Yesterday I attended a conference on the Foreign Corrupt Practices Act, put on by the American Chamber of Commerce. If you engage in business in Cambodia and you’re not already familiar with the FCPA, you really should be. The law bans any corrupt payment to a foreign government official to obtain or retain business.
Though it’s an American law, it applies anywhere in the world to a shockingly broad range of companies and individuals. Of course US citizens and companies are subject to the law, but also any company listed on a US stock exchange. One lesson from yesterday was that if the corrupt payment is made in US dollars, even through a foreign bank, it likely was cleared through a US bank and therefore would be subject to the law.
If somehow you’re not subject to the FCPA, there are equivalent extra-territorial laws in many other countries, not to mention the recent Cambodian Anti-Corruption Law. The take-home message was that a foreign company or individual is most likely subject to such laws, and even if you’re not – bribery is a terrible risk to your business reputation.
A recurring issue at the conference was the question of facilitation payments. There seems to be an exception to the FCPA which allows for payments to facilitate or expedite performance of “routine governmental action”. This is a recognition that in certain countries such payments are standard practice, and if you do not pay them, absolutely nothing will get done. The line between acceptable facilitation payments and illegal bribes is a fine one, and you’ll often hear outright bribes described as “facilitation fees”. Don’t be tricked by funny language – if it smells rotten, it probably is. In general, a facilitation fee should be a relatively small amount, which almost everyone else is paying, and the government official who receives it should not have too much discretion over your matter. Also the payment cannot be giving you an advantage over your competitors. Obtaining government papers, routine licenses, phone service, and police protection are a few examples. But again, there’s a lot of gray area, and so it’s best to get an experienced lawyer’s advice if you’re unsure.
The conference was entitled “FCPA: Ignorance is No Excuse”, I would add that neither is “but-everyone-else-is-doing-it”. To date there have been no prosecutions in Cambodia, though there have been in Vietnam and Thailand. The Obama Department of Justice has made FCPA prosecutions a priority, with a number of high-profile investigations. It’s only a matter of time before an investigation hits Cambodia – don’t let it be you.