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Facilitating Payments: Are countries really serious about banning them?

So there are countries around the world that have “gone beyond” the FCPA and prohibited facilitating payments. Good for them. And the United States “lags behind” because it still does not prohibit such payments. Should U.S. law enforcement be concerned because others have taken an important initiative?  

Let’s first consider a question. Of all these countries that now have laws that prohibit facilitating payments, what is the record on enforcing these provisions — what enforcement cases there have been? Was this a meaningful exercise that has led to actual cases, or was it more form than substance?

There have long been skeptics, including me. Of course, I agree that even small bribes are wrong, and companies should not permit their employees to make them. But I have felt that some countries were only willing to enact broad prohibitions against everything, because they really intended to enforce nothing.  I believe in strong enforcement, not merely gestures.

But were the skeptics wrong? Has there, in fact, been rigorous enforcement of these prohibitions? Or was any enforcement agency really going to expend scare resources against $10 payments to office clerks, when those same resources were needed to address major contract briberies involving corporate executives and government ministers?  

If anyone is aware of such cases, can you post here so we can learn what has been done to provide meaning to these laws?   

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Joe Murphy, pictured above, is a Certified Compliance and Ethics Professional and author of 501 Ideas for Your Compliance and Ethics Program: Lessons from 30 Years of Practice (SCCE; 2008) and A Compliance & Ethics Program on a Dollar a Day. He has worked in the compliance field for over 40 years. He can be contacted here.

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3 Comments

  1. The question raised by Joe Murphy is really challenging for everyone in the field of compliance and ethics. It is not possible to give a reasonable answer without taking into account the different contexts and the approaches. However, there is one thing everyone might be in agreement – facilitating payments are unethical practices. It does not matter the amount involved and the people involved. It is also true that the human behavior cannot be standardized by enacting more laws and rules. The world institutions should preferably be concerned with putting in place mechanisms to foster and internalize universal ethical values within themselves and in the entire business chain. A world facing resource shortages should allocate the available resources to build up a value-based culture. Unfortunately, enacting more laws & rules and spending money and time to enforce them to control, even to limit, human conduct, so to speak, degenerate the overall concepts of human dignity and responsible freedom of thought and expression.

    Personally, I would say we should no longer support the symbolic gestures of ethical intentions. Those engaged in these gestures should be aware that there are more eyes attentive to these deceiving practices.

  2. I agree with Mr. Murphy that the rules against facilitation payments are generally observed more in breach than compliance. This is particularly so in countries with low ethical values and where institutions are still weak and where these payments are often perceived as normal and necessary in business processes. Perhaps, strategies on how to generally improve the ethical values of citizens and institutions might be more helpful than laws and regulations which very few persons if any, pay attention to. Truth must be told that companies that insist on not paying facilitation payments are still loosing businesses to rival companies that find ways and means of paying them. So long as there is no level playing field in this matter, the rules against facilitating payments will remain largely esoteric and symbolic.


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