Saturday, October 3, 2009

Facilitation payments vs. Bribe

There is a thin line between facilitation payments and bribe. While the former is an accepted business expense in some countries, the latter is never considered as legal expenses.
Facilitation payments are payments made to speed-up the transaction or facilitate faster disposal of a matter without any material change in the treatment or decision. Such payments are not considered as bribery.
On the other hand, bribe has a much larger element of corruption and is meant to change the decision in favour of the person making the payment. This is certainly against ethics.
Of late, the distinction is getting increasingly blurred.
In India, thankfully both facilitation payments and bribe are payments contributing to corruption and not recognised as business expenses.

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