Mali Corruption Report

Corruption in the police force is a very high risk for businesses operating in Mali, with extortion at checkpoints being particularly problematic. In addition, petty corruption among police officers is endemic (OSAC, Aug. 2015). Drivers, businesspeople and residents report that armed groups and government security forces make extortion demands (HRW, Apr. 2015). Receipts are rarely provided, and failure to pay results in beating, detention and delays; the amount asked for typically ranges between CFA 5,000 to 10,000 (USD 8.30 to 16.60) at each major checkpoint (HRW, Apr. 2015).

The police has the responsibility for urban areas, while in rural areas gendarmeries are active (HRR 2014). Aside from corruption, lawlessness and insecurity are major obstacles to business (HRW, Apr. 2015). Armed groups and government security forces often act with impunity, and mechanisms to punish abuse are ineffective (HRW, Apr. 2015; HRR 2014). Businesses demonstrate a low trust in the reliability of police forces and cite business costs due to crime and violence (GCR 2015-2016). Around half of surveyed Malians perceive most of the police to be corrupt (Afrobarometer, Nov. 2015).

Corruption is a high risk for businesses acquiring public licenses, permits or utilities. Businesses report that irregular payments in relation to public utilities commonly occur (GCR 2015-2016). Eighteen percent of Malian survey respondents have paid a bribe or provided a favor in order to obtain public services in the past 12 months (TI, Dec. 2015). There is a stark difference in the availability of public services between rural and urban areas (Afrobarometer, Nov. 2014). Starting a business takes just 8.5 days but is very costly (DB 2016).

Corruption is a high risk in the land administration. Property rights are well defined in principle, but corruption in the Malian bureaucracy negatively affects property rights’ implementation in practice (BTI 2016). This includes corrupt practices raising the transaction costs connected to obtaining a legal title and diverging concepts of ownership between nomads and the sedentary population that leads to frequent clashes between these two groups (BTI 2016). Registering property is faster but a little more costly than elsewhere in the region (DB 2016).

Customary practices in the awarding of land titles encourage speculation and fraudulent practices that, in turn, result in the arbitrary attribution of land and make it possible for private individuals or officials to monopolize government properties (IMF, July 2015). Companies should be aware of the risks of money laundering in Mali’s real estate sector, which can be attributed to the fact that real estate developers, who are the main players in the construction industry, are not formally subject to the Anti-Money Laundering law and, accordingly, have no familiarity with due diligence measures (IMF, July 2015).

There is a very high risk of encountering corruption in Mali’s tax administration. Companies report that bribes in connection with annual tax payments are commonplace (GCR 2015-2016). The total tax rate on profits is 48.3 per cent (DB 2016); however, when registering at local tax offices, tax officials frequently offer lower tax rates in return for bribes or gifts (BBC, Mar. 2015). The vast majority of surveyed Malians believe tax officials to be involved in corruption (AB, Mar. 2014).

There is a very high risk of corruption when interacting with Mali’s customs authorities: Irregular payments are common when importing and exporting goods (GETR 2014). Companies should note that fraud (through the use of import licenses that create preferential rules for individual companies) is widespread (BTI 2016). Porous borders and political instability allow for illicit trade across Mali, which over time established a network of corruption and collusion between smugglers, custom officials, and the security apparatus (Global Initiative, Apr. 2015). Higher value illicit commodities, in particular, require a great degree of protection by smugglers; this is facilitated by violence, corruption, and complicity with the high-level state officials (Global Initiative, Apr. 2015).

There is a very high risk of encountering corruption in Mali’s public procurement sector. Irregular payments or bribes in connection with the awarding of public contracts or licenses are common (GCR 2015-2016). Businesses operating in Mali report that favoritism in the decisions of government officials are common and that public funds are often diverted (GCR 2015-2016).

The Office of the Auditor General (Bureau du Verificatuer General [BVG]) has uncovered various cases of large-scale corruption. In a 2012 report, the Auditor General announced that USD 20 million in public funds had been embezzled, and in a 2013 report the number increased to USD 100 million (ICS 2015). Following the 2013 BVG report, the government submitted approximately 100 cases to the Ministry of Justice, all of which still await judicial action (ICS 2015). In 2011, the anti-corruption prosecutor announced that around USD 15 million of embezzled public funds were recovered, but no prosecutions were made (ICS 2015). Similarly, inspectors from the Global Fund for AIDS, Tuberculosis and Malaria uncovered cases of embezzlement of public and donor funds at the Ministry of Health, leading to the prosecution of several high-ranking health ministry officials (ICS 2015). Companies are strongly recommended to use a specialized due diligence tool on public procurement to mitigate corruption risks associated with public procurement in Mali.