SAI INDIA COUNTRY REPORT THE IInd MEETING OF 10 ARP.

SAI INDIACOUNTRY REPORT

THE IInd MEETING OF 10 ARP

CURRENT LEVEL OF CORRUPTION

1 Current characteristic level Serious and pervasive in

most or all sectors2 Level now with past year About same as past years

3 Transparency International-Corruption Perception

Index rank reflect reality

No

4 Global Integrity Index rank reflect reality No

5 Peoples' opposition Weak

6 Governments' opposition Weak7 Corruption dealing Highly predictable and visible from

certain pattern8 Rank as per prevalence 1. Grand – misuse of entrusted

power of politicians and

Petty corruption – everyday at all

levels

2. Enterprise Level9 Main pattern in country Both in public and private entities10 Petty corruption Serious

11 Main petty corruption Medium management/Supervisors12 Main patterns of petty

corruption

Bribes paid for expediting public services

and to avoid law.13 Grand corruption Serious14 Main grand corruption Elected officials and their personal

favorites15 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 Greatest probability of

occurrence in Govt. activity

Procurement of contracts; Revenue (Taxes) collection; Licensing

and franchising

18 Use of money/asset gained

from corruption

Acquiring assets; Invest in real estate; Leisure/social activities

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

including lack of timely

financial management favor

corruption

Agree

22 As an enforcement agency,

priority of monitoring

corruption

Not a priority

23 As an enforcement agency,

priority of public complaints

on corruption

High priority

24 As an enforcement agency

emphasis on whistle blower

in corruption reporting

Very important

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 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).

Agree

30 “Unchecked and excessive executive discretion in

the 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

Martinez-Vazquez, Arze, and Boex 2004)

Strongly agree

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. Situation in the country Serious2. Tends to increase in recent

years 

3 Is more sophisticated over the years

Strongly agree

4 Pattern in the country Corruptive practices through money laundering mostly observed in private sectors

5 Highest risk ranking Real Estate ; Finance, Banking;6 Common methods 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 SituationMethods Experience level Non experience level

Use of Corporate vehicles and Trusts

Often  

Use of Gatekeepers Often  Use of Domestic Financial Institution

Sometimes  

Use of Offshore/Foreign jurisdiction

Often  

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

11. Consequences

*

- Increased crime and corruption

- Weakened financial institutions

- Reduced government tax and revenue and weakened government control over the economy

12. Economic and social consequences

Serious

13. Impact on national security, international reputation and economy

Very serious

14. Significant incidences between 2007 – 2012

Allocation of Coal Blocks;

Payment of Indian Officials by ORACLE (FCPA)

Payments to Indian Officals by DIEGO (FCPA)