Anaya Nolan
Facilitation payments, also known as small bribes, are payments made to officials to obtain or speed up routine services. While these payments are illegal in most countries, they are allowed as an exception in the bribery laws of a few countries, including the USA. In the UK, however, facilitation payments are treated as bribery and are illegal under the Bribery Act 2010. This Act makes no exception for facilitation payments, and it is an offence for a commercial organisation to fail to prevent bribery. The Serious Fraud Office (SFO) is responsible for investigating and prosecuting cases of facilitation payments, and the penalties for involvement can be severe. While it can be challenging for companies to counter small bribes, especially when operating in certain sectors and parts of the world, it is important to understand the difference between lawful facilitation payments and illegal bribes to avoid prosecution.
| Characteristics | Values |
|---|---|
| Countries where facilitation payments are legal | Australia, New Zealand, South Korea, and the USA |
| Countries where facilitation payments are illegal | The UK |
| What are facilitation payments used for? | Obtaining permits or to 'jump the queue' for services such as customs checks or visa processing |
| What are facilitation payments called in other countries? | 'Tea money' in Kenya or 'baksheesh' in Egypt |
| What are the issues with facilitation payments? | They can be hard to distinguish from bribery, they can be a part of a cycle of bribery that corrodes public and business standards, they can be hard for management to detect, they can be costly for businesses to resist |
| What are the penalties for facilitation payments in the UK? | Imprisonment for up to a year, a fine, or both |
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What You'll Learn
Facilitation payments are illegal under UK bribery law
A facilitation payment is typically a small bribe given to officials to obtain or speed up routine services that they are required to provide. For example, a company might pay a local council or authority to ensure that the process of obtaining permits and licences runs smoothly and quickly. While these payments may be seen as a way to "grease the wheels" of bureaucracy, they are illegal and can lead to severe penalties.
The difficulty in distinguishing between what constitutes a lawful facilitation payment and an illegal bribe in countries where such payments are legal highlights the importance of understanding the difference. Transparency International UK refers to these payments as "small bribes" to express the true nature of the transaction and provide a clear definition. Resisting small bribes can be challenging for companies, as it may result in delays or competitive disadvantages.
Furthermore, small bribes contribute to a climate of corruption, undermining trust in government, impacting human rights, and distorting business transactions. They can also be difficult for management to detect, especially when made by third parties. Therefore, it is crucial for companies to have robust anti-bribery policies in place and to provide guidance to their staff on the issue of facilitation payments.
While there may be exceptions to bribery offences under the Bribery Act 2010, such as when a foreign public official is permitted or required by local written law to be influenced, facilitation payments do not fall under these exceptions. It is important for companies to understand the legal implications of such payments and to ensure compliance with the law.
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Facilitation payments are small bribes
In the UK, facilitation payments are treated as bribery under the Bribery Act 2010. This means that it is illegal for companies or individuals to make such payments in the UK or abroad. The Act also states that the failure of a commercial organisation to prevent bribery is an offence. The penalties for involvement in facilitation payments can be severe and cases can be referred to the Serious Fraud Office for investigation and prosecution.
Despite their illegality, facilitation payments are common in many countries. They are often demanded by government officials or expected as part of the culture in certain sectors. Companies may feel pressured to make these payments to avoid delays or competitive disadvantages. However, even in countries where facilitation payments are legal, many companies refrain from using them because they are difficult to distinguish from bribery, which could lead to prosecution.
While some may argue that facilitation payments are justifiable in certain situations, such as when there is a genuine threat to personal safety, they ultimately contribute to a climate of corruption. They undermine trust in government, distort business transactions, and can lead to larger-scale bribery and state theft. Therefore, it is essential for companies to have robust anti-bribery policies in place and to provide guidance to their staff on how to handle facilitation payment demands.
Overall, facilitation payments, regardless of their size or intent, are considered bribes under UK law. Companies and individuals must be aware of the legal and ethical implications of such payments and take steps to avoid them, even when faced with operational challenges or demands from government officials.
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Facilitation payments are hard to distinguish from bribery
Facilitation payments are typically small bribes given to public or government officials to expedite or facilitate legal or governmental proceedings. They are often demanded in everyday transactions, such as border crossings, to obtain permits or speed up the processing of goods. While facilitation payments are allowed as an exception to bribery laws in a few countries, they are considered a form of bribery and are illegal under the UK Bribery Act 2010.
The distinction between what constitutes a lawful facilitation payment and an illegal bribe can be blurry and challenging to navigate. Even in countries where facilitation payments are legal, companies tend to avoid them due to the difficulty in distinguishing them from bribery, which could result in prosecution. The difference between the two can be subtle, and making an incorrect judgement can lead to severe legal consequences.
The term "facilitation payment" itself covers payments made to officials to obtain or expedite routine services that they are already obligated to provide. These payments are often hidden in the books and records, further complicating their detection and creating a risk of non-compliance with financial reporting regulations. Additionally, the amounts may seem small in isolation, but they can accumulate over time, resulting in substantial costs and contributing to systemic bribery.
To further complicate matters, there is sometimes uncertainty about what constitutes lawful business hospitality versus a facilitation payment. While offering reasonable and proportionate gifts or hospitality is generally acceptable, it becomes illegal when linked to an expectation of faster services or services that the giver is not entitled to. This grey area underscores the importance of understanding the precise nature of facilitation payments to avoid inadvertently engaging in bribery.
Companies must recognise facilitation payments as bribes and prohibit them as part of their anti-corruption programmes. They should implement anti-bribery policies that provide guidance to staff on this issue, including procedures to resist and refuse such payments without compromising operational efficiency. While refusing bribes may carry costs and competitive disadvantages, adopting a zero-tolerance approach is crucial for maintaining ethical business practices and complying with legal requirements.
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Facilitation payments are often hidden in the books
Facilitation payments are considered a form of bribery in the UK and are illegal under the Bribery Act 2010. The penalties for involvement in facilitation payments can be severe, including up to ten years in prison, an unlimited fine, or both. Cases can be referred to the Serious Fraud Office for investigation and prosecution.
Despite their illegality, facilitation payments are often hidden in the books and records of companies, making them difficult to detect. These payments may be disguised as legitimate expenses, hidden in expense claims or invoices, or miscoded in the financial records. This practice of hiding facilitation payments can lead to a books and records offence under the FCPA, exposing companies to legal consequences.
The subtle nature of facilitation payments makes it challenging to distinguish them from legitimate business hospitality or gifts. Additionally, the amounts involved in these payments may seem relatively small, especially in developed countries, but they can accumulate over time, resulting in significant costs for companies.
Furthermore, refusing to pay facilitation bribes may carry its own costs, such as delays in moving goods or a competitive disadvantage if competitors continue to make such payments. This complexity underscores the importance of understanding the difference between lawful conduct and unlawful bribery to avoid prosecution.
To address the issue of hidden facilitation payments, companies must maintain detailed and accurate books, records, and accounts. Internal accounting controls are also crucial to ensuring management's control, authority, and responsibility over the firm's assets, thereby preventing and detecting corrupt acts.
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Facilitation payments can lead to prosecution
Facilitation payments are often used to obtain permits or to expedite services such as customs checks or visa processing. These payments are also referred to as "grease" payments. While some countries, such as the USA, make specific exemptions for such payments within their anti-foreign bribery legislation, facilitation payments are treated as bribery and are illegal under the UK Bribery Act 2010. This means that making or accepting facilitation payments in the UK or abroad can result in prosecution under this Act.
The UK Bribery Act states that it is illegal for a person associated with a commercial organisation to bribe someone with the intention of obtaining or retaining business or a business advantage for that organisation. Individuals found guilty of bribery under this Act can face imprisonment of up to one year or a fine, or both, on summary conviction. In cases of conviction on indictment, individuals may face up to 10 years' imprisonment or a fine, or a combination of both.
The Serious Fraud Office (SFO) is responsible for investigating and prosecuting serious and/or complex fraud, including corruption, under the Bribery Act. The SFO will prosecute if the evidence shows a realistic prospect of conviction and if it is in the public interest to do so. The Full Code Test in the Code for Crown Prosecutors and the Joint Prosecution Guidance of the SFO and the Director of Public Prosecutions on the Bribery Act 2010 govern the SFO's prosecution decisions regarding facilitation payments.
The difficulty in distinguishing between what constitutes a lawful facilitation payment and an illegal bribe in countries where such payments are legal underscores the importance of understanding the difference to avoid prosecution. Even in countries where facilitation payments are permitted, companies often refrain from utilising them due to the risk of prosecution for bribery.
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Frequently asked questions
No, facilitation payments are treated as bribery and are illegal under the UK Bribery Act 2010.
Facilitation payments are small bribes given to local authorities or officials to ensure that processes, such as obtaining permits or passing customs checks, are quick and efficient. These bribes are often demanded to speed up processes that are already in place.
The penalties for involvement in facilitation payments can be severe under the Bribery Act. Individuals found guilty may face imprisonment for up to a year or a fine, or both. Companies may also be prosecuted if they fail to prevent bribery under section 7 of the Act.
