Definition
A facilitating payment is a certain type of payment to foreign officials that is not considered to be bribery according to legislations of some states as well as in the international anti-bribery conventions, e.g., coming from the OECD.
Facilitating Payment
What is ‘Facilitating Payment’
A financial payment that may constitute a bribe and that is made with the intention of expediting an administrative process. A facilitating payment is a payment made to a public or government official that acts as incentive for the official to complete some action or process expeditiously, to the benefit of the party making the payment.
Explaining ‘Facilitating Payment’
Generally, facilitating payments are demanded by low-level, low-income officials in exchange for providing a service to which the payer is entitled even without the payment. Certain countries do not consider facilitating payments bribes as long as such payment is not made to earn or maintain business, or to create an unfair or improper advantage over another business. Such countries may believe these payments are simply a part of the cost of doing business. In other countries, including the United Kingdom and Germany, facilitating payments made abroad are considered bribes and are prohibited.
Further Reading
- Access to financial services: A review of the issues and public policy objectives – academic.oup.com [PDF]
- Corruption and companies: The use of facilitating payments – link.springer.com [PDF]
- Bitcoin: Economics, technology, and governance – www.aeaweb.org [PDF]
- Subregional financial cooperation: the South American experience – www.tandfonline.com [PDF]
- What is optimal financial regulation? – books.google.com [PDF]
- Mobile Phones and Financial Services in Developing Countries: a review of concepts, methods, issues, evidence and future research directions – www.tandfonline.com [PDF]
- Exploring consumer adoption of proximity mobile payments – www.tandfonline.com [PDF]
- Financial sector development, economic growth, and poverty reduction: A literature review – papers.ssrn.com [PDF]
