Which of the following scenarios best illustrates a "facilitation payment" (often referred to as a "grease payment") that is highly scrutinized and generally prohibited by global anti-corruption standards and many corporate policies?
Select an answer to reveal the explanation.
Short Explanation
Pay close attention, because this one bites people. You're looking at a small cash payment to a low-level customs official to speed up routine cargo clearance, which is a facilitation or grease payment.
Full Explanation
Facilitation payments are small payments made to a low-level government official to expedite or secure the performance of a routine, non-discretionary governmental action, such as processing government papers, stamping a visa, providing police protection, or clearing goods through customs. The scenario that best illustrates this is the small cash payment given to a low-level customs official to expedite the processing of standard cargo clearance, because it is precisely a payment to speed up a routine governmental task. These are often called grease payments or speed money. While the U.S. Foreign Corrupt Practices Act historically contained a narrow exception for these payments, they are illegal under the local laws of almost all countries where they are paid, and they are strictly prohibited under the UK Bribery Act. Consequently, modern corporate compliance programs almost universally prohibit facilitation payments to eliminate legal risk and maintain ethical consistency. The invoice payment made to a private consultant for providing market analysis services under a valid contract is a standard commercial transaction for legitimate services, permissible as long as fees are reasonable and reflect fair market value. The philanthropic donation made directly to a registered non-profit hospital in a foreign jurisdiction is a charitable contribution, which requires vetting to ensure it is not a disguised bribe, but it is not defined as a facilitation payment. The standard monthly payroll disbursement to a foreign national working at a corporate branch office is standard employee compensation, a legitimate business expense and not a bribe or facilitation payment.