Doing business in some parts of the world can be risky. In addition to weak protection of property rights and confusing and contradictory laws, pervasive corruption often discourages businesspeople from entering a new market or makes their experience quite unpleasant. Too frequently, companies are faced with demands for facilitation payments in order to get things done – like get their goods through customs, obtain a business license, and pass safety inspections.
Facilitation payments might seem like the poor cousin of bribery – somehow less of an offense – and companies often feel like they have no choice but to pay. However, transition payments are bribes – illegal and bad for business!
In their recent article, “Small Bribes Buy Big Problems,” Alexandra Wrage, president of TRACE, and Matthew Vega, in-house counsel for Federal Express, discuss the damaging effects of facilitation payments and what companies can do to protect themselves from this form of extortion.
If you’re a businessperson who has been faced with demands for facilitation payments, you now have a method of recourse: BRIBEline. BRIBEline is a new web-based tool from TRACE that can be used to safely and anonymously report bribe demands. Reporting requests for bribes through BRIBEline won’t lead to prosecution of the offenders, but it will raise awareness about the levels of bribery in different countries, which will influence.
We’d like to hear your opinions on the article and how it relates to what your company is doing to deal with the problem of bribe seeking, so please take a look and come back to comment.
Article at a Glance:
- Facilitation payments—like all bribes—are illegal and damage companies’ reputations.
- Companies can protect themselves from extortion by:
– Adopting a clear policy on bribery and enforcing it
– Training employees and associates
– Instituting an internal reporting program
- Combating bribery will lead to a more stable business environment.
Published Date: September 21, 2007