Dubai businessman says bribery in Middle East commercial life ‘swept under the carpet’
Speaking at a forum of the Alternative Investment Management Association in Dubai, Mr Kanoo spoke out against the problems, which he said had “been swept under the carpet in this part of the world”.
Mr Kanoo, whose family firm is one of the biggest diversified conglomerates in the UAE, said that “white collar crime” was a persistent problem in the region, and penalties against it are not severe enough.
“White collar crime is more damaging than blue collar crime, yet nothing happens to them. Why should white collar criminals get away with it?” he said on the sidelines of the conference.
Mr Kanoo explained: “As far as investors are concerned, the person with the money to invest is the most important person in a deal, yet that person, let’s call him Person X, is not always the most sophisticated.
“The problem is access to that person. There is always a gatekeeper to Person X, and wheels have to be greased. If your ethics don’t allow you to do that, you have a problem. The gatekeeper is there to enrich himself or herself, not Person X and not you as an investor.”
He added: “The UAE bribery laws are opaque, and the owner of the money - Person X - isn’t aware it is happening. But from a religious and cultural point of view, it is unacceptable. It is difficult to legislate to stop it, but you can legislate stronger punishment and be constantly vigilant against it.”
Mr Kanoo, who is managing director of the family group, has spoken out strongly in the past on subjects as diverse as education, global politics and business leadership.
According to Al Tamimi & Co, one of the region’s leading law firms, anti-bribery legislation has been in place in the UAE since the 1980s, under the UAE Federal Penal Code.
The legislation identifies bribery as “anything that confers a benefit on a public or private sector employee ... with the intent to procure that such an employee acts in a way that violates the duties assigned to his function or to commit an act which falls outside such duties”.
Transparency International, the non-governmental organisation that scrutinises global corruption, rates the UAE as the best practitioner of transparency and public sector accountability in the Arab world. In 2013, the Emirates were ranked 26th in the world, out of 177 countries, on criteria gauging the likelihood of bribery among public officials.
Michael Kerr, a Dubai-based partner of the international law firm Dentons responsible for Middle East business, said: “I’m not surprised to hear anti-graft sentiments expressed in a regional context. The USA and UK have become particularly tough in their actions against bribery and corruption recently.
“I don’t think bribery and corruption is endemic in the UAE, and as a whole the Gulf is getting there in terms of transparency in business. But standards are rising internationally, and that will put pressure on regional policymakers and enforcers too,” Mr Kerr added.
Mr Kanoo said: “How do these actions of the gatekeepers differ from corruption, bribery, fraud or wasta? There is the problem of course of how you distinguish a gift from a bribe. If you are meeting the leader of a powerful tribe, you give him a gift to honour him. It would be disrespectful not to give something.
“But that is for the leader. The gatekeeper who takes the gift instead uses it for his own benefit, not for the owner of the money,” he added. He said that potential business partners of big family firms should find a proper sponsor to arrange introductions.
Earlier this month the drug maker GlaxoSmithKline said it was looking into allegations of corruption in the UAE following allegations of improper payments set out in a whistleblower’s email sent to its top management.