ANNAPOLIS, Md., Aug. 31 /PRNewswire/ --Today, TRACE released the results of its latest country report on demand-side bribery, the only report of its kind, the 2010 BRIBEline Brazil Report. This is the sixth BRIBEline country report issued by TRACE following BRIBEline country reports on China, India, Russia, Ukraine and Mexico.
To read the full report, please visit www.TRACEinternational.org/news.
"Latin America is experiencing robust economic expansion, and Brazil is leading the region in terms of growth," said TRACE Founder and President Alexandra Wrage. "However, companies that do business in the region should take note of Brazil's increased focus on foreign bribery. Indeed, Brazil is currently investigating several multinational corporations for allegedly bribing its government officials. Our BRIBEline data helps mitigate the risks inherent in international transactions by giving companies specific insight into what bribe demands in Brazil look like," continued Wrage.
The Brazil BRIBEline data, which summarizes information about 121 incidents of bribe demands reportedly made between July, 2007 and June, 2010, reveal a complex bribery landscape. Government officials are the source of over 80% of bribe demands in that country. BRIBEline received reports of bribe demands made by government officials at the local level (representing 8% of all bribe demands reported in Brazil) all the way up to national government officials (11%). One reporter indicated that a bribe demand originated with the Office of the Vice President of Brazil. A significant number of bribe demands - 36% - were made by the police.
Almost one out of every two bribe demands made in Brazil and reported to BRIBEline involved a recurring request for a bribe; that is, the same source demanded a bribe multiple times in a given year. Of these recurring demands for bribes, over 60% of reporters indicated the request was made between two and five times in a given year and 15% indicated that a request was made more than 100 times in a given year.
Cash was the overwhelmingly preferred form of bribe payment, comprising 73% of reported bribe demands made in Brazil. However, a surprisingly high 28% of all bribe solicitations in Brazil involved demands for non-cash payments including, for example, requests for gifts and entertainment or other intangible benefits such as assistance with visas, arranging for medical care or covering tuition payments.
The value of bribe demands in Brazil tended to be fairly modest. Fifty-eight percent of all survey respondents indicated that the requested bribe was for an amount less than $5,000. However, 8% of all reported bribe demands in Brazil involved amounts in excess of $50,000. Twenty percent of the respondents were unable to assign a monetary value to the bribe demand. This tracks to the relatively high percentage of non-cash bribe demands which are more difficult to quantify.
Extortionate demands accounted for over 40% of all reported bribe demands in Brazil. Extortion includes seeking to extract a payment in exchange for avoiding harm to personal or commercial interests (21% of all reported bribe demands), receiving a service that was already paid for (15%) or receiving payment for a service that was already rendered (5%). On the other hand, the inducement for paying over 30% of reported bribe demands in Brazil was to receive an undue advantage such as gaining sway with a government official (12%), receiving inappropriate favorable treatment, such as having certain customs requirements waived (11%), or winning new business (9%).
"TRACE conducts workshops and training sessions for our member companies in Brazil. We will use this new BRIBEline data to prepare the employees and agents on the ground in Brazil to be ready to respond appropriately to repeated requests for cash or other intangible benefits from government officials. Company management, in turn, will be advised to closely monitor small cash transactions and to closely review expense reports involving gifts and hospitality reimbursements," noted Wrage. "Simply knowing what to look for greatly enhances compliance policies."
TRACE is a non-profit membership association that pools resources to provide practical and cost effective anti-bribery compliance solutions for multinational companies and their commercial intermediaries (sales agents and representatives, consultants, distributors, suppliers, etc.). TRACE provides several core services and products, including: due diligence reports on commercial intermediaries; model compliance policies; an online Resource Center with foreign local law summaries, including guidelines on gifts and hospitality; in-person and online anti-bribery training; and research on corporate best practices. For more information, visit www.TRACEinternational.org