According to Investopedia, facilitation payments are made, general to low-level government officials, with the goal to smooth the progress of a service to which the payer is legally entitled, even without making this payment.[1] Based on the US Foreign Corrupt Practices Act (short: FCPA), such a payment is not illegal.

But attention, most local laws define facilitation payments as bribery. If a global Compliance program only bases itself on FCPA, it tempts employees to violate local laws (and the UK Bribery Act). Further this means a deviation to company’s core values and code of conduct, as most entities define here their sustainability vision and the wish to be perceived as a good global citizen. If the company not consequently protects its values, this can be the start of a lingering corrosion. Employees, who learnt to use facilitation payments, are tempted to continue this strategy not only for external dealings, but also to avoid bureaucratic internal processes.

There is another reason why facilitation payments itself are a stumbling block. Most of the basic public processes are not automatically leading to the wished result, but include some kind of review. If these results not comply with the regulation, the approval gets denied. A facilitation payment supports not only that the process works faster, also these reviews get excluded. These payments are again FCPA relevant.

[1] Investopedia: “Facilitation Payments”

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