Belarus

Belarus Corruption Report

Snapshot

Belarus_250x122.jpgCorruption is present at all government levels in Belarus; industry, education, healthcare and construction are particularly vulnerable sectors, and a rigid hierarchical system of government makes it difficult to effectively address the issue. The Criminal Code of the Republic of Belarus criminalises attempted corruption, extortionactive and passive bribery, bribery of foreign officials and money laundering, but anti-corruption regulations are vague and require improvement. In addition, anti-corruption laws have been poorly enforced in Belarus, and officials engage in corruption with impunity. Companies are likely to face discrimination and corruption in public procurement in favour of state-owned enterprises, and making informal payments or giving gifts to secure government contracts are common practices when doing business in the country. The legal status of facilitation payments is uncertain.

Last updated: July 2015
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Judicial System

Corruption and political interference are key problems affecting Belarus's judiciary (HRR 2013), but very few businesses identify the courts system as a major constraint for doing business (ES 2013). Bribery within the judiciary can affect the outcome of deicisons; the deputy chairman of the Mogilev district court accepted a USD 2,700 bribe from an attorney to influence the outcome of district court decisions (Belteleradiocompany, 2013). Later, both parties were indicted for active and passive bribery respectively. Belarus has signed the New York Convention of 1958 and is party to the International Centre for the Settlement of Investment Disputes (ICSID).

Police

The police force in Belarus suffers from widespread corruption. Only about 10% of all corruption-related crimes detected within security apparatus in 2012 were investigated by the Military Prosecutor's Office and filed in court (HRR 2013). Impunity among police officials is a problem in Belarus, and the government rarely investigates abuse within the sector (HRR 2013). Politically motivated police-corruption sweeps against businesses are sometimes conducted by Belarusian police (NiT 2014). There is a large number of criminal charges against high-level government officials and business executives as a result of the government's corruption sweeps. Recently, as part of its anti-corruption agenda, the government has managed to successfully provide anti-corruption training to its law enforcement officials (GRECO, May 2015).

Public Services

The public administration in Belarus is opaque, and corruption may occur in the sector. Bureaucrats enjoy vast discretionary powers, thus increasing the risks of encountering extortion when dealing with administrative requirements (NiT 2014). One-third of businesses report that unequal economic conditions, including those imposed on obtaining permits and licences, have fuelled corruption (IPM, 2012). Companies report demands for bribes and gifts when applying for electricity connections, operating licences, construction permits and 'getting things done' (ES 2013). Corruption is frequent in the education, healthcare and construction sectors (HRR 2013). Petty corruption within Belarus's administration is better managed than high-level corruption is (GRECO, Feb. 2014).

The president of Belarus initiated reforms to ease the bureaucratic burden of administrative requirements, including reducing the number of bureaucrats and raising the salaries of the remaining employees, as a part of his campaign for the 2015 presidential election, but the results of the reforms remain to be seen (Belarus Digest, Aug. 2014). Also recently, Belarus made starting a business easier by eliminating the minimum capital required (DB 2015). Obtaining a construction permit in Belarus now requires less time and fewer costs compared to the regional average (DB 2015). 

Land Administration

Businesses may encounter corruption when interacting with Belarus's land administration, and the country's highest corruption rates were registered in the construction sector, among others (HRR 2013). Almost one-fifth of companies expect to give gifts to obtain a construction permit (ES 2013). Nevertheless, corruption has decreased in the construction sector since 2010, albeit mainly because of the decrease in the number state-financed projects following the financial crisis (IPM, 2012). Corruption has tainted the 'Minsk-City' project – the largest building project in Belarus. The business-centre project is reported to have been corrupted throughout the entire process: design, permits and licences, and construction (ej, Apr. 2013).

Tax Administration

Belarus's tax administration functions well, despite a few instances of corruption. Few companies consider tax administration a major constraint to business, but some report being expected to give gifts to tax officials (ES 2013). Nonetheless, the tax administration in Belarus performs better than in other regional countries. Belarus has eased the process of paying taxes by introducing an electronic filing and paying system and by simplifying the requirements for corporate income tax and VAT (DB 2015).  

Customs Administration

The customs administration in Belarus is perceived to be over-regulated, leading to increased opportunities for extorting bribes from companies importing or exporting goods (NiT 2014). Almost one-fifth of surveyed executives of private companies report that they were forced to pay a bribe upon meeting with customs officials (IPM, 2012). However, another survey found that no businesses report being expected to give gifts to acquire an import licence (ES 2013).

Public Procurement

The public procurement sector in Belarus suffers from corruption. The main risks arise from the complicated and inconsistent system of legislative regulations governing procurement (Krivorotko, 2014). Among the risks is the legislatively recognised 'single source procurement' (procurement from only one supplier), and information on the procedure involved is not made public (Krivorotko, 2014). Another concern is the exploitation of the legal concept of 'secret trade' to escape transparent procurement procedures, resulting in a non-transparent selection of the winning bidder (Krivorotko, 2014). Nevertheless, the development of e-procurement has increased levels of transparency in the sector (Krivorotko, 2014). E-procurement has predominantly taken the form of e-auctions, which require information to be public, the effective and optimal expenditure of budgetary funds, and full anonymity of bidders (Krivorotko, 2014). 

Foreign companies are likely to face discrimination in favour of state-owned enterprises in Belarus's public procurement process. Typical corruption scenarios involve offering or accepting bribes, embezzlement and trading in influence (HRR 2013). Many companies expect to offer gifts to secure government contracts in Belarus (ES 2013). Covert procurement fraud schemes are believed frequent in oil refining and in the arms trade (BTI 2014).

Legislation

Belarus's anti-corruption legislation is not properly enforced (GRECO, Feb. 2014). The Criminal Code of the Republic of Belarus criminalises attempted corruption, extortionactive and passive bribery, bribery of foreign officials and money laundering. The Law on Fighting Corruption and the Law on Measures to Prevent Legalisation of Income acquired in an illegal way are also a part of the anti-corruption legal framework. There are few anti-money laundering investigations, and legislation is considered weak (ENaPI – Belarus 2012). Likewise, the Anti-corruption law and the Public Service Lawgoverning gifts to public officials are reportedly unclear and contradicting (GRECO, Feb. 2014). Elected officials are required to disclose their assets as well as those of their spouses and children under Belarusian anti-corruption laws, but there are exceptions for candidates running for presidential, parliamentary or municipal elections (HRR 2013). Asset declarations are not public. Anti-corruption regulation in Belarus is under-developed, and the distinction between a disciplinary or administrative offence and a crime is vague (CIS LCN, 2011). Officials at all levels reportedly engaged in corruption with impunity (HRR 2013). Belarusian law does not provide for effective legal guarantees for public access to government information (FotP 2015). Belarus is a party to a number of international conventions, such as the Council of Europe Civil Law Convention on Corruption, the Criminal Law Convention on Corruption, the United Nations Convention against Transnational Organised Crime and the United Nations Convention against Corruption (UNCAC) but is not a party to the OECD Anti-Bribery ConventionAccess the Lexadin World Law Guide for a collection of legislation in Belarus.

Civil Society

While freedoms of speech and of the press are guaranteed by Belarus's Constitution, criticism of the president and the government is a criminal offence (FotP 2015). A Belarusian media law includes penalties if the media 'threatens the interests of the state' or 'discredits the Republic of Belarus'. The Information Ministry monitors the media, which is subject to opaque and politicised licensing and registration regulations (FotP 2015). Media restrictions remained high during 2014, and several journalists faced harassment and intimidation (FotP 2015). The government shapes and influences online public debate (BTI 2014), imposes restrictions on internet freedoms (FotP 2015). The media environment in Belarus is considered 'not free' (FotP 2015). 

Freedoms of association and of assembly are provided by the Constitution, but the government restricts these rights in practice (HRR 2013). Independent associations deemed to be critical of the government are often restricted through selectively enforced laws (HRR 2013). The government significantly limits the civil and political rights of NGOs (BTI 2014). The government has criminalised participation in unregistered NGOs (FitW 2015). The government in 2014 eased the registration requirements placed on NGOs, yet these were arbitrarily enforced (FitW 2015). 

Sources

Topics: Europe & Central Asia