The term "facilitation payment" refers to:

  1. Incentives provided to boost employee performance
  2. Payments made to accelerate legitimate government processes
  3. Legal fees paid for auditing and compliance services
  4. Compensation to executives for improving company revenue

Answer (Detailed Solution Below)

Option 2 : Payments made to accelerate legitimate government processes

Detailed Solution

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The correct answer is - Payments made to accelerate legitimate government processes

Key Points

  • Facilitation Payment
    • These are typically small amounts of money paid to government officials.
    • The purpose is to expedite or secure the performance of a routine governmental action.
    • Examples include speeding up the processing of permits or licenses.
    • Such payments are considered bribes in many jurisdictions, but they are legally permissible in some under specific conditions.

Additional Information

  • Legal Context
    • Facilitation payments are generally legal under the Foreign Corrupt Practices Act (FCPA) in the United States, but the payments must be for routine governmental actions.
    • The UK Bribery Act 2010, however, does not recognize facilitation payments as legal and prohibits them entirely.
  • Ethical Considerations
    • While facilitation payments may be legal in some jurisdictions, they are often viewed as unethical because they can perpetuate corruption.
    • Many organizations have internal policies that prohibit such payments to maintain ethical standards and corporate integrity.
  • Difference from Bribery
    • Facilitation payments are meant to expedite routine actions that officials are already obligated to perform.
    • Bribery involves paying an official to obtain or retain business or secure an improper advantage, which goes beyond routine governmental actions.
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