Reference no: EM13918447

Consider the following scenarios:

Scenario 1: to assist the sales of your products in a particular foreign market, it is suggested that you pay a 10% commission to a "go-between" who has access to high-ranking government officials in that market. You suspect, but do not know for certain, that the go-between will split the commission with the government officials who decide which goods to buy. Should you do it? Does it make a difference if your competitors routinely pay such commissions?

Scenario 2: You have a long-standing client in a country that imposes foreign exchange controls. The client asks you to pad your invoices by 25%. For example, you would ship the client $100,000 worth of goods but would invoice the client for $125,000. On the basis of your invoice, the client would obtain the $125,000 from the country's central bank. The client would then pay you $100,000 and have you put the remaining $25,000 in a Swiss bank account in the client's name. Should you do it? Would it make a difference if your client is a member of a politically unpopular minority and might have to flee the country at a moment's notice?