INTERNATIONAL PAYOFFS - WHERE WE ARE AND HOW WE GOT THERE

• NCJ Number: 66547
• Journal: Challenge Volume: 19 Issue: 4 Dated: (SEPTEMBER/OCTOBER 1976) Pages: 13-20
• Author(s): Y KUGEL; G GRUENBERG
• Date Published: 1976
• Length: 8 pages
• Publication Format: Article
• Language: English
• Country: United States of America

Annotation

THE ARTICLE DESCRIBES INTERNATIONAL PAYOFFS MADE BY AMERICAN BUSINESSES IN TERMS OF THEIR LEGALITY AND SITUATIONS THAT ENCOURAGE PAYOFFS.

Abstract

THE DISCLOSURE OF LARGE QUESTIONABLE PAYMENTS MADE TO FOREIGN OFFICIALS AND AGENTS BY CORPORATIONS HAS TARNISHED THE BUSINESS COMMUNITY'S IMAGE. SURVEYS HAVE FOUND THAT MANY BUSINESSMEN APPROVE OF INTERNATIONAL BRIBES AS NECESSARY TO COMPETE IN THE WORLD MARKET. INTERNATIONAL PAYMENTS CAN BE CLASSIFIED ACCORDING TO THE RECEIVER OF THE PAYMENT, THE PURPOSE, AND THE FORM, SUCH AS LOANS OR SPECIAL BENEFITS. TO ASSIST EXECUTIVES IN DEVELOPING TRADE GUIDELINES, IT IS USEFUL TO EVALUATE INTERNATIONAL PAYMENTS ON THE BASIS OF LEGALITY: THE BLACK AREA OF BRIBERY AND EXTORTION; A GRAY AREA OF QUESTIONABLE PRACTICES INCLUDING KICKBACKS AND POLITICAL CONTRIBUTIONS; AND THE WHITE AREA OF SALES, COMMISSIONS, WAGES, AND GRATUITIES. A PAYMENT CONSTITUTES ILLEGAL BRIBERY WHEN THE RECEIVER IS IN A GOVERNMENT POSITION AND THE OBJECTIVE IS TO IMPROPERLY INFLUENCE AN OFFICIAL ACTION. MANY QUESTIONABLE PAYOFFS ARE ILLEGAL UNDER SECURITY AND EXCHANGE COMMISSION AND INTERNAL REVENUE SERVICE DISCLOSURE REGULATIONS. A COUNTRY'S CUSTOMS AND LAWS DETERMINE ACCEPTABLE CONDUCT. UNDER U.S. LAW, WAGES, FRINGE BENEFITS, AND GIFTS MADE IN FRIENDSHIP WITHOUT INTENT TO INFLUENCE BUSINESS ARE LEGAL. HOWEVER, CERTAIN TYPES OF INDUSTRIES AND MARKETS CREATE A CLIMATE FOR INTERNATIONAL PAYOFFS, PARTICULARLY WHEN THE COMMODITY SOLD IS A NATURAL RESOURCE ON WHICH THE ENTIRE HOST ECONOMY DEPENDS. PAYMENTS ARE ALSO LIKELY WHEN ONLY ONE CORPORATION IS INVOLVED AND HAS U.S. GOVERNMENT SUPPORT BECAUSE OF FOREIGN POLICY CONSIDERATIONS. MOREOVER, CORPORATIONS' RELIANCE ON FOREIGN AGENTS TO HANDLE TRANSACTIONS ENCOURAGES CORRUPT PRACTICES THAT ARE DIFFICULT TO CONTROL. ALTHOUGH INTERNATIONAL PAYMENTS ARE COMMON, THEY ARE NOT JUSTIFIABLE AND BUSINESSMEN MUST REFORM THEIR ETHICS AND CONDUCT. (MJM)