Your Questions: Answered - Written by on Sunday, April 15, 2012 7:04 - 1 Comment

Your questions answered: Jo Morgan CCO at IMI looks at a grease payment dilemma

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Dear Jo,

I recently had an issue with shipping goods to Asia. Materials were needed in a rush for a meeting the following week and I received a call from my local agent to say that they were stuck in customs. I asked what the problem was and he told me that they could be released if a payment was made to an official as they made up their salary by charging westerners to get their goods through customs.

I told the agent that not to make the payment. Later the same day he phoned to tell me it was all sorted out – I was busy and did not ask how.

However, on a recent visit over lunch I asked him how he’d sorted out the problem and smiling he told me he’d made the payment. He’s a good agent for us but I feel uncomfortable about this. What would you do in my shoes?

Jo’s answer:

This is a difficult situation. However the legislation in the UK is clear. Presuming that this is an unpublished unreceiptable payment and therefore a facilitation (or grease) payment then it is prohibited under the Bribery Act, and I do not think that this payment is in any way justifiable (such as a payment to protect personal health and safety might be).

Therefore I think you have to be clear in your response. I know there are often many commercial considerations which might make this a difficult course of action, but frankly I would want to terminate the agent. You had been clear in the instruction you had given and he still went ahead and made the payment anyway which shows that they cannot be trusted. If you did not terminate and you had a subsequent issue which was more serious, and perhaps involved disclosure to a law enforcement agency, it is likely that this issue would also come out and you would be deemed to have been on notice that this agent was not an appropriate person to be doing business with, which may aggravate any punishment you might receive. It certainly won’t help!

One of the things we have done at IMI plc is to develop a card in many different languages which explains our stance on facilitation payments i.e. that we do not pay them and that we take compliance seriously and would report a facilitation payment to relevant law enforcement agencies. This can be used with those requesting such payments and we have found that this kind of robust refusal with the threat of reporting to law enforcers, generally stops payments being requested. However there will be situations where you genuinely cannot get past the request for a payment, and your company might suffer some significant commercial damage as a result of refusing to pay, for example if you have some time critical components. In those instances I would recommend that you engage with the SFO to see if you could make use of their six step methodology explained in more detail here.


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