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The ethics of grease payments in foreign countries.

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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?

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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?

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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 ...

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