What is the Difference Between a Grease Payment and a Bribe?

A major component of the Foreign Corrupt Practices Act is distinguishing between grease payments and bribes. Some US laws will be applied to your Texas business, even when you’re doing business internationally. The idea of a grease payment, which is legal under the FCPA, is to smooth the process. 

A grease payment, also known as a facilitation payment or a speed money, is a small payment made to an official or government employee to expedite or secure the performance of a routine government action that is already required by law or regulation, such as obtaining permits or licenses, processing paperwork, or expediting shipments through customs. Grease payments are legal in some countries, including the United States, as long as they are not used to secure a government contract or as a quid pro quo for an illegal or non-routine action.

In practice, an agent in another country may ask you for additional money to process paperwork. According to FCPA Compliance and Ethics Report, the grease payment is generally paid to a lower level worker to grant the license. It’s a license that isn’t discretionary. You’re pretty much guaranteed to get it as long as you submit that proper paperwork. But the grease payment itself is paid directly to that official. 

You would have been able to get that license or that next step in the process anyway, whether you pay the payment or not. The biggest thing the grease payment does is to make it go a little faster. 

On the other hand, a bribe is a payment or gift given to an official or a person in a position of trust in order to influence their decision-making and secure favorable treatment that is not already required by law or regulation. Bribes are illegal under the FCPA and are considered a form of corruption. The bribe is paid to get something that you couldn’t otherwise obtain. So, in the case of the bribe, you pay the bribes to an influential official or the decision maker, not the lower level worker who is processing the paperwork. You are giving payments to someone who has discretion in making a decision. This is someone who could say yes or no to your application. 

The key difference between a grease payment and a bribe is that a grease payment is a legal payment made to expedite a routine government action, while a bribe is an illegal payment made to influence an official or secure non-routine or illegal treatment.

A lawyer is necessary to understand the FCPA and grease payments because of the complexity and nuances of the law. A lawyer who specializes in the FCPA can help individuals and companies navigate the legal landscape and ensure compliance with the law. They can provide guidance on what constitutes a bribe or a grease payment, help companies develop compliance programs, and provide advice on how to conduct business in countries where corruption is prevalent.

Additionally, the consequences of violating the FCPA can be severe, including large fines, criminal charges, and reputational damage. A skilled lawyer can help mitigate these risks by providing legal advice and representation in the event of an investigation or enforcement action.

Overall, the FCPA and grease payments are complex legal issues that require specialized knowledge and expertise. Consulting with a lawyer is essential for individuals and companies to understand the law and ensure compliance.

The Guidance and Defense You Need

Hilder & Associates is a skilled team of FCPA defense attorneys who possess significant expertise in handling FCPA matters, which encompasses representing both individuals and companies in high-profile FCPA investigations and prosecutions as defense attorneys. Our attorneys have also served as prosecutors, giving us unique insights into the government’s approach to FCPA cases. Hilder & Associates is proud to have a strong reputation in the legal community and a proven track record of success in FCPA cases. We have successfully defended clients against FCPA charges and negotiated favorable settlements with the government.

Hilder & Associates P.C. is a well-respected law firm with a deep understanding of the complexities of the FCPA and grease payments. We provide individuals and corporations with the expertise, guidance, and representation necessary to navigate these complex legal issues and protect their interests. Contact Hilder & Associates, P.C.  at 713-597-8012 to discuss FCPA compliance or investigations.