The Risk Professional: new report shows bribery trends in Brazil

TRACE claims that its report is the only one of its kind and that the approach has been adopted in China, India, Russia, Ukraine and Mexico.

"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 company's summary of the report says "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 favourable treatment, such as having certain customs requirements waived (11%), or winning new business (9%)."