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Briber Beware

It might be the way “it’s done here,” but bribing foreign officials is one very big risk. Willing to spend 10 years behind bars?

By  Coletta Kemper

Greasing the palms of the right people can make things happen. Slip the maître d’ a $20 bill, and you may get the table by the window. But one man’s gift is another’s bribe. Slip a government official a few thousand dollars, and you might get a lucrative contract. Get caught, however, and you could pay a big fine or even go to jail.

The U.K. is getting tough on bribery and the scope of its new law scheduled to go into effect April 2011 will snag anyone doing business in Great Britain or with a British citizen.

Bribes have long been viewed as a cost of doing business around the globe. Considering the state of the world economy, perhaps it’s not surprising that bribery is epidemic. In its latest Corruption Perceptions Index, Transparency International, an organization that monitors corruption around the globe, noted that “nearly three quarters of the 178 countries in the index scored below five, on a scale from 0 (perceived to be highly corrupt) to 10 (perceived to have low levels of corruption), indicating a serious problem.”

The most squeaky-clean countries are Denmark, New Zealand and Singapore, followed closely by Finland and Sweden. The U.S. ranked 22nd—its lowest ranking in 15 years (just below the U.K.).

What’s the problem? Some of the most corrupt nations are the developing economies that many companies see as lucrative markets for their products—and that lure is sometimes worth the risk.

Billions are paid to public officials every day, and billions are paid in fines for violating corrupt-practices laws. Google “bribery” to see the scale of the problem. The list of bribery charges reads like a Who’s Who of corporate business.

But even a small businessman can be swept in if he gives a border guard a “fee” to clear a passport or customs. The common defenses given when caught: “local practice” and “promotional expenses.” Neither holds hold much water with law enforcement.

Bribery is not just a bag full of cash furtively handed to public officials. Under the U.S. Foreign Corrupt Practices Act, for example, giving “anything of value” to a public official—trips, entertainment, college tuition, charitable donations, etc.—constitutes bribery.

Bribery may grease the wheels of commerce, but it also interferes with the free flow of trade. At a time when exporting is critical to the global economy, governments are stepping up enforcement of anti-bribery laws. In the U.K., a sweeping new law that takes effect in April has broad ramifications for anyone doing business in the U.K. or with a British citizen, whether or not they are domiciled there. The act also applies to private individuals, not just public officials—a major difference between British and U.S. laws.

The bribery offenses fall under two general principles:

· Bribing another person by offering, promising or giving a financial or other advantage to another person either directly or through an intermediary

· Being bribed by requesting, agreeing to receive, or accepting a financial or other advantage, directly or through a third party for a person’s or someone else’s benefit.

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