1. Should he pay the “commission” and, if so, to whom? Explain your reasoning. If he pays, how should he handle the situation with the sales manager and the vice president of sales? In your answer, include a discussion of the arguments in favor of paying and the arguments in favor of not paying.
I think he should pay commission to the Middle East Ministry’s advisor. Like the advisor and the agent lawyer said it is common for these deals. The German and the Italian vendors did it. Also local agent’s most of clients which means Canadian companies did it before. It is a huge deal and he has to take it. Also advisor negotiated only $75,000 off the contract price. And I think the reason is he is interesting in his commission not about
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It will be given another company. It may be the ethical one but somebody will pay this money and this one will get the deal.
2. Regardless of how you answered Question 1, is there a way he can avoid paying and yet still manage to salvage the deal? I think it is not possible. Other side has all the authorities and they are the one who will give the decision. They can reject you and make deal with other companies with making it seem legal. You cannot avoid it. The company who gives the money advisor asks, will be the one who makes the deal.
3. Briefly, what does the OECD stipulate about member nations’ obligations regarding bribery &corruption? Since Canada has ratified the OECD guidelines, what are the implications for Canadian business people selling to foreign governments?
OECD published Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and Related Documents to prevent bribery and corruption. The aim of this convention was making the bribery of a foreign public official a crime under their laws (International Monetary Fund, OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 2001). This document recommends to member countries that:
• Member countries’ laws and regulations should permit authorities to suspend, to an appropriate degree, from competition for public contracts or other public advantages, including
In today’s ever changing and competitive modern world of business, it is critical for the companies to have activities internationally. In order to prohibit frauds and illegal activities, several acts and documents have been elaborated. One of the documents is Foreign Corrupt Practices Act that has been enacted in the 1970’s, as a result of SEC investigation of several U.S. companies that made illegal payments to foreign governmental officials, politicians, and political parties (Barnes 73). The FCPA had a critical impact on the way U.S. firms do business. Companies that did not comply with FCPA have been subject of criminal and civil enforcement actions that later resulted in huge fines and sentences for
This case portrays the widely propagated and accepted phenomena of bribes and corruption in developing countries. Specifically how it affects every sector of the Ukrainian society, therefore making it difficult for the American investors to establish companies there and to prosper solely on doing good business. The case describes the types of obstacles and ethical dilemmas being created for the investors as a result of bribery and extortion.
Each of these jurisdictions works together to keep aspects of FCPA from being violated. This law is not always prohibiting all payments to the foreign officials. The FCPA has an exception for anti-bribery prohibitions and that is called “ routine government action.” This exception is also given the names “facilitating” or “ grease payment.” The Foreign Corrupt Practices Act defines this “routine government action” as for a foreign official to perform in obtaining permits, licenses, or other official documents that enable then to do business in that country, processing government papers such as visa and work orders, protection services and conducting inspections, and anything that has similar nature (6). The Foreign Corrupt Practices Act (FCPA) has two affirmative defenses and they consist of assertion that payment in question was lawful under the laws of the foreign country, and the assertion that the payment was valued a bona fide expenditure (6). This affirmative defense is aimed to be for the issuer, domestic concern, or other person. In this affirmative defense there must be some type of written law authorizing or supporting the payment. The penalties for violating the Foreign Corrupt Practices Act are different from the provision that they fall under. For an individual and it is from the anti bribery
Author Scott Nette clearly explains that in July 2007, Anthony Tesvich, Melissa Tesvich, James P. Robinson and Ronald K. Jonston was Investigated, charged and convicted on the Foreign Corrupt Act. “The Foreign Corrupt Act States that it is illegal for an US person, entity and certain applicable foreign entity to make and/or accept bribes or offer any inducement for the purpose of obtaining or retaining business with an US firm.” – Scott Nette
The impact the Foreign Corrupt Practices Act had on society was pleasant since it restored buyer confidence in the United States and restored the integrity of the United States market by implementing honesty in transactions. Yet it imposed too many disadvantages for the economy and corporations. The Foreign Corrupt Practices Act focuses on large fraudulent payments made by a business, therefore anyone involved in the financial, accounting, and executive department are impacted the most. Other major stakeholders affected include the board of directors, shareholders, employees, government officials involved, and foreign officials or foreign companies involved. Everyone is affected because the codes of conduct, and the companies’ values needed
The Foreign Corrupt Practices Act (FCPA) is second in discussion which, applies to all companies operating out of the United States. The standard of way to conduct business here in the United States and Japan are to be acknowledged because of the cultural differences. The law requires U.S. organizations to represent and report global exchanges precisely and demoralize the activities of officials that attempt accept any kind of pay off, or monetary motivators in return for opportune and favorable business decisions. While in Japanese business, culturally it might be seen as sign of good gesture to offer government officials financial gains in order to get business advantages, unlike in the United States where it is illegal to do so. The Foreign Corrupt Practices Act of 1977- is a U.S. Federal Law that
The Foreign Corrupt Practices Act (“FCPA”) is the first globally enforcing statute making anti-corruption effort in the world. It has been known for the broad enforcement coverage in terms of the worldwide governing jurisdiction and anti-gaming legislative approach leading to a long time debates and discussions among practitioners and law commentators. This paper will focus on improving one of the undefined and broadly interpreted terms - “instrumentality” in the anti-bribery provisions of FCPA which essentially serves as the catch-all legislative device to prevent gaming, however, on the other hand, leaving problems in terms of ambiguity in interpretation. This paper will first provide an overview of the FCPA. Second, this paper will explain the global enforcement impact for the multi-national businesses. Thirdly, this paper will discuss the importance and problems of the term “instrumentality” applied in the anti-bribery provisions of FCPA. Then, this paper will try to identify the essence of “instrumentality” and its related problems through studying relevant cases. Finally, this paper will offer solutions in order to solve the current problems related to “instrumentality” interpretation and draw the conclusion. For the purpose of narrowing the focus of this paper, the discussion and analysis will be mainly based on the anti-bribery provisions of FCPA regulating the issuers.
The Foreign Corrupt Practices Act changes the way business is done in the global market because it levels the playing field for other competitors who are vying to make their mark in other developing countries. It also affects the way other countries conduct business as well. Since the introduction of this act, many countries have adopted similar laws as well. In 1997, the Organization for Economic Cooperation and Development signed a treaty that made bribery of foreign officials a serious crime. This treaty improves the way business is conducted globally and also levels the playing field for US businesspersons.
2. How would leveraging capabilities with respect to the Indonesian market differ between an Australian/New Zealand producer of computer software and an Australian/New Zealand manufacturer of automotive parts?
The seller’s agent did more harm than good. When Marsha contacted the seller’s agent, he/she was overjoyed and proceeded to accept Marsha’s offer to purchase Boren’s house. The agent fulfilled their duty to the principal through loyalty, and accounting. The notification duty fell short when the agent failed to alert the seller of his/her purchase acceptance made on her behalf. In this instance, obedience and performance seem to be similar duties. Not enough information is given to know whether the real estate agent was permitted to accept offers on behalf of the seller without first consulting her.
Prior to 1997, foreign bribe payments were not only legal, but even tax-deductible as a legitimate business expense. On December 17, 1997, Canada signed the OECD Anti-bribery convention, and Parliament passed the CFPOA to implement Canada’s obligation under the OECD Anti-Bribery Convention into Canadian Law. With the adoption of the CFPOA which received Royal Assent on December 10, 1998, the Government of Canada deposited its instrument of ratification with the OECD on December 17, 1998, thereby becoming a party
In order to draw that line companies should look at three different aspects. First, the international laws about gifts and bribes must be carefully analysed. Second, companies should gather information in regard to what is permitted by the local culture. Last but not least, companies must look carefully at their CSR strategy in order to see which kind of gifts there are ready to accept in order to be in line with their core values.
Moreover, the biggest bright spot of Bribery Act 2010 is to set up two new crimes, the bribery of foreign public officials and strict liability of the company who does not prevent bribery. According to the act, to bribe the individual who is in British foreign legislative, executive or judicial position, or to exercise any public function or as a public international organization agent, will all be committed a crime as bribery of foreign public officials. Also, it put forward some new legal requirements. As far as Prevention of Bribery of Negligence is concerned, it is a new charge created by the act. Besides, it is set against the establishment of the company, which points out that if the company 's employees, subsidiaries, offices and even other third party implement bribery for the company’s interests, no matter these actions are taken in the United Kingdom or abroad, the company will be charged, even if it is not involved or has no idea of this(Mukwiri, 2015).
Measuring a potential business venture has many aspects which the international manager must be aware of in order to convey the correct information back to the decision makers. Being ignorant to any of the aspects can lead to a false representation of the project, and hence an uninformed decision being passed. In order for a business to survive it must grow. For growth to be optimal, management must first be able to identify the most attractive prospective leads. The country as a whole, specifically geography, government, and financial aspects must be looked at in order to yield the best possible picture of the market a company wishes to enter. Concentration should be placed on gathering reliable facts
In September 2013, a former Politburo member, Xilai Bo, was sentenced to life imprisonment for embezzlement, bribery and abuse of power. With millions of dollars of bribery money, this Chinese communist leader got the punishment of spending the rest of his life in prison, and also brought influential stress and trust problem in China (The Economist, 2013). This incidence also have drawn international’s attention, with such negative reputation a question mark has been put on China’s trust worship, consequently is also weakening of China’s international position and power. Corruption has always been a worldwide focus, with bribery one of the leading problems