Mountford Chambers
2 Experts
3 Contributions by Mountford Chambers Experts
PRACTICE NOTES
Facilitating the performance of a duty by public officials
Facilitation payments, sometimes termed ‘grease’ or ‘facilitating’ payments, are typically modest sums made to public officials or third parties in order to secure the carrying out of their functions, either more swiftly or even to ensure it occurs at all. This may extend to the giving of ‘gifts’, such as cigarettes or alcohol. In certain jurisdictions, these payments are routine and lawful (eg permitted in some situations under the US Foreign Corrupt Practices Act 1977 (FCPA 1977); see Practice Note: The US Foreign Corrupt Practices Act 1977 (FCPA 1977) and Bribery Act 2010 (BA 2010) comparison table).
Are facilitation payments illegal under BA 2010?
Such payments amount to the offering, promising or providing of a financial advantage and therefore constitute bribery, as the Bribery Act 2010 (BA 2010) provides no
Corporate Crime
PRACTICE NOTES
Offset arrangements occur when a bidder must provide, or is offered, extra investment, payments, or other industrial, commercial, or economic advantages as a prerequisite of its tender, typically as part of a public procurement arrangement or contract. Prevalent in the aerospace and defence sectors, these mechanisms are also known as offset agreements, industrial benefit, industrial participation, industrial co-operation, juste retour, or counter-trade. Buying states often insist on offsets to balance substantial procurement outlay, or to secure access to advanced technology or employment opportunities. Numerous jurisdictions embed offsets within bid evaluation criteria and attribute considerable weight to them when scoring tenders at the award stage.
Types of offset arrangement—direct or indirect
Direct offset
A direct offset links straight to the principal contract, for example producing a component within the buyer’s territory.
Indirect offset
An indirect offset arises when the supplier, or its government, must purchase or invest in
Corporate Crime
PRACTICE NOTES
Commissions
Commissions amount to offering a financial benefit to another. They are not invariably bribes. Typically, a commission arises when a seller or buyer provides a benefit to a third party or fiduciary for arranging or mediating the supply of goods or services, or otherwise assisting with a transaction for goods or services. While normal in many industries and accepted practice, an anticipated advantage can create a tangible risk that functions are performed improperly. A commission can also be a facilitation payment, paid to secure the performance (or swifter performance) of an obligation already owed (see Practice Note: Facilitation payments under the Bribery Act 2010). Where a commission is a facilitation payment, it is unlawful. The Serious Fraud Office (SFO) has indicated it will bring proceedings where the Code for Crown Prosecutors, Full Code Test is satisfied; namely, there is a realistic prospect of
Corporate Crime
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