The primary U.S. anti-corruption law, the Foreign Corrupt Practices Act (FCPA), prohibits U.S. citizens and entities from bribing foreign government officials. Do you understand these prohibitions? How do the FCPA and other anti-bribery laws apply to business aviation?
Corruption payments to a foreign official is a serious crime and conviction can carry substantial penalties, but not all corruption is easy to identify. A “foreign official” includes not only foreign government employees, but also employees of foreign airlines and maintenance organizations that may be controlled by foreign governments.
Furthermore, commercial bribery of any person is generally prohibited under the laws of many countries.
A common scenario that business aircraft operators encounter is one in which a foreign government official, such as a customs agent, requests a cash payment to “expedite” immigrations processes.
While many people think of cash payments in corruption scenarios, Jonathan Epstein, a partner at Holland & Knight LLP, says the giving of anything of value to induce a foreign official to take some action, such as directing business to a company, could be a violation of the FCPA. Hence, companies need to be careful with meals, entertainment and gifts as well.
In general, giving a mug or other low-value item, or taking a person out to dinner after a business meeting, is common and generally appropriate. However, companies should not provide expensive gifts or “junket” type trips to foreign officials and their families, or hire children of foreign officials as a favor.
Experts offer several best practices to minimize the chance of inadvertently running afoul of the FCPA or other anti-corruption laws.
First, have a clear, zero-tolerance company policy related to facilitation or “grease payments” and unauthorized gifts.
Second, requests for cash payments should be questioned. Posted, documented fees for expedited service, such as an expedited visa, are common and typically legal. However, undocumented fees paid directly to an individual are likely a grease payment.
“You have to be careful when there’s cash moving around,” said Kathy Self, Universal Weather & Aviation’s vice president, chief compliance officer and data protection officer. “Consider where the money goes. Is it to a government agency or an individual?”
Flight crew members asked to pay a cash fee for services should be instructed to say no – cash payments are against company policy.
Company Policy Consistency
It’s also important to have alignment between the home office and aviation operation. The zero-tolerance policy regarding unauthorized payments or gifts should apply to everyone at the company.
“Be consistent,” said Self. “Consistently saying ‘no’ will eventually put an end to the question.”
Also, audit your invoices and be sure you understand all charges. A “miscellaneous” fee for $10 with an attached receipt for ice is explainable. A miscellaneous fee for $100 with no description or evidence of the final beneficiary of the fee should be questioned.
Keep in mind that many foreign airports are run by governments, meaning that every airport employee is a government official of some kind. Tipping someone carrying baggage in the U.S. might be a common practice, but providing a cash payment to someone carrying baggage in some countries could be considered a grease payment or bribe.
In addition to establishing internal policies to avoid corruption, know your international handlers’ and vendors’ policies regarding corruption avoidance, and don’t allow your handlers to dole out cash payments on your behalf without a valid receipt.
Courtesy of NBAA