Mauritania Corruption Report (business-anti-corruption.com)

Snapshot

Corruption is an obstacle to business in Mauritania. All sectors of the economy suffer from pervasive corruption. Licenses and permits are often obtained through bribery or clientelistic networks, and the same applies for obtaining public contracts, particularly in the country’s extractive industries. The political landscape is dominated by deeply entrenched patronage networks with stakes in the economy, so practices of favoritism are common. Mauritania’s investment climate is further hampered by administrative barriers and an inefficient legal system. Corruption offenses are criminalized under the country’s Penal Code (in French) and encompass both the public and the private sectors. However, laws are poorly enforced, and government officials engage in corruption with impunity. Unofficial payments and gifts are widespread practices in Mauritania.

 

Judicial System

The judiciary carries a very high risk of corruption. Almost half of companies identify the courts as a constraint to business (ES 2014). Furthermore, businesses perceive the courts to lack independence and claim that bribes are frequently exchanged to obtain favorable courts decisions (GCR 2015-2016). Corruption cases are rarely prosecuted due to high levels of corruption within the courts (HRR 2014). The judiciary is inefficient in settling disputes and challenging government regulations (GCR 2015-2016).

Mauritania is a member of the International Centre for Settlement of Investment Disputes (ICSID) and has accessed the New York Convention 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Police

Businesses face high corruption risks when dealing with the police. Bribery demands are frequent, particularly at night-time roadblocks in the capital or at checkpoints between cities (HRR 2014). The Mauritania police is not very reliable in protecting companies from crime or in enforcing law and order (GCR 2015-2016). The vast majority of companies in Mauritania pay for private security services (ES 2014). Impunity among police officers is a serious problem, and authorities rarely investigate or prosecute reports of police corruption (HRR 2014).

Public Services

Mauritania’s public services sector is a high-risk sector. Bribes are frequently demanded when obtaining permits and licenses (GCR 2015-2016); almost a third businesses expect to give gifts to “get things done” (ES 2014). Current licensing regulations force licenses to be bought or acquired through patronage networks, so companies tend to operate informally (BTI 2016). The informal sector dominates the Mauritanian economy, hampering competition (BTI 2016). Incidentally, another factor that limits competition is the large number of monopolies and cartels controlled by a small number of businessmen and their families (who usually also enjoy close relationships with the President) (BTI 2016).

Inefficient government bureaucracy is also an obstacle for companies; regulations governing permits and licenses are complex and overlap (GCR 2015-2016, ICS 2015). Access to basic administrative services varies from one region to another; it is most present in Nouakchott (the capital) but less so in peripheral regions (BTI 2016). Where administrative services are available, employees’ lack of training is apparent (BTI 2016)

On a more positive note, starting a business has been eased in recent years, and the cost and time required to start a business are much lower than regional averages (DB 2016).

Land Administration

Businesses contend with moderate to high corruption risks when interacting with land authorities. More than one-quarter of surveyed companies expect to give gifts to officials in return for a construction permit (ES 2014). Favoritism plagues the land administration (HRR 2014). Even though property rights are guaranteed under the constitution, private property rights are an uncertain issue because Mauritanians often live on partly or non-registered urban land (BTI 2016). Registering property is on average less time-consuming and less costly than in neighboring countries (DB 2016).

Tax Administration

The tax administration carries a high risk of corruption. Irregular payments (e.g., facilitation payments) are frequently demanded in relation to tax payments (GCR 2015-2016). Businesses complain that paying taxes is time-consuming and lacks transparency; paying taxes is more than twice as time-consuming than the regional average, taking 734 hours per year (ICS 2015; DB 2016).

Evidence suggests that government officials abuse their power to obtain unauthorized exemptions from taxes, and audits are sometimes used as political tools to crack down on rivals (HRR 2014; BTI 2016). In one instance, audits were launched against three of the country’s largest companies owned by Ould Bouamatou; the tax agency claimed he owed EUR 10 million in unpaid taxes (BTI 2016).

Customs Administration

The border administration lacks transparency and presents businesses with significant corruption risks. Bribes and irregular payments are frequently exchanged when trading across borders, especially when importing (GETR 2014). Patronage and favoritism are also problems in the import and export business in Mauritania: Companies with close ties to the ruling elite dominate import markets (BTI 2016). Furthermore, the smuggling of counterfeit goods often involves complex networks that include public officials (BTI 2016).

Companies perceive customs procedures to be burdensome (GCR 2015-2016), and over one-third identify trade regulations as a major constraint to business (ES 2014). Trading across Mauritania’s borders is generally less time-consuming but more costly than elsewhere in the region (DB 2016).

Public Procurement

Public procurement is a high-risk sector. Almost 40% of surveyed companies expect to give officials gifts to secure a government contract (ES 2014). Firms believe that funds are often diverted to companies or individuals due to corruption and that favoritism often taints the decisions of procurement officials (GCR 2015-2016). Large firms with political connections dominate public procurement contracts (BTI 2016). When offers made by national and foreign companies are equal, Mauritanian companies are usually favored. However, this practice has heightened the levels of favoritism as tenders are awarded to companies with strong ties to government officials and tribal leaders (ICS 2015).

In one case, the secretary general of the Interior Ministry, Mohamed El Hadi Macina, has been arrested for alleged corruption between 2006 and 2014. The secretary general was allegedly involved with the British company Smith and Ouzman while working on election ballots. The UK Serious Fraud Office confirmed that two employees and the company have been convicted of bribing public officials for business contracts in Kenya and Mauritania USD 543,000 (The New Herald, Feb. 2016). El Hadi Macina is awaiting trial.

The diversion of public funds due to official impunity is widespread (HRR 2014). Embezzlement is particularly common in connection with public infrastructure projects and state-owned enterprises (BTI 2016). In mid-2014, two senior officials within the state Food Security Commission were ordered to repay USD 52,460 after being found guilty of embezzling funds provided by the World Bank (HRR 2014).

Natural Resources

Mauritania’s natural resources sector carries a high risk of corruption, particularly clientelism and patronage. The country’s mining sector and its fishing trade are its most vulnerable industries (HRR 2014). Favoritism and clientelism pervade the mining sector: It is common for relatives and associates of local politicians to be awarded contracts and licenses (Risk Advisory, May 2013). Furthermore, senior positions within the country’s mining organizations are allocated to members of the President’s own tribe, Awalâd Busba’a (BTI 2016).

US authorities are investigating Kinross Gold Corporation for alleged corruption in Mauritania, among other countries. Reportedly, Kinross awarded the Mauritanian firm Maurilog, in partnership with French company Schenker a transport and logistics contract for mining operations worth USD 50 million. Leaked documents show that Kinross awarded the contract based on the “political advantage” of the Mauritanian company, which was owned by a former top government official and close associate of the president. Kinross is also being investigated for bribing government officials in Mauritania; it ended its three-year contract with Schenker/Maurilog after just one year (The Globe and Mail, Mar. 2016).

Mauritania was accepted as a compliant country of the Extractive Industry Transparency Intiative (EITI) in 2013.

Legislation

The government of Mauritania has a legal anti-corruption framework in place, but enforcement is poor (HRR 2014). The Penal Code (in French) criminalizes abuse of power; influence peddling; passive and active bribery; and the promise, demand or offer of any gift or benefit. The provisions encompass offenses both in the public and the private sectors. Bribery is punished with two to ten years’ imprisonment and a fine double the amount of the bribe but no less than MRO 20,000 (USD 64,000). Authorities did not enforce anti-corruption laws effectively (HRR 2014). Public officials are subject to financial disclosure laws; senior government officials have to declare their assets as well as those of their spouses and children (HRR 2014). However, 2013 was the latest year such a procedure was undertaken, and declarations were not made available to the public (BTI 2016). Appointments among the country’s anti-corruption agencies are mostly based on political affiliation, further hampering the effectiveness of the institutional set-up to curb corruption (GI 2016). Mauritania has ratified the UN Convention against Corruption.

Civil Society

Freedoms of speech and press are provided for by the Mauritanian Constitution, but these freedoms are not protected in practice. Journalists and citizens face harassment for expressing opinions publicly, particularly when these involve corruption or high-ranking officials (BTI 2016). In one instance, Hanevy Ould Dehah, a well-known journalist in Mauritania, was the victim of an arrest in 2009 and attacks by three men (who were later revealed to be the nephews of the President) in 2015 for having published an article on corruption committed by close relatives of the President. The journalist’s brother was fired from his job at the Port of Nouakchott in connection with the case (BTI 2016). The law provides for public access to government information and authorities generally grant citizens access (HRR 2014). The media environment in Mauritania is considered “partly free” (FotP 2015).

Very few NGOs are active in Mauritania; the few active NGOs primarily address social matters such as slavery and women’s rights (BTI 2016). Civil society organizations are not included in the political decision-making process (BTI 2016).

Sources

• World Bank & IFC: Doing Business 2016.
• Bertelsmann Foundation: Transformation Index – Mauritania 2016.
• Global Integrity: African Integrity Indicators – Mauritania 2016.
• World Economic Forum: Global Competitiveness Report 2015-2016.
• The Globe and Mail: “Mauritanian firm target of Kinross probe, document says”, 13 March 2016.
• The News Herald: “Mauritania arrests Interior Ministry official for corruption”, 12 February 2016.
• US Department of State: Investment Climate Statement – Mauritania 2015.
• World Economic Forum: Global Enabling Trade Report 2014.
• US Department of State: Human Rights Practices Report – Mauritania 2014.
• World Bank Group: Enterprise Surveys – Mauritania 2014.
• Risk Advisory: “Confronting Corruption in Mauritania’s mining industry,” 15 May 2013.