High Risk Markets
Rheinmetall is exposed to a wide variety of risks that vary depending on the business unit, industry and region. Our corporate policy is aimed at generating good return yields over the long term, looking at any opportunities and leveraging and expanding success potential while at the same time avoiding and minimizing the associated risks.
Hence, our standardized risk management system and procedures are designed to systematically identify developments early on that could jeopardize the continued existence of the Group and control risks that could endanger the company’s success. While doing so the identification of corruption risks plays a crucial role.
The identification of high risk markets and the connected corruption risks plays a crucial role. Therefore, our approach to new customers, cooperations and sales partners takes into account not only the corruption risk of a certain country which are measured on the basis of internationally acknowledged corruption indices for perceived corruption and the level of democratization in this country, but also the corruption risk measured for specific markets, goods or services.
Based on those factors an individual risk score is calculated for each foreseen business transaction. The risk score defines the depth of the Compliance Due Diligence to be performed on each third party.
Also, as published in connection with our Anti Money Laundering Policy we have clear instructions on how to behave when dealing with so called "offshore countries". Since payments in connection with offshore countries are always subject to an increased risk for tax evasion and economic crimes such as money laundering, corruption or fraud they generally require critical consideration. Business relations with partners in offshore countries are handled by Rheinmetall only in exceptional cases. In particular, the selection of business partners and documentation of services to be performed / actually performed must meet increased requirements and falls under specific scrutiny.
For more information on this subject, please also refer to the new AR 2019, p. 76 and to a statistical overview of 2019 sales by countries divided into corruption risk clusters after Transparency International Corruption Perception Index 2019.