From the information provided by the Justice Department in Opinion Releases and in enforcement actions, there are several different insights which may be drawn on what should go into your policy on facilitation payments:
Also remember that the defense of facilitation payments is an exception to the FCPA prohibition against bribery. Any defendant which wishes to avail itself of this exception at trial would have to proffer credible evidence to support its position, but at the end of the day, it would be the trier of fact which would decide. So much like any compliance defense, the exception is only available if you use it at trial and it would be difficult to imagine that any company would want this matter to ever see the light of a courtroom.
After answering the above questions and your organization decides it desires to allow facilitation payments, you should draft a policy permits the company to make Facilitating Payments with (1) prior approval of the Compliance Department, (2) prior approval from Company management, and (3) proper financial recording. It may be difficult to distinguish a legal facilitation payment from a request that could be viewed as an illegal bribe or kickback; therefore, Facilitating Payments should be strictly controlled, and every effort should be made to eliminate or minimize such facilitating payments.
Do not forget that facilitation payments must be accurately shown on the books and records of your company. In all cases the employee who requested permission to make the facilitation payment must be responsible for obtaining all required approvals and forwarding a copy of the approvals and any other relevant supporting documentation as required, so that the it is recorded as a facilitation expense in the books and records maintained in a central file. Facilitation payments should not be recorded as consulting fees, entertainment expenses, or other types of expenses that may misrepresent the true nature of the payments.
There may be emergency situations when it will be difficult or impossible for employees to obtain approvals from immediately before having to decide whether or not to pay a facilitation payment. If the facilitation payment is made in an emergency, the employee reports the Facilitating Payment to the Compliance Department and explain the emergency as soon as practical after making the facilitation payment.
Three Key Takeaways
This month’s sponsor is the Doing Compliance Master Class. In 2018, I am partnering with Jonathan Marks and Marcum LLC to put on training. Look for dates of one of the top compliance related training going forward.