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...this situation would be a violation? See the Multimedia activity on Ethics in International Business. Then read the case study about Geletx and Jed’s concerns about the office in Lima, Peru. Research the Foreign Corrupt Practices Act (FCPA) and then discuss whether this situation would be a violation of FCPA. What do you think that Jed should do?
In the Lima, Peru, office, Jed, in reviewing financial records, discovered that the commissions expense for the branch is unusually high. Â*Geletex pays its salespeople commissions for each commercial customer they recruit for cellular or long-distance services. Â*Jed knows from experience that some companies pay unusually high sales commissions to disguise the fact that salespeople are paying kickbacks in exchange for contracts. Â*In the United States, such payments would be commercial bribery and a violation of Geletex’s code of ethics. Â*When Jed confronted the Lima, Peru, district manager and questioned him about the high commissions, he responded, “Look, things are different down here. Â*We’ve got a job to do. Â*If the company wants results, we’ve got to get things moving any way we can.â€
Does this office violate the FCPA? Â*Support your answer.
In the Lima, Peru, office, Jed, in reviewing financial records, discovered that the commissions expense for the branch is unusually high. Â*Geletex pays its salespeople commissions for each commercial customer they recruit for cellular or long-distance services. Â*Jed knows from experience that some companies pay unusually high sales commissions to disguise the fact that salespeople are paying kickbacks in exchange for contracts. Â*In the United States, such payments would be commercial bribery and a violation of Geletex’s code of ethics. Â*When Jed confronted the Lima, Peru, district manager and questioned him about the high commissions, he responded, “Look, things are different down here. Â*We’ve got a job to do. Â*If the company wants results, we’ve got to get things moving any way we can.â€
Does this office violate the FCPA? Â*Support your answer.