 | The examples and perspective in this article may not represent a worldwide view of the subject.(October 2007) |
A facilitating payment, facilitation payment, [1] or grease payment [2] is a payment to government employees to speed up an administrative process whose outcome is already determined. [3] Although ethically questionable, it is not considered to be bribery according to the legislation of some states as well as in international anti-bribery conventions.
For legal purposes, it is distinguished from bribery, although the distinction is often blurred. [4] Determining whether a payment is a facilitating one may be difficult and depend on the circumstances. The value of the payment is not immediately relevant, however the greater the value, the higher are chances that it will be a red flag for law enforcement. Small unofficial payments are customary and even legal in some countries, nevertheless they may present a risk of liability according to the laws of the host country. There also exists a slippery slope danger of evolving into dubious payments. [5]
While being legal, facilitating payments are still considered to be questionable from the point of view of business ethics. [6] [7] The following arguments have been made:
Many companies therefore restrict or severely limit making facilitating payments in their policies, however this practice is not yet widespread. For example, as of 2006 [update] , in Australia, among the S&P ASX 100 only 24 companies control facilitating payments and only 15 are reported to prohibit them. [3]
As of 2006 [update] , the Australian law has discrepancies as to the definition of the facilitating payment.
The Criminal Code defines a facilitating payment to be a payment which is [3]
The Income Tax Assessment Act as amended in 1999 permit companies claim facilitation payments as deductions (before 1999 bribes were also valid deductions), but its definition does not refer to the size of the payment. [3]
Many Australian states override the federal legislation and define facilitating payments as illegal. [3]
As of 2010 [update] , subsequent to the Bribery Act 2010, the United Kingdom does not recognize the legality of facilitating payments. The OECD notes that the UK is unlikely to prosecute for minor facilitating payments in the areas where it is a common practice.[ citation needed ] The Ministry of Justice guidance confirms that prosecutors will exercise discretion in determining whether to prosecute.[ citation needed ] In addition, informal guidance received from the Serious Fraud Office indicate that where it is considering action, it will be guided by the following six principles:[ citation needed ]
Within the United States federal legislation, a facilitating payment or grease payment, as defined by the Foreign Corrupt Practices Act (FCPA) of 1977 and clarified in its 1988 amendments, is a payment to a foreign official, political party or party official for "routine governmental action", such as processing papers, issuing permits, and other actions of an official, in order to expedite performance of duties of non-discretionary nature, i.e., which they are already bound to perform. The payment is not intended to influence the outcome of the official's action, only its timing. [5] Facilitation payments are one of the few exceptions from anti-bribery prohibitions of the law.[ clarification needed ]
Prior to the 1988 amendments, the exclusion of "grease payments" was via the definition of the "foreign official", which did not include persons without discretionary (decision-making) duties, e.g., ones with clerical functions. The major drawback of this approach is that often it is difficult to properly identify the scope of duties of a foreign official. The 1988 amendment eliminated this drawback by placing the emphasis on the purpose of the payment rather than on the duties of the recipient. At the same time, the scope of the "routine governmental actions" in question was made sufficiently narrow and supplied with detailed examples. [9]
Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain.
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Due diligence is the investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party or an act with a certain standard of care.
The Foreign Corrupt Practices Act of 1977 (FCPA) is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests.
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Foreign official or foreign public official refers to a person who acts in an official capacity for a foreign government. The term is chiefly used in connection with international conventions and national laws against corruption in international trade.
The Bribery Act 2010 (c.23) is an Act of the Parliament of the United Kingdom that covers the criminal law relating to bribery. Introduced to Parliament in the Queen's Speech in 2009 after several decades of reports and draft bills, the Act received the Royal Assent on 8 April 2010 following cross-party support. Initially scheduled to enter into force in April 2010, this was changed to 1 July 2011. The Act repeals all previous statutory and common law provisions in relation to bribery, instead replacing them with the crimes of bribery, being bribed, the bribery of foreign public officials, and the failure of a commercial organisation to prevent bribery on its behalf.
Integrity management consulting is an emerging sector of consultancy that advises individuals and corporations on how to apply the highest ethical standards to every aspect of their business. Integrity within a corporate set-up is a holistic approach that makes prudent and ethical decisions in finance and other areas, including operations, marketing, human resources and manufacturing. At the core of integrity management is the belief that companies have a strong interest and responsibility to act with integrity at all times.
The Corruption of Foreign Public Officials Act is an anti-corruption law in force in Canada. It was passed in 1999, ratifying the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and is often referred to as the Canadian equivalent to the United States' Foreign Corrupt Practices Act (FCPA).
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Commercial bribery is a form of bribery which involves corrupt dealing with the agents or employees of potential buyers to secure an advantage over business competitors. It is a form of corruption which does not necessarily involve government personnel or facilities.
Corruption in Ecuador is a serious problem. In 2014, the U.S. Department of State cited Ecuador's corruption as a key human-rights problem. According to Freedom House, "Ecuador has long been racked by corruption", and the weak judicial oversight and investigative resources perpetuate a culture of impunity.
Anti-corruption comprises activities that oppose or inhibit corruption. Just as corruption takes many forms, anti-corruption efforts vary in scope and in strategy. A general distinction between preventive and reactive measures is sometimes drawn. In such framework, investigative authorities and their attempts to unveil corrupt practices would be considered reactive, while education on the negative impact of corruption, or firm-internal compliance programs are classified as the former.
Maritime anti-corruption initiatives have emerged in the last decades as a response to the growing threat of transnational corruption in the maritime domain, specifically in the shipping industry which is responsible for around 90% of world trade. In the past, paying bribes at ports to pass through customs was perceived as normal behavior, but such activities resulting in higher operational costs lead to increasingly stricter national and international anti-corruption regulations being put in place.
The Foreign Extortion Prevention Act (FEPA) is a United States federal law that enables US authorities to prosecute foreign officials who demand or accept bribes from a US citizen, US company, or within a US jurisdiction. FEPA was signed into law by Joe Biden on December 22, 2023, as part of the National Defense Authorization Act for Fiscal Year 2024.
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