Facilitation payments are often a debated topic, but what is a facilitation payment in the Bribery Act 2010? Many business people believe that facilitation payments don’t count as a form of bribery or aren’t sure what the difference is between legitimate business hospitality and bribery. The Bribery Act 2010 applies across the whole of the UK.
This article aims to clarify what counts as a facilitation payment, discussing some facilitation payment examples and the potential penalties for committing an offence.
Facilitation Payments in the Bribery Act 2010
What Are Grease Payments?
A definition of facilitation payments (or ‘grease payments’, as they are sometimes known) could be ‘payments to induce officials to perform routine functions they are otherwise obligated to perform’.
So, what is a facilitation payment in the Bribery Act 2010? Facilitation payments, also known as ‘grease payments’, can be payments to officials in exchange for services. Typically, these services are a part of the official’s job, but the payment may be used to expedite the process or alter the outcome. They can also be used to persuade officials to commit other improper actions. There are any number of situations where concerns may arise about the legality of a payment to a third party.
In broad terms an offence is committed if the person making the facilitation payment does so as an incentive for an official to work to their advantage or as a reward for an official who has already done so. Both the offering and accepting of a bribe are offences.
Facilitation payments or bribes are considered distinct from bona fide business hospitality. Gifts and hospitality must be proportionate to the business and, vitally, must not come with any strings attached. This means that gifts or hospitality cannot be offered to officials in exchange for expedited or improper services.
If you are unsure whether or not your business hospitality crosses the line into bribery, it’s helpful to know what a facilitation payment is in the Bribery Act 2010 to avoid committing an offence.
Facilitation Payment Examples
Some examples of facilitation payments include:
- Customs offices – customs officers may be paid to allow an individual to pass into or out of the country without a proper inspection or the premature release of held goods.
- Police – an officer may be paid to ‘lose’ or ‘make a mistake’ on necessary documents, or create offences and harass another individual.
- Court system – officials within a court system may access documents that they should not in favour of the paying individual.
Are Facilitation Payments Considered Bribes?
In short, yes. Under the Bribery Act 2010, facilitation payments are a form of bribery and are penalised as such, with cases often being escalated to the Serious Fraud Office (SFO) for investigation. However, this is not the case everywhere.
Outside England and Wales
Bribing or attempting to bribe a foreign public official (anyone with a ‘legislative, administrative or judicial position of any kind’ outside the UK) is still committing an offence against the Bribery Act 2010 of facilitation payments if the aim is to acquire or maintain a business advantage.
In other countries, such as Australia, facilitation payments are not considered illegal. However, because they are so difficult to distinguish from bribery, many companies avoid them. In the US, facilitation payments are also legal as they are considered to be payments that expedite an official process but do not change the outcome of that process.
Facilitation Payments and Businesses
Under section 7 of the Bribery Act 2010, failure of a commercial organisation to prevent bribery is an offence. It follows that facilitation payments and other bribery offences should be reviewed by businesses. If an employee or associate is not prevented from committed bribery in the business’s name, then the business may commit the section 7 offence over and above any offence committed by a person associated with the business.
In order to avoid a charge, the business must be able to prove that it has taken reasonable precautions and put procedures in place to avoid the bribe from occurring.
Penalties for Facilitation Payments
If you are found to have made facilitation payments in the Bribery Act 2010, the penalties can be steep. For a summary conviction, you could face up to twelve months in prison, an unlimited fine or both. If you face an indictment conviction, you could face up to ten years in prison, an unlimited fine, or both.
As a business, if you have been charged on an indictment conviction for failing to prevent bribery, you can be fined.
St Pauls Chambers
St Pauls Chambers’ bribery law barristers have extensive experience with bribery cases. One of our barristers made legal history by securing the first-ever bribery acquittal following a Deferred Prosecution Agreement.
If you or your client are under investigation for making a facilitation payment or would like more information on what a facilitation payment is under the Bribery Act 2010, please contact St Paul’s Chambers today.