Anti-Bribery Compliance Solutions

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BUSINESSREGISTRYFORINTERNATIONALBRIBERYANDEXTORTION(BRIBEline) 2010MEXICOREPORT

ThisreportsummarizesinformationaboutbribedemandsmadeinMexicoandreportedto BRIBEline between July 11, 2007 and January 6, 2010. The objective of this report is to identifypatternsinreportedbribedemandsinMexico. The 2010 BRIBEline Mexico Report is the fifth BRIBEline report published by TRACE. Please visit www.BRIBEline.org to view the 2008 BRIBEline China Report, the 2009 BRIBElineIndiaReport,the2009BRIBElineRussiaReportandthe2009BRIBElineUkraine Report.
KeyFindings

FortyfivepercentofallreportedbribedemandsinMexicoweremadebythepolice. Over 85% of all reported bribe solicitations in Mexico were made by people associated with the government, including the police (45%), nationallevel government officials (12%), provincial or state government officials (10%), employees of stateowned entities (6%), city officials (4%), judges or representativesofthejudiciary(4%),membersofthemilitary(2%)orrulingparty officials(2%). Over55%ofsurveyrespondentsreportedthatabribedemandwasrecurring(i.e.,a bribewastobeprovidedmorethanonce).Fifteenpercentofthosewhoreported receiving recurring bribe demands indicated that they had received bribe solicitationsmorethan100timesinagivenyear. Cash(oritsequivalent)wasdemandedinmorethan80%ofthereportedincidents of bribe demands in Mexico. However, in nearly 20% of the reports, those who demandedbribeswerewillingtoacceptnoncashpayments,includingthepromise of additional business (5%), sexual favors (4%), some other benefit such as help with medical bills or tuition (4%), a gift or other item of entertainment or hospitality(4%)ortravel(2%). SixtyfivepercentofallreportedbribedemandsmadeinMexicowereforamounts less than US$5,000. On the other end of the spectrum, 6% of all reported bribe demandsinMexicowereformorethan$50,000. AlmosthalfoftheMexicoreportscitedextortionastheprimarypurposeofthebribe demand. For example, in these cases, the bribe was demanded in order to avert harmtopersonalorcommercialinterests(23%ofallbribedemandsinMexico),to receivedeliveryofservicestowhichtheintendedbribepayerwasalreadyentitled (15%) or to receive payment for services already rendered (6%). On the other hand, in nearly 30% of the reported cases, the proposed bribe was intended to

bestow some form of preferential treatment, including exercising influence over another government official (10%), receiving inappropriate favorable treatment (9%)andwinningnewbusiness(9%).

ComparativeAnalysis AnanalysisoftheBRIBElinedataonMexicorevealscertaindistinctbriberypatterns.The policearethelargestsinglesourceofbribedemandsinMexico.Recurringbribedemands arerelativelycommon,andwhentheydooccur,aremostlikelymadebetweentwoandfive times in a given year. Cash is the overwhelmingly preferred form of payment and the amountdemandedisgenerallyamodestsum. ThefollowingchartcompareskeyfindingsfromtheMexicoBRIBElineReportwithrelevant dataintheRussia,India,ChinaandUkraineBRIBElineReports.
BRIBEline Dimension Bribedemands madeby individuals associatedwith thegovernment asagroup Bribes originating fromamember ofthepolice Bribedemands mademore thanonetime inagivenyear (recurrence) Ofrecurring bribedemands, percentof bribesmade morethan100 timesinagiven year

MEXICO

UKRAINE

CHINA

INDIA

RUSSIA

85%

92%

85%

91%

91%

45%

18%

11%

30%

41%

57%

66%

73%

47%

56%

15%

7%

19%

9%

4%

 BRIBEline Dimension Ofrecurring bribedemands, percentof bribesmade betweentwo andfivetimes inagivenyear Bribedemands forcash Extortionate demands Bribedemands madetogainan undue advantage Bribedemands foramounts lessthan $5,000 Bribedemands foramounts greaterthan $50,000

MEXICO

UKRAINE

CHINA

INDIA

RUSSIA

56%

54%

44%

60%

56%

81% 44%

87% 58%

77% 54%

92% 77%

88% 63%

28%

16%

32%

12%

16%

65%

82%

51%

84%

87%

6%

4%

10%

5%

4%

Methodology BRIBEline, a project managed by TRACE International, Inc., is an anonymous, online reportingtoolthatcollectsdataaboutbribesolicitationsmadebyofficial,quasiofficialand privatesectorindividualsandentities.BRIBElineisasecure,multilingualwebsiteavailable in 21 languages. BRIBEline focuses on demandside bribery only; no information is requestedorcollectedaboutthosewhopay,oroffertopay,bribes. TheBRIBEline2010MexicoReportsummarizesinformationabout151incidentsofbribe demandsmadeinMexicoandreportedtoBRIBElineintheperiodbetweenJuly11,2007 andJanuary6,2010. Fullsurveyresultsfromthe2010MexicoBRIBElineReportfollow.
3

Whorequestedthebribe?

Police GovernmentOfficial Other ProvincialorStateGovernmentOfficial EmployeeofaStateOwnedEntity CityOfficial JudgeorRepresentativeoftheJudiciary PrivateCompanyRepresentative Military RulingPartyOfficial 6% 4% 4% 3% 2% 2% 12% 12% 10%

45%

TheoverwhelmingmajorityofreportedbribedemandsinMexico85%wererequested by a person associated with the government, including a member of the police (45%), a nationallevelgovernmentofficial(12%),aprovincialorstategovernmentofficial(10%), anemployeeofastateownedentity(6%),acityofficial(4%),ajudgeorrepresentativeof thejudiciary(4%),amemberofthemilitary(2%)orarulingpartyofficial(2%). Certainsurveyrespondentswhoindicatedthatanationallevelgovernmentofficialwasthe source of a bribe demand also identified the specific government ministry or entity involvedinthedemand.Specificministriescitedbythesesurveyrespondentsincludethe ministry responsible for education (representing 11% of all bribe demands made at the nationalgovernmentlevel),theministryresponsibleforthejusticesystem(11%),aswell asthevariousministriesresponsibleforcustoms,environment,housing,internalsecurity, labor, mines and minerals, oil and gas, and visas and immigration (each such ministry representing slightly over 5% of these bribe demands). In addition, the Central Bank of Mexico represented approximately 5% of the bribe demands made by nationallevel governmentofficialsinMexico.

Iftherequestforthebribewasrecurring(i.e.abribewastobe providedmorethanonce),approximatelyhowfrequentlydidthe requestrecurinagivenyear?

56%

23% 15%

4% 1% 5timesorfewer 620times 2150times 51100times Morethan100 times

Approximately 57% of survey respondents reported that they received multiple bribe demands from the same source. Seventynine percent of those who received recurring bribe demands were solicited between two and twenty times in a given year. Fifteen percentoftherespondentswhoreceivedrecurringbribedemandsreportedbeingsolicited forabribemorethan100timesinagivenyear.

Whichbestdescribestheprimaryformofthebriberequested?

Cashorcashequivalent

81%

AdditionalBusiness

5%

SexualFavors Otherbenefit(assistancewithvisas,medical care,scholarshipsforhighereducation,etc.) Gift,EntertainmentorHospitality

4%

4%

4%

Travel

2%

Cash is the overwhelmingly preferred form of bribe payment in Mexico, representing the proposed payment method for 81% of all reported bribe demands in Mexico. However, thosewhodemandedbribesinMexicosoughtotherformsofpaymentinnearly20%ofthe reported cases. Such noncash payments include providing additional business (5%), sexualfavors(4%),someotherbenefitsuchashelpwithmedicalcostsoreducation(4%), anditemsofgifts,entertainment,hospitalityortravel(collectively,6%).

Pleaseindicatetheprimarynatureoftherequestedbribe:

Other Avoidingharmtoyouoryourbusiness'interests Receivingtimelydeliveryofaservicetowhich thereporterisentitled Exercisinginfluencewithoroveranother governmentoffical Receivinginappropriatefavorabletreatment suchasinacourtruling Winningnewbusiness Receivingpaymentsforservicesalready rendered 6% 10% 9% 9% 15% 23%

29%

Nearlyhalfofallsurveyrespondentsreportedbeingthevictimofanextortionatedemand, including avoiding personal harm or harm to business interests (23% of all bribe demands), receiving the timely delivery of a service to which the target of the bribe demandisalreadyentitled(15%),orbeingsolicitedforabribeinordertoreceivepayment for services already rendered (6%). In nearly 30% of the reported cases, the proposed bribe was intended to bestow some form of preferential treatment, including exercising influence over another government official (10%), receiving inappropriate favorable treatment(9%),andwinningnewbusiness(9%).

Whatwasthevalueoftherequestedbribe?

27%

16% 12% 10% 9% 4% 2% 2% 2%

15%

SixtyfivepercentofreportedbribedemandsinMexicowereforamountslessthan$5,000. On the other end of the spectrum, 6% of all reported bribe demands in Mexico were for morethan$50,000.