They’re almost always illegal under local law. And there’s growing international recognition that facilitation payments aren’t easy to distinguish from other bribes.
For those reasons, more and more companies have adopted a no-bribes policy for their global operations, with no exceptions for facilitation payments. That zero-tolerance approach isn’t easy.
But there’s new guidance about how to reduce or eliminate grease payments. It was published Thursday by Transparency International UK, with support from DLA Piper and FTI Consulting.
TI said globally more than 1 in 4 people paid a bribe in a recent 12 month period
“Demands most often occur in overseas markets, where employees may be vulnerable through travelling alone or the company needs to release critical goods from customs,” TI said.
“When a company pays a bribe of any size, it reinforces a culture of graft which is exceptionally damaging to the economies and societies in which they are paid,” according to Robert Barrington, executive director of Transparency International UK.
Barrington said facilitating payments are one of the most difficult corruption problems for companies to eliminate in their operations.
Simon Airey, head of investigations at DLA Piper, said: “There are very few multinational companies that aren’t at risk of extortion or aren’t affected by small bribes and facilitation payments to some extent. Often those payments are concealed from the company by its employees or they are paid covertly by agents and intermediaries.”
“This guidance will help companies to reduce their exposure significantly,” Airey said.
Julian Glass, a managing director at FTI Consulting, said the “widespread demand for these types of payments, combined with the difficulty in detection makes their eradication a real problem. We hope this guidance will help companies to understand good practice in dealing with this difficult issue.”
The new guidance can be downloaded here.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.