Facilitation Payment

In short, a facilitation payment is a bribe. It is an illegal payment made to a foreign public official to induce them to take action in order to secure an improper advantage. The majority of facilitation payments are small in value and are made in cash.

Facilitation payments are sometimes confused with legitimate expenses incurred while doing business, such as regulatory fees or customs duties. However, there is a key distinction: facilitation payments are made with the intention of securing an improper advantage, whereas legitimate expenses are incurred as part of the normal course of business and do not confer any undue benefit.

The Foreign Corrupt Practices Act (FCPA) prohibits the use of facilitation payments by U.S. persons or businesses. The FCPA also requires companies to maintain accurate books and records, which means that any facilitation payments must be accurately recorded as such (i.e., they cannot be mischaracterized as legitimate expenses).