Facilitation payments - Written by on Saturday, December 18, 2010 7:26 - 0 Comments

Facilitation Payments: SFO help to stop the demands

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We have written before about facilitation payments under the Bribery Act: they are illegal and always have been.

The SFO stance on facilitation payments

The Serious Fraud Office stance can be summarised as zero tolerance.  The SFO require organisations to impose a blanket ban on them and to work on stamping them out as a top priority.

The horns of a dilemma

A zero tolerance approach to bribery is hard to argue from a moral standpoint and impossible to argue from a legal standpoint.  They are illegal.  We certainly do not recommend that organisations make them.

However, this gives rise to significant practical difficulties.   In many parts of the world the making of such payments is simply a way of life.

This article on the BBC website “The dilemma of bribes: to pay or not to pay” shines a spotlight on the issue and highlights some interesting and controversial viewpoints.

Faced with a dilemma what should companies do?

A practical solution from the SFO

In a recent speech International Corruption Hunters Alliance Meeting hosted by The World Bank in Washington Richard Alderman outlined a practical and sensible approach.

In the speech he noted that the focus of discussions in the UK has moved from persuading companies that it is wrong to give bribes to how it is possible to stop the demands for bribes in the first place.

Sharing the burden of responsibility

He stressed the responsibility that regulators and countries have to help ethical companies  “this is not something that can be solved on an individual national basis. Nor is it something that can be solved just by one company (however large) acting alone. What is needed here is international involvement between countries and including institutions such as the World Bank and others. It can also mean companies working together to share their experiences of working in other countries and bringing those experiences to us.”

Talk to the SFO?

He went on to give an example of discussions with a lawyer acting on behalf of a group of companies: “[these companies] were suffering from the problem of facilitation payments at the border with a particular country. These companies were very good ethical companies and they had tried all that they could in order to be able to address the problem and to avoid making these payments.  This had been unsuccessful and so they approached us.

What we were able to do was to suggest further ways of engaging on this issue through international action and through addressing the issue at the appropriate level in the other jurisdiction. We found that this was successful and the level of demand for these payments reduced quite considerably. Of course, we shall need to look to see whether or not the demands increase again at some time in the future. Clearly we need to follow this up from time to time.” [our emphasis]

The SFO, more than just a prosecutor

Speaking about the help the SFO can provide organisations he went on to say“I have said consistently that it is not the role of the SFO to stand in the way of corporates wanting to do ethical business in very challenging circumstances but I recognise that the corporates should be able to look to us and to our colleagues in other jurisdictions for help in solving these problems……”

We have said before the SFO’s engagement strategy with corporates is to be applauded.  As we have said previously the Director of the SFO is on the record saying that he is not only interested in concentrating on investigations and prosecutions but also, importantly, on prevention.

Do you need help stopping the demands for facilitation payments?

If your business would like to consider adopting a similar approach to the example given and request the assistance of the SFO in the context of demands for facilitation payments being made please contact us.  We are happy to discuss the issue with you and, if appropriate, make contact with our contacts at the SFO on your behalf.  This can be done on a no names basis in the first instance.

Image © Crown Copyright 2010

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