S6: Bribery and Facilitation Fees FSPC purchased two packaging machines for the

Question

S6: Bribery and Facilitation Fees

FSPC purchased two packaging machines for the distribution center and ten pizza ovens from a supplier in Italy. Between the shipping costs, delays, and unanticipated duties, the purchasing manager was worried that his boss would be upset about the total costs. In an effort to reduce costs, the manager offered a US Customs officer $500 in cash to re-classify the imported goods to reduce the amount of duties owed.

Analyze the legal and ethical ramifications of the purchasing manager's offer to the customs official?

Would it make a difference if the purchasing manager offered to donate $500 to St. Jude Children's Research Hospital if the officer expedited the paperwork necessary to release the goods from custom's custody?

Explanation / Answer

Legal Ramifications – It will be illegal on part of both the manager and the officer to be offering and accepting bribery. This is a clear case of custom duty evasion by illegal means which will also hamper the organization’s goodwill and brand value.

Ethical Issue – It is ethically incorrect for the manager to offer the custom officer the $500 bribery to reclassify the good to reduce the duty paid. There is also a ethical and moral dilemma on manager’s part to choose between appeasing the boss or follow the normal course of procedure and hasten the process. He is ethically wrong to bypass the rules and procedures as per the country’s law.

It will not make any difference if the manager offers to donate $500 to St. Jude Children's Research Hospital because he is still paying the bribery which is ethically and legally wrong.

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