Share
Explore BrainMass

The ethics of grease payments in foreign countries.

Say you own a US company and you want to begin doing business in, let's say, Lebanon. You are able to get a connection with a high official in the government. You offer to pay this agent 1% of the contract price if he can help you win the contract. The contract will be close to $10 million, so this is a lot of money to be made. Paying grease money is an accepted practice in this country (this is just for demonstration purposes as I do not know if this is a fact or not, but for this case, just assume it to be true as it is common in may countries). Is this decision to pay a fee to get the contract ethical or not?

Solution Preview

Yes, it is ethical. Grease payments are commonly used and they are ethical, however bribery is not ethical. We can look at the FCPA for the ethical side of this. The FCPA made a provision for grease payments because they found that in many countries, grease payments were actually needed for routine business ...

Solution Summary

This solution discusses the following scenario:

Say you own a US company and you want to begin doing business in, let's say, Lebanon. You are able to get a connection with a high official in the government. You offer to pay this agent 1% of the contract price if he can help you win the contract. The contract will be close to $10 million, so this is a lot of money to be made. Paying grease money is an accepted practice in this country (this is just for demonstration purposes as I do not know if this is a fact or not, but for this case, just assume it to be true as it is common in may countries). Is this decision to pay a fee to get the contract ethical or not?

$2.19