Steep rise in reported economic crimes in Czech Republic

There has been a steep rise in the number of economic crimes reported by companies in the Czech Republic, according to the latest PwC Global Economic Crime Survey.

“In 2011, the number of Czech companies detecting frauds (29 percent) was below the regional and global average (30 percent, respectively 34 percent),” according to the survey’s authors. “This year, 48 percent of respondents indicated their companies had experienced economic crime in the past 24 months, well above the regional and global average (38 percent and 37 percent, respectively).”

With almost half of respondents indicating that they had encountered economic crime since the survey was last conducted, the Czech Republic is well above the regional and global averages. However it is only two percentage points above its neighbour Poland, where 46 percent of companies reported encountering economic crime over the past 24 months.

While some of the rise might be explained by increased awareness and detection of crimes, the survey also indicates that criminals are become more inventive. This is perhaps most evident in cybercrime, which was added as a category in 2011 and has since seen an 18 percentage point increase in reported incidents, with 31 percent of respondents having encountered cybercrime since last surveyed.

“The attackers have changed, which means they use sophisticated and persistent methods, they target specific information for strategic gains, they work across the globe, they are structured and organised and some of them act on behalf of states,” wrote Tomas Kuca, Risk Assurance Partner at PwC, in the report.

It is likely that the actual occurrences of crimes such as bribery, cybercrime and procurement fraud are even higher than the indicated by the report, as they are very difficult to detect. Other types wrongdoing, such as bribery and corruption, are widespread and relatively visible. These crimes are nonetheless among the most serious risks to businesses.

“In recent years, corruption has become a topic of public discussion in the Czech Republic, and for good reason. Corruption is among the most serious economic crimes and is seen as the greatest risk in doing business globally, both in terms of loss of reputation and monetary loss. In terms of occurrence, it is the fourth most noted type of economic crime in the Czech Republic (27 percent) and the third globally in GECS 2014 (27 percent). CEE are, along with Africa, the regions with the largest prevalence of corruption.”

 

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