This section provides guidance in relation to the implementation by the organisation of a policy, procedure and guidance in relation to facilition payments: Measure 10 of the Anti-Corruption Programme).
“Facilitation payment” is the term often given to an illegal or unofficial payment made in return for services which the payer is legally entitled to receive without making such payment. It is normally a relatively minor payment made to a public official or person with a certifying function in order to secure or expedite the performance of a routine or necessary action, such as the issue of a visa, work permit or customs clearance. Although facilitation payments are often regarded as different in nature to, for example, a bribe paid to win business, they are illegal in most locations, and therefore should be prohibited by the organisation’s anti-corruption policy.
In some cases, the facilitation payment may be forcibly extracted from personnel by real or perceived threats to safety or liberty (e.g. by police at roadblocks). The safety and liberty of personnel is paramount and many legal systems do not criminalise the making of a payment by someone who reasonably fears for their or someone else’s safety or liberty. Therefore, the organisation’s policy can permit a payment by personnel in circumstances where they have a fear of imminent danger to their or another’s safety or liberty. This exception should not extend to threats of purely commercial harm.
In some cases, the facilitation payment may be expressly requested. In other cases, there will be no express request, but the surrounding circumstances (e.g. body language of the official or delay in issuing a permit) may indicate that the official expects a payment.
In order to help minimise the risk of facilitation payments being made by personnel, the organisation should publish a policy, with supporting procedures and guidance, which state the organisation’s policy on facilitation payments and what should happen if any personnel are faced with requests or demands for facilitation payments. See attached sample policy, procedure and guidance.
The following guidance is designed to assist an organisation develop and implement this policy and procedure.
- In relation to every country in which the organisation is operating or planning to operate, the organisation should, as part of its risk assessment process (see Risk assessment), assess the likelihood of the organisation’s personnel becoming subject to demands for facilitation payments. This risk assessment should include the following steps:
- The organisation should identify, and prepare a schedule of, the permits and approvals that are required for its ongoing or intended activities, and what the correct processes and legally required fees and timescales are for issue of those permits and approvals. To pay a legally required government fee for a permit is not a facilitation payment.
- The organisation should assess whether there is a risk of their personnel being asked for facilitation payments, and, if so, whether these demands can be safely and successfully resisted. The organisation may differentiate in its assessment between facilitation payment demands in relation to routine government services (e.g. permits and approvals) which pose no safety concerns, and demands which may pose safety concerns (e.g. the police). In some cases, when a government official who routinely asks for facilitation payments realises that a particular organisation never makes these payments, or that there is a risk that he will be reported, he may issue the approval without demanding a facilitation payment. However, successfully resisting facilitation payments can mean that the permit will take longer to issue than if the payment was made. Therefore, the organisation may need to build some contingency into its programme to allow for a delay in permit issuing.
- In the event that the organisation’s risk assessment assesses that it is unlikely that it will be able to carry out its work on a project without being compelled to make illegal facilitation payments (i.e. that refusing to pay would probably not be successful), then the organisation should not work on that project. The organisation cannot commit to work on a project knowing that it will be making illegal payments. Not only will the organisation be committing a criminal offence, but it will be compelling or allowing its personnel to commit an offence, and therefore be knowingly exposing these personnel to the consequent risks.
- If the organisation’s risk assessment assesses that its personnel may face a risk of encountering facilitation payments, but that it is likely that the request can be safely and successfully resisted, then the organisation can work on the relevant project, but should ensure that its relevant personnel are informed that these payments are prohibited, and are given guidance as to how these requests should be dealt with.
- If a facilitation payment is made by one of the organisation’s personnel, then the organisation’s procedures must require the personnel to report the payment to the compliance manager, and an appropriate investigation and follow up action should be undertaken (see Dealing with corruption). In particular, the organisation will need to determine whether the payment needs to be reported to the relevant authorities, and whether the payment could have consequent effects (e.g. an illegal payment made to get equipment through customs may make subsequent project payments which depend on the equipment illegal, and therefore result in the project payments constituting money laundering).
- Any facilitation payment made should be accurately recorded in the organisation’s accounts. It should not be disguised as another type of expense, or be deducted from tax, as otherwise the organisation may be committing a separate accounting or tax offence.
- For further more detailed guidance, where a more than low risk of encountering facilitation payments is assessed, see:
- Dealing with Corruption: Actions by organisations: This web-page suggests actions which an organisation could take when confronted with corruption which affects the organisation or its personnel.
- Dealing with Corruption: Actions by individuals: This web-page suggests actions which an individual could take if he/she personally encounters corruption in his/her employment, or in a project in which he/she is involved, or generally (for example, in obtaining a work permit).)
Implementation checklist for Measure 10
- The organisation should develop and publish its facilitation payment policy with supporting procedure and guidance. This can be combined into one document. See attached sample policy, procedure and guidance.
- The organisation should identify on an on-going basis as part of its risk assessment process the extent of the risk that its personnel may face demands for facilitation payments in connection with the organisation’s business, and in which locations this risk may occur.
- Using its risk assessment, the organisation should identify which of its personnel may be exposed to facilitation payment demands.
- A copy of the policy, procedure and guidance (electronically or in hard copy) should be given to all personnel who may, as a result of their role in the organisation, be exposed to the risk of facilitation payment demands. In higher risk cases, appropriate in-person training may also be provided.
Most recent update on 17th February 2016
Page first published on 25th November 2015
© 2016 GIACC