Mali

Mali Corruption Report

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Snapshot

Mali_250x163.pngCorruption is a very high risk for companies operating in Mali. Corruption in public procurement, in the settlement of commercial disputes, and petty corruption are common obstacles for investors. Mali is one of the world’s poorest countries and is currently recovering from a multidimensional political, security and economic crisis, which is not yet overcome in parts of the country, particularly in the north. Key anti-corruption laws include the Penal Code and the Law on the Prevention and Repression of Illicit Enrichment, which prohibits active and passive corruption, mostly in the public sector. The maximum punishment for corruption offenses is 20 years’ imprisonment or fines, but the anti-corruption provisions are poorly enforced. Mali has ratified the United Nations Convention against Corruption.

Last updated: March 2016
GAN Integrity

Judicial System

There is a very high risk of corruption in the judicial system, especially through bribery and influence peddling in courts (HRR 2014). Businesses report that irregular payments or bribes to obtain favorable decisions are commonly exchanged (GCR 2015-2016). The judiciary lacks resources and professional training and operates slowly and inefficiently (BTI 2016). Judges are sometimes absent from their assigned areas for as long as months (HRR 2014). Businesses find the legal framework inefficient in challenging regulations or in settling disputes (GCR 2015-2016).

The constitution provides for an independent judiciary, but in real,ity the institution is subject to the influence of the executive (HRR 2014). In most rural areas, disputes are typically handled by traditional authorities (such as local chiefs) (FitW 2015). Dispute resolution processes can take several years, and companies should note the risk of demands for payments to facilitate the legal process (ICS 2015). Enforcing a contract takes, on average, 620 days and is more costly than elsewhere in the region (DB 2016).

Police

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)

Public Services

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).

Land Administration

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).

Tax Administration

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).

Customs Administration

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).

Public Procurement

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.

Natural Resources

There are no reports of corruption available in the sector, but the high levels of corruption in other sectors are likely to impact the natural resource industries, as well. Gold makes up 60 percent of exports, followed by cotton (ICS 2015), and is primarily extracted by international companies but also by some small-scale operators (BTI 2016). Mali is a compliant member of the Extractive Industry Transparency Initiative.

Legislation

Mali’s legal framework pertaining to corruption is inadequate, and enforcement is weak (BTI 2016). The Penal Code (CPM) (in French) criminalizes active and passive corruption. Bribery of domestic public officials is illegal, but bribery of foreign public officials and officials of public international organizations is not illegal (IMF, July 2015). Embezzlement by public officials is a criminal offense, while embezzlement in the private sector is not criminalized (IMF, July 2015). The CPM further prohibits abuse of functions, but the offense of favoritism is limited to government procurement. For corruption offenses, the CPM provides prison sentences of up to 20 years, work in the public interest, and/or a fine (IMF, July 2015).

The Law on the Prevention and Repression of Illicit Enrichment (in French) forbids illicit enrichment but fails to adequately define the offense and contains a number of loopholes, such as the exclusion of parliamentarians from the obligation to report their assets and from the possibility of being prosecuted (IMF, Jul. 2015). Mali is not a party to the OECD Convention on Combating Bribery but has ratified the United Nations Convention against Corruption.

Civil Society

Civil society in Mali is heterogeneous and active in various regions (HRR 2014). Although freedom of speech is guaranteed by law, it has been restricted in recent years (FitW 2015). Recent domestic conflicts led to media self-censorship and economic difficulties, limiting news coverage (FotP 2015). The situation in the capital and in the south is normalizing again, but serious challenges to freedom of information and expression remain in the north (FitW 2015). With the financial help of various donor countries, Mali’s civil society network is rapidly expanding (BTI 2016). At under 3 percent, internet penetration is one of the lowest in West Africa (FitW 2015).

Sources

The site provides a wealth of practical anti-corruption resources to support a solid preventative approach, covering subject such as processes, due diligence, practical tools to support compliance program implementation and also compliance and integrity training.

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