Customs Corruption Risks:  Should a Company Ever Pay a Facilitation Payment to a Customs Official? (Part Three of Three)

Moving goods from one country to another – a staple of many businesses – exposes companies to various points of bribery risk as employees try to navigate different customs regimes and expedite shipments.  One particular area of risk is the temptation to give a customs official a small “grease payment” to quickly clear goods through customs.  Under certain circumstances such payments may be permissible – but not always.  This article, the final installment of The FCPA Report’s series on anti-corruption risks related to customs, takes an in-depth look at facilitation payments in the customs process, which have become “a trap for the unwary,” according to Boies, Schiller & Flexner partner Scott Wilson.  The article examines when, if ever, companies should allow facilitation payments and, if so, how companies should structure their facilitation payment policies.  The first article gave an overview of the types of corruption risks companies face when engaging in international trade, and suggested four ways to mitigate them.  The second looked at the role third parties, such as customs brokers and freight forwarders, play in customs corruption risk and discussed how companies can minimize those risks through due diligence, communicating expectations, contract language and monitoring.  See also “Designing a Facilitation Payments Policy to Minimize Liability and Retain Flexibility (Part One of Two),” The FCPA Report, Vol. 1, No. 4 (Jul. 25, 2012); Part Two, Vol. 1, No. 5 (Aug. 8, 2012).

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