Corruption through bribery and facilitation payments constitutes a moral, compliance and reputational risk, which bodies operating in the jewellery and gemstone sectors are expected to manage. The risks associated with corruption are mitigated by instituting stringent Know Your Counterparty (KYC) procedures.
Bribery, a form of corruption, occurs when one person offers an incentive, which can be financial payments or material (such as gifts, holidays, schooling, entertaining), to another individual in order to obtain a business advantage. A bribery conviction could lead to the loss of an individual’s career or even a prison sentence.
Facilitation payments are payments made to expedite an administrative process to which the payer is legally entitled. These are a specific form of bribery, as they are payments made to a person in a position of power in exchange for speeding up a service, thus obtaining a business advantage. Although facilitation payments might seem less serious than other types of bribery because the payer is legally entitled to the service even without the payment, they still create an unfair advantage over other businesses. For this reason, they are considered illegal and punished by law in most countries.
A business should be able to demonstrate that it understands the law. This means that there should be someone either on staff or whom company can engage, or retain, who is responsible for knowing the legislation and regulation in the country of operation that applies to the business, and who will make sure the company is aware of how to be compliant. They should also be responsible for reviewing relevant policies and procedures every year to ensure the company continues to uphold current changes to relevant laws.