Case study – Evaluate the situation

The following scenarios allow you to test and deepen your understanding of the issue. Try to evaluate the various fictional situations and weigh up their consequences. Media coverage of corruption cases may also help you to identify the risks involved.

Initial situation

Your company is willing to strengthen its presence in Country X. To this end, management has decided to set up a subsidiary there. Your research indicates that the process of setting up a company in Country X is very complicated and can take more than a year.

Possible scenarios

(1) Your goal for the subsidiary is to begin operations as soon as possible. According to reports, other foreign companies have successfully been entered into the register of companies within a few weeks, without meeting all the necessary requirements, in return for a payment of approximately 100,000 USD to a certain government agency. You direct your project manager to make a similar offer to this agency.

(2) Would the legal situation be judged differently if it was not money being offered to the government agency, but a holiday by the sea for the responsible civil servant's family or education in Switzerland for his or her child?

(3) What if it was not your company offering money, but it was being requested by the government agency?

(4) Would the legal situation be judged differently if, rather than your project manager contacting the government agency, he or she authorised a local legal representative to 'manage' the registration of your company within a few weeks in return for 100,000 USD?

(5) Would the legal situation be judged differently if you did not yet want to establish a subsidiary in Country X, but in anticipation of a potential future need, you asked your local representative to offer an expensive gift to the head of the government agency each year?

(6) For almost a year, your company has undertaken all the necessary legal steps to have the subsidiary registered in Country X. All that remains is the certification of the required documents and the entry into the register of companies, both simple formalities that are particularly time-consuming in Country X. The responsible authority is faced with an overwhelming workload, and a delay of several more weeks is expected. To speed the process up, you send them 2,000 USD.

(7) Would the legal situation be judged differently if the registration were overdue even according to local custom, with only the affixing of a stamp still required, and you were to send 100 USD to the responsible public official so that he or she would finally handle the matter?

(8) In the meantime, your subsidiary in Country X has been registered and is now operational. It participates in the bidding on a major public procurement by the local authorities of the capital city. Receiving such a large order so soon after establishment would represent a significant success for your subsidiary. The subsidiary attempts to influence the decision to award the bid in its favour by paying 20,000 USD to a high-ranking official in the city administration. This action is brought to light. In response to questions from the media, company headquarters in Switzerland states that all parts of your company follow a code of conduct declaring that 'all forms of corruption are unacceptable'. If the subsidiary in Country X has nevertheless offered a bribe, this has been done without the knowledge or instruction of headquarters. The Swiss parent company therefore maintains that it cannot be accused of having acted unlawfully. Is this reasoning sufficient?

(9) Would the legal situation be judged differently if your subsidiary in Country X had not bribed an official of the city’s government, but rather the purchasing agent of a company in the private sector?

(10) Your subsidiary in Country X has participated in a proper way in the public tender procedure mentioned above, and its offer fared well among the others. Nevertheless, the city government chooses a less favourable offer from a company in Country Y. In documents that were leaked to you, it emerges that the bid was accepted as a result of bribery by your competitor.

Specialist staff
Last modification 17.04.2020

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