Today’s Strategies for Paying Bribes Abroad

What do these strategies for hiding bribes show us? First, best practice is always transparency and honesty in business dealings. If a company is inclined to mischaracterize expenses, provide benefits to government officials for shady reasons, or deal with made-up entities or documentation, that company is likely headed for trouble. Second, being alert to bribery means thinking about the myriad non-cash ways that bribes can flow from a company to a government official. It may not be obvious that a bribe is a bribe, since it could be disguised as a legitimate business expense. Thus, establishing appropriate internal controls, policies, and procedures over the flow of company funds matters. In fact, in a number of recent settlements, the DOJ has required the defendant to set forth policies regarding outflows of company funds that are viewed as particularly susceptible to corruption, such as (i) gifts, hospitality, entertainment, and travel for customers; (ii) customer expenses; (iii) political contributions; (iv) charitable donations; and (v) sponsorships.

Finally, questions, concerns, and anomalies that arise should be addressed promptly. For example, if Orthofix had adequately investigated its excessive training and promotional spending, it might have been able to stop its course of conduct earlier. Better to investigate and address potential problems early on, rather than becoming subject to a US enforcement action later on.

[1] The FCPA (full text) prohibits companies and individuals with ties to the U.S. from offering, promising, or providing bribes or anything else of value to a foreign government official in order to influence that official in his or her duties in order to obtain an inappropriate business advantage.

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