Combating Facilitation Payments

Combating Facilitation Payments

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January 07, 2016

spotlight Compliance Champion Spotlight

What is a Compliance Champion? A Compliance Champion is an individual or organization committed to fostering and raising the standards of anti-bribery compliance. TRACE Trends will include posts featuring Compliance Champions from time to time.

We hope you enjoy the following entry from this week’s Compliance Champion, and TRACE Partner Law Firm!

Today’s guest blog post is written by Ms. Ileana Glodeanu of Wolf Theiss Rechtsanwälte GmbH & Co KG, TRACE’s Partner Law Firm in Romania. Wolf Theiss Bucharest provides its clients with the know-how and experience of a leading international practice and contributes to the Wolf Theiss network with extensive legislative research on the relevant laws and regulations governing corporate gifts and bribery in Romania. Ms. Glodeanu leads the firm’s employment practice in Bucharest and regularly advises clients across the CEE/SEE region on employment and insolvency restructurings, as well as on corporate and mergers and acquisitions transactions.

In Romania, as in perhaps half of the European Union member states, corruption offences are still prevalent. Bribe-taking is generally committed in a wide range of activities, such as health, education, and sports, being labelled as a "negative social phenomenon." Bribery also distorts the market economy and impedes the ability of authorities and state institutions to function transparently and efficiently.

In Romanian society, the concept of "facilitation payments" has deep historic and cultural acceptance. Although a facilitation payment is typically a small payment or a gift to a low-level civil servant to secure or expedite the performance of a routine or necessary action, it is nonetheless a bribe, prohibited and sanctioned by a prison term ranging from three to seven years under the Romanian Criminal Code (unlike the U.S. Foreign Corrupt Practices Act, which has an exception for facilitation payments).

However, it is sometimes difficult to avoid such facilitation payments as they remain pervasive. Failure to pay can expose companies and citizens to unjustified delays, such as "lost" files preventing permits or authorizations from being granted in a timely manner, or denial of necessary surgical procedures or medical treatment. Consequently, conscientious and concerted efforts to fight against facilitation payments must be made at every level, by companies, citizens, and society at large.

Companies must express clear policies against bribery and corruption and explicitly forbid their employees from offering or accepting bribes in any form, including favors and facilitation payments. In addition to their internal efforts, companies should require their business partners, contractors, and suppliers to comply with the law.

Finally, conferences, seminars, and academic institutions must educate the public and promote social campaigns raising awareness of the negative effects of facilitation payments. It is critical that all citizens are made aware of the insidious damage this seemingly innocuous practice has on the moral and economic fiber of Romania. To combat facilitation payments, the fight against corruption must take place on all levels of Romanian society.

For more on this topic, please see the following resources:

TRACE Matrix - Romania
"Tipping" Risks in Shipping
The High Cost of Small Bribes

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Ghana at the Crossroads
Justina Song Combating Facilitation Payments

Comments 1

  1. Elliot Fisch

    Policies only part of the picture. Leaders must show that they are ethical and follow the laws so that others can follow their example. Finally, there must be audits to ensure compliance with the policies. Violators of the policies need to be punished.

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