OECD Recommends Prohibiting Facilitation Payments: Are Changes to the FCPA Far Behind?

Marking the International Anti-Corruption Day this week and the 10 year anniversary of the entry into force of the Organization of Economic Cooperation and Development (OECD) Anti-Bribery Convention, the OECD held a high level roundtable meeting in Paris and heard various officials, including U.S. Secretary of State Hillary Clinton and U.S. Secretary of Commerce Gary Locke.

Importantly, the OECD also released its Recommendation for Further Combating Bribery of Foreign Public Officials. The Recommendation urges OECD member countries to prohibit or discourage using facilitating payments. Specifically, the OECD recommends that member countries periodically review their policies on and approach to facilitating payments.

The OECD also encourages companies to set out internal controls, ethics policies, and compliance programs that expressly prohibit or discourage using facilitating payments, recognizing that these “grease” payments are often illegal in the countries where they are paid. The OECD recommends that, in all cases, these payments be recorded accurately in a company's books and records, including not using agents and intermediaries to carry out the bribe for the company. It is recommended that member countries were advised to raise awareness of public officials about domestic bribery and solicitation laws, with the idea that soliciting and accepting facilitating payments could be stopped through greater awareness.

Under the U.S. Foreign Corrupt Practices Act, of course, facilitating payments are a limited exception to the prohibition against bribery. These payments can only be made to expedite “routine government action.” Examples of acceptable facilitating payments would include small payments to obtain permits, licenses, or other official documents; processing governmental papers, such as visas and work orders; providing police protection, mail pick-up and delivery; providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products; and scheduling inspections associated with contract performance or transit of goods across country. U.S. companies and nationals may request a statement from the U.S. Department of Justice Department enforcement intentions regarding any proposed business transaction or conduct.

The OECD’s recommendations are not binding on any member countries, including the U.S. Each member country would have to enact changes in their laws. Companies operating within OECD member countries would be wise to heed the recent Recommendation and review their current antibribery policies and practices, particularly with respect to facilitating payments. Adopting these recommended practices now will instill a culture of compliance and avoid potential civil and criminal liabilities. Companies should also work with their compliance advisors and counsel to monitor potential changes in the FCPA and the laws of other OECD member countries.