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Illicit Affairs?

If you do business overseas, be certain your "administrative fees" aren't really illegal bribes.

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This story appears in the September 2004 issue of Entrepreneur. Subscribe »

Suppose you've decided to move part of your business overseas. You want to open a manufacturing plant in Southeast Asia, but you need a permit from the local government. A government agent there offers to get you the permit within a week-and, by the way, his commission will be $1,000.

Watch your step. In many countries, kickbacks and bribes have long been an expected cost of doing business. But the Foreign Corrupt Practice Act (FCPA), enacted by Congress in 1977, prohibits bribery of officials in other countries. It's illegal to make payments, promises or offers of anything of value to foreign officials to obtain or retain business, or to get an improper advantage. It's also illegal to make such payments to a third party (say, a government official's brother), knowing he's just an intermediary.

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