BUSI 561 Week 2 DB Forum 1: Thread Example

Discussion Board Forum 1: International Law and the Business Community

BUSI 561 Legal Issues in Business, Discussion Board Forum 1: Thread

Thread by [Student Name]

The forum prompt and the manufacturer in the thread are composites standing in for the course's own prompt; the statute, the government guide, the research and the Scripture cited are real, and the requirements follow Liberty's public course guide for BUSI 561.

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Imagine a mid-sized American manufacturer of food-processing equipment entering a new export market. Its newly hired local agent reports that the company's first shipment has been held at customs for three weeks and that competitors' goods clear in two days because their agents pay inspectors a "processing fee" in cash. A larger contract with a state-owned dairy cooperative is also pending, and the agent hints that a consulting payment to a ministry official's cousin would help. The company's leaders ask a simple question: if this is how business is done there, must we refuse? Kubasek et al. (2016) explain that American law answers that question directly, and in this thread I argue that the law and a biblical worldview lead to the same answer, though for different reasons.

What the Law Requires

The Foreign Corrupt Practices Act (FCPA), enacted in 1977, has two parts. Under its anti-bribery provisions, an American company, its officers and agents, and any foreign company with securities listed in the United States commit a crime when they give, promise or authorize a benefit for a foreign official, whether handed over personally or passed through a third party, in order to win or keep business. Its accounting provisions require issuers to keep books and records that accurately reflect their transactions and to maintain a system of internal accounting controls (Criminal Division & Enforcement Division, 2020). The accounting provisions matter as much as the bribery ban, because a payment disguised as a consulting fee violates them even if no one can prove its purpose.

One carve-out covers small facilitating payments that speed up routine governmental action, such as processing visas or scheduling inspections, where the official has no discretion over the outcome. It also provides affirmative defenses for payments lawful under the written laws of the foreign country and for reasonable, bona fide expenditures such as travel tied to product demonstrations. Applied to our manufacturer, the consulting payment to the official's cousin is a textbook violation: something of value, routed through an intermediary, to influence a discretionary decision. The customs "fee" is closer to the facilitating payment exception, but the government's guide warns that the exception is interpreted narrowly, that the label on a payment does not control, and that many other countries' laws, along with the OECD Anti-Bribery Convention that the United States joined in implementing amendments in 1998, prohibit such payments regardless (Criminal Division & Enforcement Division, 2020).

What the Research Shows

The FCPA has been criticized since its passage. Mahaney (1981), writing in the act's early years, weighed complaints that it placed American exporters at a disadvantage against competitors from countries that tolerated and even allowed tax deductions for foreign bribes, and asked whether the act was a curse or a cure. The disadvantage argument still appears whenever enforcement is debated, including in 2025, when the executive branch paused and then narrowed its enforcement priorities. Yet the competitive picture has changed since 1981: many of the countries whose firms once deducted foreign bribes as business expenses now criminalize them under their own laws, so an American firm that pays bribes no longer simply matches its rivals' practice.

The economic evidence, however, points against bribery as a business strategy. Mauro (1995), using indices of corruption across a large sample of countries, found that corruption lowered investment and, through investment, economic growth, a result that held after he addressed the possibility that slow growth causes corruption rather than the reverse. Bribery harms the very markets an exporter hopes to grow in. The evidence at the level of individual firms is even more pointed. Fisman and Svensson (2007), studying Ugandan firms, found that a one percentage point increase in the bribery rate was associated with a reduction in firm growth of about three percentage points, roughly three times the effect of a comparable increase in taxation. Bribes are not a one-time cost of entry; they mark a firm as a payer, invite repeated demands and divert management attention from producing value.

A Biblical Worldview on Bribery

Scripture addresses bribery with unusual directness. The Teacher of Ecclesiastes observes, "Surely oppression drives the wise into madness, and a bribe corrupts the heart" (English Standard Version Bible, 2001/2016, Ecclesiastes 7:7). The verse explains why bribery is wrong, not only that it is forbidden: it corrupts the heart, the seat of judgment, so that an official who should decide by the merits decides by the money. A company that pays a ministry official to win a contract is asking that official to stop seeing clearly, and it harms the competitor whose bid deserved to win.

Proverbs adds a second observation: "The wicked accepts a bribe in secret to pervert the ways of justice" (Proverbs 17:23). Two words stand out: secret and pervert. Bribery depends on concealment, which is precisely why the FCPA's accounting provisions target false records, and its purpose is to bend a process that should be straight. A payment that must be hidden in the books is a payment the payer already knows to be wrong. For a Christian business leader, the question is not only whether a payment fits a legal exception but whether it could be made openly and recorded honestly.

Applying Both to the Manufacturer

Law and Scripture lead the manufacturer to the same plan. It should refuse the consulting arrangement outright and document the refusal. It should not pay the customs fee in cash; if the fee is a published charge for expedited service, it can be paid by check with a receipt, and if it is not, the company should accept delay, escalate through the U.S. embassy's commercial service or route shipments through a different port. It should vet its local agent, require written anti-corruption commitments, pay the agent only by documented invoice for documented services and train its staff to report requests for payments. It should also tell the dairy cooperative's management, in writing, that it competes on price, service and equipment quality and will not use intermediaries with ties to officials, which protects the company if a competitor later makes a different choice. These steps will cost time and perhaps the first contract. The research suggests they are also the path to a durable business in the market, and Scripture reminds the company's leaders that clear sight and justice are worth more than a faster customs line.

References

Criminal Division of the U.S. Department of Justice & Enforcement Division of the U.S. Securities and Exchange Commission. (2020). A resource guide to the U.S. Foreign Corrupt Practices Act (2nd ed.). https://www.justice.gov/criminal/criminal-fraud/fcpa-resource-guide

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Fisman, R., & Svensson, J. (2007). Are corruption and taxation really harmful to growth? Firm level evidence. Journal of Development Economics, 83(1), 63-75. https://doi.org/10.1016/j.jdeveco.2005.09.009

Kubasek, N. K., Browne, M. N., Herron, D. J., Dhooge, L. J., & Barkacs, L. L. (2016). Dynamic business law (Biblical worldview ed.). McGraw-Hill Education.

Mahaney, M. C. (1981). The Foreign Corrupt Practices Act: Curse or cure? American Business Law Journal, 19(1), 73-86. https://doi.org/10.1111/j.1744-1714.1981.tb01196.x

Mauro, P. (1995). Corruption and growth. The Quarterly Journal of Economics, 110(3), 681-712. https://doi.org/10.2307/2946696