Ecuador’s Business Environment: Understanding the Risks and Challenges

Corruption Risks in Ecuador

Ecuador is a country where corruption is a significant concern, particularly in the public procurement sector. Companies operating in this sector face a high risk of corruption due to widespread bribery and embezzlement among procurement officials.

Corruption risks are highest in the public procurement sector: This is due to the lack of transparency and the prevalence of bribery and embezzlement.
Natural resources sector also poses corruption risks: The natural resources sector carries a moderate to high corruption risk due to the lack of transparency and national oil companies being given priority over foreign companies.

Ecuador’s Anti-Corruption Legislation

Ecuador has an anti-corruption legal framework in place, which includes laws against bribery, extortion, abuse of office, and embezzlement. However, enforcement of these laws is poor, with only a small percentage of respondents believing that anti-corruption laws are effective.

Criminal Code covers key offenses: The Criminal Code covers offenses such as bribery, extortion, abuse of office, and embezzlement.
Money laundering regulations in place: Money laundering is regulated by the Law for the Control of Money Laundering.

Civil Society and Press Freedom

Ecuador guarantees freedoms of press and speech under its law, but these freedoms are severely restricted in practice. The government has openly discredited and attacked private media as well as individual journalists.

Press freedom severely restricted: Freedoms of press and speech are guaranteed under Ecuadorian law but severely restricted in practice.
Defamation laws used against journalists: Defamation and libel are criminalized in Ecuador, with several journalists facing criminal and civil defamation cases.

Sources

This information is based on various sources, including:

World Bank: Doing Business 2016
World Economic Forum: Global Competitiveness Report 2015-2016
US Department of State: Investment Climate Statement – Ecuador 2015
Freedom House: Freedom in the World – Ecuador 2015
Global Security: ‘Ecuador - Corruption’, 27 June 2015
US Department of State: Human Rights Practices Report – Ecuador 2014
World Economic Forum: The Global Enabling Trade Report 2014
Bertelsmann Foundation: Transformation Index - Ecuador 2014
Miller Chevalier: Latin America Corruption Survey, June 2012
Freedom House: Countries at the Crossroads - Ecuador 2011
World Bank Group: Enterprise Surveys - Ecuador 2010
Natural Resource Governance Institute: Ecuador Country Profile