Officials account for most demands and cash is the preferred bribe

Government officials are the source of the vast majority of demands for bribes in Brazil, according to a new report. In one case a bribe demand originated from the Office of the Vice President of Brazil. And a significant number of bribe demands (36%) were made by the police.

More commonly the demands for a bribe were extortionate, i.e. payments were sought in exchange for avoiding harm to personal or commercial assets. Slightly fewer bribes were paid to receive an undue advantage in some form, such as circumventing bureaucracy.

The report, by the not for profit organisation Trace International, summarised information about 121 incidents of bribe demands made between July, 2007 and June, 2010. The findings reveal a complex bribery landscape.

Government officials are the source of over 80% of bribe demands in Brazil. Bribe demands made by government officials at a local level represented 8% of all bribe demands. National government officials accounted for 11% of the demands.

The majority of demands requested a bribe of less than $5,000. However, 8% of all reported bribe demands in Brazil involved amounts in excess of $50,000.

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 intangibles such as assistance with visas, arranging for medical care or covering tuition payments.

Almost one out of every two bribe demands made in Brazil involved a recurring request for a bribe; that is, the same source demanded a bribe multiple times in a given year, according to the research. And most times the the request was made between two and five times in a given year.

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%).

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%).

“Companies that do business in Brazil should take note of its increased focus on foreign bribery, said Trace Founder and President Alexandra Wrage. “Brazil is currently investigating several multinational corporations for allegedly bribing its government officials.”

"Simply knowing what to look for greatly enhances compliance policies," noted Wrage.

The UK and US have new bribery laws, just as developing countries demand more local involvement in western companies' work. Neil Hodge looks at how businesses should protect themselves