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. 

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. However, that’s a lower level worker in a grease payment that is legal under the FCPA. 

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. 

The bribe, on the other hand, is illegal under the FCPA. 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. 

Please contact Hilder & Associates, P.C. to discuss FCPA compliance or investigations