Ethical Considerations

You have been negotiating with a representative of a government in Africa to sell products to them for a new state building project in their country. The negotiations are finalized during your trip to his offices in Africa. Alter easily negotiating a fixed price and delivery, he “suggests” that you prepare a price quotation on a “pro forma invoice”—at double the negotiated price. His government will pay the full amount shown on the invoice through a foreign bank, and your firm will pay him the difference as a “commission” in U.S. dollars deposited to his personal bank account in New York. He convincingly argues that this practice is customary in his country. The temptation for you is great; the deal would be a profitable one. Should you make the payment? Does it matter that it is customary in his country? Do you think it is lawful under American law? Does it matter that this is taking place in Africa, far from the United States? Is there a “victim” in this case? Who would be harmed? What are the economic, political, and social arguments for and against criminalizing the bribery of foreign government officials in developing countries by employees and representatives of Western companies?



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