Bribery of any kind is illegal. It occurs when one gives or receives a bribe, which is an inducement or an attempt to profit illegally by interfering with due process. In business, bribery takes place where one party seeks to influence a decision by offering or receiving some form of inducement.
In most cases, the perpetrator of a bribery offence doesn’t have to bribe. They are entitled to the service at no extra cost. In some other instances, the perpetrator knows they don’t qualify for a particular service or contract. They, therefore, bribe to nudge the process in their favour.
What is bribery in business?
Bribery is a white-collar crime that involves offering, giving or soliciting something valuable with the intention of influencing a business decision. It may involve bribing someone in a decision-making capacity for the sole purpose of swaying their decision in your favour.
Bribery and extortion are sometimes erroneously interchangeably used. Bribery is a promise to do something for someone only if they do something for you. It’s a “scratch my back I scratch yours” situation. Extortion, on the other hand, involves forcing compliance. It’s a promise to hurt someone if they don’t comply with your demands. Whichever the case, these two vices are rampant in business. Bribery, for instance, is a serious crime that could land one in jail.
The key is to always engage in above-board business transactions and avoid the temptation to seek favours. If you suspect there might be bribery in a business, hire a corporate investigation service to collect sufficient proof.
Below are six types of bribery in business:
Type #1: Sporting Bribery
This type of bribery involves inducing a sporting official to fix a match a certain way. The official takes a bribe and in turn promises to “fix” the match. This is a punishable offence that attracts a jail sentence. For instance, in some countries, should a referee be found guilty of “throwing” a major sporting contest, they could be jailed for several years or fined, or both.
Type #2: Kickback Bribery
This type of bribery in business involves asking for, or promising, a share of a contract should it be granted to you. For instance, a contractor may have to part with some of the money they are paid. This is known as a kickback. The practice is prevalent among government officials seeking to benefit from contracts awarded to various parties.
For instance, an official may demand 10% of the profits or contract’s value. In exchange, they fraudulently award the contract to you. The problem with kickbacks is that they raise the cost of doing business, especially with the government.
Type #3: Bank Bribery
A bank bribery incidence occurs when someone solicits favours from a director or an employee intending to sway a business contract in their favour. It may also involve accepting inducements such as accommodation during travel, meals, or entertainment. Solicitation of illegitimate fees, wages, and salaries from an employee or representative of a bank is outlawed. Should a bank official be offered a bribe, they must disclose the particulars of the crime to the bank to allow thorough investigations and redress.
Type #4: Bribery Involving a Foreign National
It is illegal for corporations in the US to bribe foreign government officials to get a new contract or maintain crucial business contacts. Any publicly-traded company is mandated to maintain records indicating its business transactions, whether the company trades internationally or not.
Despite this rule, some companies have found loopholes in the regulations that are amenable to exploitation. For instance, payments meant to expedite the processing of paperwork to facilitate the award of permits or licenses may not attract penalties.
Type #5: Bribery by a Public Official
This type of bribery in business involves public officials such as a juror, a senator, or a witness who receives or asks for bribes in exchange for aiding an illegal alteration in their duties. The punishment for such crimes is highly punitive. Besides a considerable jail term, the official may be barred from holding public office. On the other hand, offering to bribe a public official attracts a less-strict sentence.
Type #6: Facilitation Payment Bribery
This type of financial settlement constitutes a bribe if its intention is to expedite an administrative process. It is given to a public official to induce them to facilitate a certain process or action. The beneficiary of the process is usually the person making the payment. The goal of this bribe is to help the process along. The irony here is that the briber is entitled to the service without paying for facilitation. While the process is considered normal in some countries, in others it is considered a bribe.
Bribery involves transferring compensation or favours in exchange for a specific decision or preferred treatment. A good example is bribing a public official to sway their vote. The crime of bribery is not an easy one to litigate. This is because it is a nuanced crime that’s hard to pin down to specifics. An act of bribery can be active, passive or facilitation.