Transcript SAI INDIA
SAI INDIA COUNTRY REPORT THE IInd MEETING OF 10 ARP CURRENT LEVEL OF CORRUPTION 1 Current characteristic level Serious and pervasive in most or all sectors 2 Level now with past year 3 Transparency International-Corruption Perception Index No About same as past years rank reflect reality 4 Global Integrity Index rank reflect reality No 5 Peoples' opposition Weak 6 Governments' opposition Weak 7 Corruption dealing Highly predictable and visible from certain pattern 8 Rank as per prevalence 1. Grand – misuse of entrusted power of politicians and Petty corruption – everyday at all levels 2. Enterprise Level 9 Main pattern in country Both in public and private entities 10 Petty corruption Serious 11 Main petty corruption Medium management/Supervisors 12 Main patterns of petty Bribes paid for expediting public services and to corruption avoid law. 13 Grand corruption Serious 14 Main grand corruption Elected officials and their personal favorites 15 Common types 1. Abuse of position/power; Bribery; Nepotism. 2. Influence peddling 3. Extortion 4. Kickback; 5. Criminal breach of trust 6. Embezzlement 7. Forgery 16 Most vulnerable sectors Customs; Law enforcement/police; Public service delivery; Taxation; . Education; Energy; Local Govt./Municipalities;. Judiciary; . State owned enterprise Legislature; Environment; Agriculture. 17 18 Greatest probability of Procurement of contracts; Revenue (Taxes) collection; Licensing and occurrence in Govt. activity franchising Use of money/asset gained from Acquiring assets; Invest in real estate; Leisure/social activities corruption 19 Root cause Complicated and cumbersome administrative procedure; Unclear rules and loopholes for manipulation; Culture, customs and habits of giving bribes to get things done; Low salary; Lack comprehensive, effective and failure in legal system; Rapid population and economic growth; To become rich as quick as possible; Lack of rules and procedures; Absence of regulatory and legal system to combat corruption. 20 Whether grand and petty corruption is derived from patronage-client system Agree 21 Weak accounting practices Agree including lack of timely financial management favor corruption 22 As an enforcement agency, Not a priority priority of monitoring corruption 23 As an enforcement agency, High priority priority of public complaints on corruption 24 As an enforcement agency Very important emphasis on whistle blower in corruption reporting 25 Could whistle blower support complaints of corruption Strongly support 26 Extent of damage to State Budget in terms of economic Very serious 27 Extent of damage to firms in terms of economic Serious 28 Extent of damage to citizens in terms of economic Serious 29 “Corruption during budget formulation is primarily grand or Agree political corruption and is influenced by the distribution of budgetary powers between the executive and the legislature.” (Quote by Martinez-Vazquez, Arze, and Boex 2004). 30 “Unchecked and excessive executive discretion in the Strongly agree budget process tends to create opportunities for political corruption. Politician or senior level bureaucrats are able to provide subsidies or favourable tax treatments to favoured citizen groups or allocate budget resources to projects areas based on political connection.” (Quote by MartinezVazquez, Arze, and Boex 2004) 31 “Public Financial Management System weakness during budget formulation can increase the risk of administrative corruption during budget execution.” (Quote by Dorotinsky and Pradhan, 2007) Neither agree nor disagree CURRENT STATUS OF MONEY LAUNDERING 1. 2. 4 Situation in the country Tends to increase in recent years Is more sophisticated over the years Pattern in the country 5 6 Highest risk ranking Common methods 3 Serious Strongly agree Corruptive practices through money laundering mostly observed in private sectors Real Estate ; Finance, Banking; 1. Business; Real Estate;2. Cash transaction;4. Stock Market;5. Money exchange; Project;8. Casino 7. Favorable environment - Bank and financial institutions do not have suitable supervision/control system to anti money laundering - Use of cash and illegal money transfer is dominant 8. Offences closely associated * - Corruption; - Production, buying and selling of illegal goods; - Drugs Evaluation of Money Laundering Situation Methods Experience level Non experience level Use of Corporate vehicles and Trusts Use of Gatekeepers Use of Domestic Financial Institution Use of Offshore/Foreign jurisdiction Use of nominee Often Use of cash and its placement into the financial system Often Reasons for criminals laundering - Becoming legitimate - Evading taxes - Hiding illegally accumulated wealth Often Sometimes Often Often 11. 12. 13. 14. Consequences - Increased crime and corruption * - Weakened financial institutions Economic and social consequences Impact on national security, international reputation and economy Significant incidences between 2007 – 2012 - Reduced government tax and revenue and weakened government control over the economy Serious Very serious Allocation of Coal Blocks; Payment of Indian Officials by ORACLE (FCPA) Payments to Indian Officals by DIEGO (FCPA)