Snapshot of the Venezuela Country Profile

Corruption is a significant problem in Venezuela and a systemic culture of corruption exists at most levels of society. Since his ascent to power, Chávez has openly declared a zero tolerance policy towards corruption, which has been demonstrated by several public initiatives. Venezuela has a huge investment and economic growth potential and its natural resource wealth has made it attractive to foreign investors. Nevertheless, political and regulatory uncertainty has seriously discouraged foreign investment in the country. Several factors, such as political instability, heavy bureaucracy and corruption, inhibit the business climate.

Positive developments in relation to corruption and investment:

• Both the executive and legislative branches have shown great interest in fighting corruption through public institutions, which is demonstrated by the creation of a comprehensive legislative framework and several agencies being mandated to deal with cases of corruption.
• Venezuela has a well-developed set of regulations governing public procurement, including a government-wide system for registering contractors, setting up new procedures for acquiring goods and services and selecting contractors.
• E-governance is relatively well-developed in Venezuela and practically all public ministries have web pages providing information on their work.

Risks of corruption:

• It is common for public officials to demand bribes in exchange for approving public utility supply contracts. The process of obtaining licences is also often expedited by facilitation payments and gifts to licensing authorities.

• Companies in strategic sectors face risk of expropriation and in some situations the government has shown little interest in paying reasonable compensation.
• Venezuela's seas and airports are notorious for their high levels of red tape and corrupt practices. Corruption within the customs service is one of the greatest barriers to trade in Venezuela.
• Companies should note that it is common among public procurement officials to demand commissions in exchange for awarding contracts.

http://www.business-anti-corruption.com/country-profiles/latin-america-the-caribbean/venezuela/snapshot/