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Governance Authority
Category: Anti-Bribery and Corruption

Grease Payment

Also known as: Facilitation Payment, Facilitating Payment
Simply put

A grease payment is a small, unofficial payment made to a low-level government official to speed up or secure a routine service that the official is already supposed to perform, such as processing paperwork or expediting an administrative step. It aims to accelerate a non-discretionary action rather than to obtain a result the payer would not otherwise be entitled to. Whether such payments are permitted depends on the applicable legal regime and jurisdiction.

Formal definition

A grease payment (also called a facilitation or facilitating payment) is an unofficial payment made to a government employee or minor functionary to secure or expedite the performance of a routine, non-discretionary government action to which the payer is otherwise entitled. It is typically distinguished from a bribe by the nature of the action sought: a grease payment expedites a routine, non-discretionary process, whereas a bribe seeks to influence a discretionary decision or obtain improper business advantage. The legal treatment of grease payments varies significantly by jurisdiction and by the specific anti-corruption regime that applies; some frameworks may treat certain facilitation payments differently from other corrupt payments, while others prohibit them, and cross-border activity may implicate multiple regimes at once. This entry is educational and not legal, audit, or compliance advice; whether a particular payment is lawful depends on the facts, the applicable statutes, and professional judgment.

Why it matters

Grease payments sit at a difficult boundary in anti-bribery and corruption programs because their legal treatment is inconsistent across jurisdictions and regimes. A payment that one framework may treat differently from an outright bribe can be strictly prohibited under another, and cross-border operations frequently implicate more than one anti-corruption regime at once. For organizations operating internationally, the risk is that a payment characterized locally as a routine facilitation may nonetheless expose the entity and its personnel to liability under the anti-corruption laws of another jurisdiction to which the organization is subject. Because of this variation, many organizations adopt policies that are more restrictive than the minimum any single legal regime might permit.

The distinction between a grease payment and a bribe turns on the nature of the action sought rather than the size of the payment. A grease payment is generally described as expediting a routine, non-discretionary government action to which the payer is already entitled, whereas a bribe seeks to influence a discretionary decision or to obtain an improper advantage. In practice this line can be difficult to draw, and a payment initially framed as facilitation can, on the facts, function as a bribe. Misclassifying a payment can create compliance exposure, undermine the integrity of financial records, and complicate an organization's ability to demonstrate a credible anti-corruption program.

For governance and compliance leaders, grease payments matter because they concentrate several enduring risks: inconsistent cross-jurisdictional rules, judgment-dependent characterization, and the potential for small, poorly documented transactions to escalate into significant enforcement and reputational consequences. Treating these payments as a settled or low-priority category can leave gaps in controls, particularly where local business practice normalizes them. This entry is educational and not legal, audit, or compliance advice; whether a particular payment is lawful depends on the facts, the applicable statutes, and professional judgment.

Who it's relevant to

Chief Compliance Officers
Compliance leaders are typically responsible for designing anti-bribery and corruption policies that address facilitation payments, including whether the organization permits them at all. Because legal treatment varies by jurisdiction and regime, compliance functions generally set policies that account for the most restrictive applicable rules and provide guidance on how to distinguish a routine facilitation from a bribe.
General Counsel and Legal Teams
Legal advisers assess whether a particular payment is lawful under the applicable statutes, a determination that depends on the facts, the jurisdiction, and the specific anti-corruption regime. They are often the escalation point when the characterization of a payment is uncertain or when cross-border activity implicates multiple regimes at once.
Internal Audit and Assurance Functions
Assurance functions may test the operating effectiveness of controls intended to identify, document, and escalate potential facilitation payments. Their focus is generally on whether policies are being applied consistently and whether transactions are recorded accurately, rather than on making the underlying legal determination.
Boards and Audit or Risk Committees
The board and its relevant committees typically hold oversight responsibility for the organization's anti-corruption program and its risk exposure, without managing individual transactions. Given the judgment-dependent and cross-jurisdictional nature of grease payments, boards generally seek assurance that management has established clear policies and adequate controls in this area.
Managers in International or Field Operations
Personnel who interact with government processes across jurisdictions are often the first to encounter requests that may be framed as facilitation payments. They generally need clear guidance on the organization's policy and a defined route for escalating uncertain situations, since local practice may normalize payments that other applicable regimes restrict or prohibit.

Inside Grease Payment

Facilitation Payment
A grease payment is commonly understood as a small, unofficial payment made to a low-level government official to expedite or secure the performance of a routine, non-discretionary governmental action the payer is already legally entitled to receive, such as processing a permit, clearing goods through customs, or providing utility service.
Routine Governmental Action
The concept typically hinges on the action being ministerial and non-discretionary in nature. Where an official is being paid to exercise judgment, award business, or grant something the payer is not otherwise entitled to, the payment generally falls outside any facilitation-payment concept and is treated as bribery.
Divergent Legal Treatment
Whether such payments are lawful depends entirely on jurisdiction and the applicable statute. Some anti-bribery regimes have historically recognized a narrow facilitation-payment exception, while others prohibit these payments outright with no exception. Practitioners should treat the legality as jurisdiction- and fact-specific rather than assuming a universal rule.
Accounting and Records Implications
Even where a payment might fall within a narrow exception under one law, it can still create exposure under books-and-records and internal-controls provisions, under the laws of other jurisdictions where the entity operates, and under the entity's own policies. Accurate recording of any such payment is a recurring compliance concern.
Compliance Program Interaction
Grease payments are a defined subject within many anti-bribery and corruption (ABC) compliance programs, which typically address whether the organization permits, restricts, or prohibits them, how they must be documented and approved, and how related third-party and agent conduct is monitored.

Common questions

Answers to the questions practitioners most commonly ask about Grease Payment.

Is a grease payment the same thing as a bribe?
Not in a technical sense, though the distinction is narrow and often misunderstood. A grease payment (also called a facilitation payment) is typically characterized as a small payment made to a low-level official to expedite or secure the performance of a routine, non-discretionary governmental action the payer is already entitled to receive, such as processing a permit or clearing goods through customs. A bribe, by contrast, is generally understood as a payment intended to obtain or retain business or to secure an improper advantage by influencing a discretionary decision. However, this conceptual distinction does not translate into consistent legal treatment: many jurisdictions draw no such line and treat facilitation payments as prohibited bribery. Whether a given payment falls into either category depends on the facts, the applicable law, and the nature of the official act. This entry is educational and not legal advice.
If facilitation payments are permitted under one anti-corruption law, are they legal everywhere?
No. This is a common and consequential misconception. The fact that a particular statute may provide a limited exception for facilitation payments does not make such payments lawful across jurisdictions. Anti-corruption regimes vary significantly by jurisdiction, and some prohibit facilitation payments outright with no exception. A payment permitted under one country's law may still violate the anti-bribery law of another country with jurisdiction over the entity or individual, as well as the local law of the country where the payment is made. Multinational organizations therefore generally cannot rely on a single law's treatment of grease payments. Specific applicability depends on the jurisdictions involved and requires professional legal advice.
Who within an organization should own the policy decision on whether to permit facilitation payments?
Setting the organization's stance on facilitation payments is generally treated as a governance and policy matter rather than a purely operational one. In many organizations, the board or a relevant committee provides oversight of the anti-corruption program and approves the risk appetite that informs whether facilitation payments are prohibited outright or permitted under narrow, controlled circumstances. Management, typically the compliance function together with legal, usually owns the design, implementation, and enforcement of the resulting policy. The allocation of these responsibilities depends on the entity's structure and governance framework. This entry is educational and not compliance advice.
How might a compliance program address facilitation payment risk in practice?
Approaches vary by organization and risk profile, but compliance programs commonly address this risk through a clearly stated policy, targeted training for employees and intermediaries operating in higher-risk contexts, and defined escalation and approval channels. Because facilitation payments often arise at points of interaction with officials, such as customs, licensing, or inspections, controls may focus on those touchpoints. Accurate recording of any payments in books and records is generally emphasized, as is guidance for personnel facing demands, including how to respond to situations involving duress. The design of specific controls should reflect the organization's jurisdictions, sectors, and assessed risk, and should be developed with professional advice.
What is the distinction between a facilitation payment and a payment made under duress or extortion?
The distinction generally turns on voluntariness and the presence of a genuine threat. A facilitation payment is typically made to speed a routine action to which the payer is entitled. A payment made under duress or extortion, for example, in response to a credible threat to health, safety, or liberty, is often analyzed differently and may be treated more leniently under some frameworks, particularly where the safety of personnel is at stake. The precise legal treatment depends on the applicable law and the specific facts. Organizations often ask that such situations be documented and reported promptly. This entry describes the concepts and is not legal advice.
How should a facilitation payment be handled in an organization's books and records?
As a general matter, accurate and transparent recording of any payment is important regardless of how the payment is characterized, and many anti-corruption regimes impose books-and-records and internal accounting control requirements that apply independently of whether a payment is treated as a permitted facilitation payment. Mischaracterizing or concealing a payment can create exposure separate from the underlying payment itself. The specific recording and disclosure obligations depend on the applicable law, accounting framework, and the entity's controls, and organizations generally address these through defined documentation and approval processes with input from legal and finance. This entry is educational and not legal, audit, or accounting advice.

Common misconceptions

A grease payment is always legal because it is small and only speeds up something the payer is already owed.
Legality depends on the applicable law and the specific facts. Some regimes prohibit facilitation payments entirely, and a payment lawful under one jurisdiction's statute may be unlawful under another jurisdiction's law or under the entity's own policy. Size and entitlement alone do not determine legality.
A grease payment and a bribe are essentially the same thing.
The concepts are generally distinguished by the nature of the action sought. Facilitation payments typically relate to routine, non-discretionary acts the payer is already entitled to, whereas bribery generally involves influencing discretionary decisions or obtaining an improper advantage. That said, the line is fact-dependent, and payments that influence discretion are treated as bribery.
If a facilitation payment is permitted under an applicable exception, no further compliance obligation applies.
Even a payment that may fall within a narrow exception can raise separate exposure under books-and-records and internal-controls requirements, under the laws of other jurisdictions, and under organizational policy. Proper documentation, approval, and recording obligations typically remain.

Best practices

Confirm the legal position for each relevant jurisdiction before assuming any facilitation-payment exception exists, and treat the analysis as fact- and location-specific rather than applying a single global rule.
Establish a clear organizational policy stating whether grease payments are prohibited, restricted, or permitted, recognizing that many organizations adopt an outright prohibition to reduce cross-border and books-and-records exposure.
Require that any payment potentially falling within the concept be accurately recorded in the books and records, with defined approval and documentation steps rather than informal or off-record handling.
Extend the policy and monitoring to third parties, agents, and intermediaries, since payments made on the organization's behalf can create the same exposure as direct payments.
Train employees operating in higher-risk functions such as customs, permitting, and logistics to recognize when a request concerns a routine ministerial act versus a discretionary decision, and to escalate uncertain situations to compliance or legal.
Consult qualified legal and compliance advisors for specific transactions, and treat internal guidance as educational rather than a substitute for legal, audit, or compliance advice.