In this Open Comment Period: Comply with Anti-Bribery Laws
In this open comment period the Office of Business and Financial Services and the University Ethics and Compliance Office present a proposed addition to the OBFS Policies & Procedures Manual - Comply with Anti-Bribery Laws.
The University is subject to, and must comply with, the Foreign Corrupt Practices Act (FCPA) of 1977. The anti-bribery provisions of the FCPA make it unlawful for the University or an employee, officer, trustee or agent of the University, to bribe a foreign official in order to influence any act or decision of the foreign official or to secure any other improper advantage in order to obtain or retain business.
The proposed policy is based upon the FCPA and provides clear guidance on the University's expectations for members of the University community participating in international activities both in Illinois and abroad. Implementing the policy will reinforce with those seeking to do business with the University that the University is an ethical and reliable compliance partner.
The University does not permit bribes, kickbacks, or other similar unlawful inducements to be offered or given to any individual, organization or government, either directly by an employee, officer or trustee or indirectly through an agent or intermediary.
To prevent third parties from offering corrupt payments on the University's behalf, all University employees, officers and trustees must exercise care and take precautions to ensure all University business relationships are with reputable and qualified persons and entities.
The University also prohibits its employees, officers, trustees and agents acting on behalf of the University from accepting bribes, kickbacks, or other similar unlawful inducements offered for the purpose of influencing the individual or the University in connection with any University activities.
Reason for the Policy
The University is subject to, and must comply with, the Foreign Corrupt Practices Act (FCPA) of 1977. The anti-bribery provisions of the FCPA make it unlawful for a U.S. person, including the University or an employee, officer, trustee or agent of the University, to pay or authorize the payment of money or anything of value to a foreign official in order to influence any act or decision of the foreign official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business. The law prohibits not only cash bribes but also offers of favors and other inducements that are of value to the recipient, such as inappropriate gifts and entertainment. The FCPA prohibits direct payments or offers to foreign officials, as well as indirect payments or offers made through a third party, such as a consultant or other agent.
Violations of the FCPA and similar foreign laws, such as the U.K. Bribery Act of 2010, can lead to criminal, civil and regulatory penalties for the University and the individuals involved, as well as disciplinary action, up to and including termination of employment. Violations can also result in significant damage to our collective reputation. Foreign bribery laws may be more restrictive than the FCPA.
Applicability of the Policy
All University employees, officers, trustees and agents (contractors, associates and other third parties acting on behalf of the University) must comply with the FCPA.
The University of Illinois participates in many international activities in Illinois and abroad. The following are examples of University activities where the FCPA and similar foreign anti-bribery laws are particularly relevant:
- Collaborations with foreign institutions and entities, especially those owned or operated by a foreign government;
- Events hosted by the University that include foreign visitors, especially foreign officials;
- Projects that involve interactions with foreign officials; and
- Education programs offered overseas or on a campus in which foreign officials may enroll.
Anti-Bribery Procedures Report Suspected or Known Violations
Any suspected or known violation of this policy must be reported to the University Ethics and Compliance Office. Contact the University Ethics and Compliance Office via the toll-free Ethics Line at 1-866-758-2146 or email at firstname.lastname@example.org.
Bribes and Kickbacks
"Bribes" and "kickbacks" can be money or anything else of value, such as:
- Gifts, meals, hospitality, entertainment, and travel expenses to foreign officials and/or their family members of any value if they are likely to evidence an intent to improperly influence a foreign official;
- favors provided to foreign officials, such as an internship for a family member outside the normal hiring process, or hiring a vendor owned by a foreign official or a member of his or her family, or admitting to an educational program an unqualified candidate because of his or her relationship to a foreign government official;
- donations to a charity associated with or at the request of a foreign official; and
- free use of University facilities or property.
Agent or Intermediary
For the purpose of the University policy, an agent or intermediary refers to a person or entity retained to represent the University or help the University conduct business in a foreign country.
Obtaining or Retaining Business
Obtaining or retaining business is interpreted broadly and encompasses more than the mere award or renewal of a contract. For example, it may include payments to obtain favorable tax treatment. Also, the business to be obtained or retained does not need to be with a foreign government or foreign government-controlled instrumentality.
Reputable and Qualified Partners and Representatives
In exercising care and taking precautions to ensure business relationships are only with reputable and qualified partners and representatives, University employees, officers and trustees should conduct due diligence appropriate under the circumstances. In this regard, the U.S. embassy or consulate may be a good source of information on the reputation and business practices of the prospective partner or representative. In negotiating a business relationship, red flags should be considered, e.g., unusual payment patterns or financial arrangements, a history of corruption in the country, unusually high commissions, consulting agreements that include only vaguely described services, lack of transparency in expenses and accounting records, apparent lack of qualifications or resources on the part of a prospective partner or representative to perform the services offered, and whether a prospective partner or representative is related to, closely associated with or recommended by an official of the potential governmental customer.
Willful Blindness and/or Deliberate Ignorance
To constitute a violation of the FCPA, the payment or other inducement to the foreign official must be made knowing that it is unlawful. However, a person subject to the FCPA will not avoid civil or criminal liability by willful blindness,deliberate ignorance, or by engaging a third-party to take action on behalf of the University under circumstances where there is a high probability the third-partys action would violate the FCPA.
Entertainment and Gifts
Entertainment and gifts that are not allowed include:
- Any gift of cash or a cash substitute;
- Anything that is offered as a quid pro quo;
- Any gift or entertainment that is illegal under the foreign countrys laws, or known to be prohibited by the foreign officials department, agency, or organization;
- Anything that may result in, or may be perceived as resulting in, a decision by a foreign official providing a personal benefit to a member of the University community;
- Anything given to foreign officials associated with a tender or competitive bidding process where the University is involved;
- Any inappropriate entertainment (such as entertainment that is illegal under local law or U.S. law);
- Any travel, entertainment, or gifts to family members of foreign officials. (In rare instances and subject to the express pre-approval of the Office of Business and Financial Services (OBFS), it may be acceptable for the University to pay for the travel expenses of the spouse of a foreign official who has been invited to speak on campus, consistent with the University's policies for pay and travel expenses of spouses and speakers who are not considered foreign officials.
Anti-bribery laws and this policy do not prohibit the open and transparent giving of small tokens of gratitude to anyone, or the incurring of bona fide hospitality business expenses when consistent with federal, state and local laws and regulations and other University policies. However, keep in mind that the FCPA does not contain a minimum threshold amount for corrupt gifts or payments. What might be considered a modest payment in the United States could be a more significant amount in a foreign country. In any case, small gifts in the following situations are unlikely to be considered violations of the FCPA when there is no intent to improperly influence a foreign official:
- Giving hospitality gifts that are modest and reasonable, both in isolation and in the context of other hospitality offered to others in a similar situation;
- Presenting a small token of esteem or gratitude to display respect consistent with reasonable business practice;
- Extending normal courtesies as long as the expenses are nominal and reasonable;
- Any such small gift is given openly and transparently and properly approved and recorded;
- The expenses are not within any of the categories of prohibited gifts and entertainment above; and;
- The expenses are otherwise permissible under all applicable U.S. and foreign laws and regulations.
Non-University Activities and Financial Interests
All academic staff, including faculty, academic professionals and postdoctoral associates, are reminded of their obligation under State law and University policy to report and obtain approval for their non-University activities and financial interests each year, including those involving foreign entities or institutions. For more information on this obligation, visit the Office of the Vice President for Research website.
University policy also requires Civil Service employees to disclose activities that may present a potential conflict with their University roles and responsibilities. This is outlined in Rule 16.01 of the Policy and Rules for Civil Service Staff. For more information, contact your supervisor, unit head, or staff Human Resources office, or visit the Office of the Vice President for Research website.
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