigated corruption risks – a consistent approach to risk identification, assessment and removal allows avoiding penalties, loss of business opportunities and reputational damage;

• A competitive advantage in tenders, specifically in public and international ones, as the implemented standard can become a determinative factor;

• Improved management effectiveness – clear procedures, segregation of powers and control reduce the scope for irregularities;

• Optimised costs – a withdrawal from informal practices contributes to more transparent and efficient use of resources;

• Preparedness for inspections and audits – an organisation is better prepared for external control by partners, donors and regulators.

PwC Forensic provides its full support in preparing for certification under ISO 37001 – from an assessment of current practices to a preliminary audit and personnel training.

PwC Forensic in Ukraine provides end-to-end support for the design and implementation of anti-corruption policies tailored to an organisation's business model, industry sector and regulatory environment.

This includes:

• an analysis of your organisation's needs, taking into account its unique challenges;
• alignment of policies with the specific environment of the jurisdiction to ensure legal compliance; and
• development of ethical standards and procedures to prevent, detect and tackle corruption.

If needed, we also:

• implement state-of-the-art control systems to maintain risk monitoring;
• deliver personnel training focused on compliance with ethical standards; and
• conduct ongoing review and assessment of the effectiveness of implemented policies.

This detailed approach helps mitigate potential corruption risks, enhance the organisation's reputation and strengthen partner and customer confidence, while improving overall business security and performance.