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

The following are the different types of bribes highlighted by the case study`

• Lobbying officials of higher rank, handing pamphlets or souvenirs without authorization.
• Payments to engage in black market.
• Offering foreign business  trips
• Direct cash payments from MNCs

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

The different types of corruption can either classified as lubrication, extortion or subornation. For instance, the lobbying of official in lower ranks with small gifts can be classified as lubrication. This is mostly in countries where such offerings are not prohibited by law. Subornation on the other hand involves giving large sums of money to an official to entice him commit illegal acts. Extortion refers to money made under duress. In this case, the money paid by businesses to improve their business can be classified as extortion.

3. Which of the payments, favors, or bribes are illegal under the Foreign Corrupt Practices Act (FCPA)?

The following is the list of payments, favors or bribes that are illegal under FCPA

• Utilization of black market to attain illegal documents
• Gifts unrelated to the business
• Luxury vacations and foreign trips given to officials
• Kickbacks

4. Assuming that the FCPA did not exist, what is the ethical response to each of the payments, favors, or bribes you have identified? Read the section titled Ethical and Socially Responsible Decisions in Chapter 5 as a guide to assist you in your decision.

Even if the FCPA never existed, it is the sole responsibility of the companies and business enterprises to ensure that they maintain high ethical standards as the carry out their daily activities. High ethical standards should be maintained both locally and at international level. They should always seek advice from the recognized institutions of the world and ensure that whatever  they do is always right and worth to be disclosed to the public.

5. In your view, which 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.

Expenses that could be in violation include:

• Sony cameras
• Luxury outfits
• Vacations
• Funding of foreign trips

Legitimate expenses

• Corporate jet for the business trip
• Apartment in shanghai for business purpose

6. Discuss the legal/ethical issues raised by the comments by the retired Foreign Service agent and the consultant.

The retired Foreign Service Agent brings up how he could intentionally subvert the intent of the FCPA to ensure that the US investors and exporters do not get unnecessary losses from companies and agencies from other countries and agencies.  This is reaffirmed by the consultant, who explains that corruption is huge systemic. The obvious legal or ethical issue arising from this issue is the fact that the service agent intentionally broke the law. It is however prudent to note that he broke the law with good intentions thus creating an ethical dilemma.

7. List alternatives to paying bribes in international markets and discuss the plusses and minuses of each.

Company can bow out of the contract/company.

• Merit- The company can avoid litigation due to bribery
• Demerit- Can lose out potential profits and consumers

Use ‘’personality’’ to convince officials in a way that one can compete

• Merit- completely legal under any of the acts
• Demerit- most likely will not work and if it works it will take long to complete

Entertain officials with official company events

• Merit- can still entertain officials with gifts and other favours

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