Coping with Corruption in Trading with China

Case

Coping with Corruption in Trading with China

1. List all the different types of bribes, payments, or favors represented in this case under FCPA, Criminal Law of PRC, and Law against Unfair Competition of the PRC. Why is each either legal or illegal?

Under the FCPA there is a distinction between bribery and extortion depending on the activity resulted from voluntary or demanded payment. Bribery can be classified as one company offering money to a high ranking officer in a country to get the company’s goods for import classified under a different code in his bill of lading to avoid higher taxes and duty fees on the items being imported.

The CPC address two laws in the figth against corruption in their country. One of the laws implemented is The Criminal Law of the PRC wich classifies its type of bribery as common bribery. This type of bribery includes payments or gifts to state employees and officials of state owned enterprises in return for benefits.

1. For those practices that you listed as illegal, classify each as lubrication, extortion, or subornation, and explain your reasoning.

The illegal practice of bribery can be easily classified under subornation. Subornation involves a large payment, service, or gift given to an official in order to get a process moving faster or basically have an official look the other way if a law is being broken.

1. Wich of the payments, favors, or bribes are illegal under the Foreign Corrupt Practices Act?

The Foreign Corrupt Practices Act makes it illegal for companies to pay bribes to foreign officials, candidates, or political parties. Stiff penalties can be assessed against company officials, directors, employees, or agents found guilty of paying a bribe or of knowingly participating in or authorizing the payment of a bribe.

1. Assuming that the FCPA did not exist, what is the ethical to each of the payments, favors, or bribes you have identified?

I think the common sense response to anyone in power and control of a country would be what is right and wrong decision to make. By that I mean, the government or person in power must make a choice of knowing what the common good is for the people of that country as well as the benefits that go along with it.

1. In your view, wich of the expenses detailed in the lawsuit could be in violation of the FCPA, and which could be legitimate business expenses as the American Company contends? Discuss.

I think the most significant aspect of the lawsuit is the evidence against the American company paying Chinese Government Officials over a million dollars in fees for services and also extending gifts to a consultant that included hotels, shopping sprees, and entertainment luxuries.