Facilitation payments

                                                                                   

Definition of facilitation payment:  A facilitation payment is a payment made to persuade officials to perform their duties properly, without resulting in preferred treatment, and where the payment is over and above any payment that is legitimately due.  (For example, unofficial payments may be made in order to obtain import or work permits, or installation of telephone lines, or to pass through a roadblock.)   A facilitation payment is distinguished from a bribe in that a facilitation payment is a payment made to ensure that an official performs his duty properly, whereas a bribe is a payment made to ensure that an official performs his duty improperly.

 

A facilitation payment may be either a small or a large payment.

 

In most countries, the payment and receipt of facilitation payments are treated as criminal offences.  In some countries, they are regarded as a type of bribe.  In other countries, they are treated as a separate offence.  Sometimes, small facilitation payments are not treated as offences or are not prosecuted.  The severity of the penalty sometimes depends on the size of the facilitation payment.  If it is small, the penalty may be small or the offence ignored altogether.  Where a large facilitation payment is made, it may be regarded as a bribe, or be treated as severely as a bribe.

Example (1):   You are applying for an import permit on behalf of your company.  A government official suggests that, if you pay him some money, the issue of the permit will not be delayed.  You make the payment because delay could cause your company to be liable to pay liquidated damages to the project owner.  In this case, you, your company and the official may be liable for an offence.

 

Example (2):  On the instructions of a company director, you arrange for a very large facilitation payment of $1 million to be made to the project owner’s representative so that he will authorise the release of the final payment of $6 million which is due to your company.  In this case, you, the director, your company, and the project owner’s representative may be liable for an offence.

 

In each of the above examples, the facilitation payment was made in order to ensure that the person properly carried out a function which he was already obliged to carry out.