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Facilitation payments

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If you believe that there is an increased risk of your suppliers offering facilitation payments, and you wish to include this topic in the annex to your Code of Conduct, you can add the following requirements to your Code of Conduct by clicking on "Save to clipboard".

Facilitation payments are usually small amounts offered to public officials in order to achieve the rapid processing of routine services to which the party offering the payment is already entitled.

Facilitation payments

Recognising that facilitation payments are bribes and illegal in most jurisdictions, the supplier should ensure;

a. To prohibit the use of facilitation payments.

b. That in instances where the supplier may be confronted with exigent circumstances, in which the making of a facilitation payment can hardly be avoided, such as duress or when the health, security or safety of the supplier’s employees are at risk, facilitation payments made under such circumstances, shall be accurately accounted for in the supplier’s books and accounting records as well as reported to relevant authorities.

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Below there is more information about various aspects of facilitation payments.

What are facilitation payments?

Facilitation payments are usually small monetary amounts offered in order to facilitate the rapid and efficient performance of routine procedures to which the company or supplier is already entitled. Facilitation payments are thus a way of speeding up ongoing processes/procedures.

Facilitation payments are generally considered to be a significant problem for the world economy and there is international support to eliminate this phenomenon. Such elimination will require economic and social progress and persistence in relation to national legislation. Facilitation payments are thus prohibited in most countries.

An example

Assume, for example, that a company requires a specific licence to be able to start up its activities. The company is entitled to the licence and complies with all relevant requirements. The company is ready to start up the activities, but is legally obliged to wait for the licence to be issued. The company therefore gives a small amount to a public official who can help to facilitate the processing of the licence, so that the company can start up the activities. The company's payment to the public official is considered to be a facilitation payment.

If the company, on the other hand, pays an inspector for ignoring the fact that it does not have a valid licence to operate its activities, this will be considered to be a bribe, and not a facilitation payment. This is because the payment is not made to ensure or accelerate a service to which the company is already entitled.

When are facilitation payments offered?

Facilitation payments are often offered in conjunction with:

·  Acceleration of permits, licences or other public documentation;

·  Processing of official documents such as visas or work permits;

·  Police protection, collection and delivery of post and planned inspections;

·  Delivery of telephony, electricity and water supplies and loading of freight consignments.

 

Zero tolerance is recommended

Companies can sometimes face situations where it is considered normal practice to pay a small amount to a public official in order to speed up a matter, even though this is illegal. By making facilitation payments, the company or supplier is contributing to maintaining corruption in society and potentially leaving itself open to extortion. Companies are therefore usually recommended to prohibit facilitation payments and to introduce a zero-tolerance policy.

In cases where a company or supplier defies the prohibition and nonetheless makes facilitation payments, for example due to a threat to an employee's health or safety, the company or supplier should always book the amount in its accounts, attach an explanation, and report the incident to the relevant authorities.

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