James Tillen Comments on Facilitating Payments under the FCPA and U.K. Bribery Act in Compliance Week

"Companies Lacking in Facilitation Payments Policies"
Compliance Week

James Tillen discusses facilitating payments in the context of the FCPA and the new U.K. Bribery Act. It seems that the Department of Justice and the Securities and Exchange Commission have narrowed their definition of facilitating payments, says Tillen. "The Palapina line of cases, for example, is a pretty good indication that areas where facilitating payments are common are closely reviewed and scrutinized by the DoJ and the SEC," he says. "The Wabtec case is three years old, but is still something to look at, because there were a number of payments there and some that appeared to be facilitating in nature, and yet were lumped in with bribes and prosecuted just the same."

In some cases, facilitating payments were judged more harshly when they were accompanied by what was later determined to be bribes. "The point is that even if you think you're being rigorous on facilitating payments, if other bribes come to light, it may make what you thought were just facilitating payments look even worse— there's the concern of guilt by association," says Tillen. To prevent facilitation payments, companies need to plan ahead, Tillen says. "Find out where in your company these payments could be made and then think about how you could mitigate that, either by building in extra time into your shipments, finding out which officials in that area are cleaner and trying to use them, or finding out where it's occurring and then developing procedures and plans to avoid those opportunities where they could be seeking facilitating payments from the company."

Perhaps the best practice in addressing facilitation payments is to prohibiting them altogether, thereby alleviate the risk of prosecution under local law and the U.K. Anti-Bribery Act. It also avoids sending mixed messages in employee training, Tillen says. Another step is having rigorous internal controls to make sure that all the paperwork is in order, for example, for a visa application, import, or work permit, so that there's less opportunity for officials to seek a payment, he says.

Related Files
Related Links