Bribes may be a cost of doing business in many countries, but that doesn’t mean American companies can do it without getting into trouble back home. This week, a medical device maker based in Plymouth agreed to pay $2 million in fines for conspiring to bribe Chinese officials over an eight year period. The company, AGA Medical Corp., wanted the officials to make sure government doctors and hospitals bought its products, and that its patents were approved. The company’s emails, described in the U.S. District Court records, use all sorts of words to describe the illegal payoffs: rewards, fees, kickbacks, rebates, discounts. Under the agreement with the U.S. Department of Justice, the company will avoid prosecution if it behaves itself, and hires a special watchdog to make sure no more bribes slip through.

The case against AGA Medical grew out of the Foreign Corrupt Practices Act, a law passed in 1977 in response to revelations of widespread bribery and other corrupt activities by U.S. corporations abroad. But who’s to say what’s legal and what’s not in countries where payoffs of bureaucrats has always been the way to get things done. The Justice Department’s easy-to-understand guide to the law addresses this point: “Whether a payment was lawful under the written laws of the foreign country may be difficult to determine.”

AGA Medical wasn’t the only company cited this week for corrupt payments in China. A Florida company called Faro Technologies described its illegal payoffs as “referral fees,” but that won’t save them from paying a $1.1 million fine.

A group called Transparency International puts out a ranking every year of the world’s most and least corrupt countries. Out of the list of 179 countries, China doesn’t do as badly as one might think. It’s tied at 72 with its fellow Asian economic powerhouse, India, as well as Brazil, Peru, Mexico, Morocco and Suriname. The United States weighs in at no. 20, just ahead of Belgium but behind France. The least corrupt country? A three-way tie of Denmark, Finland and New Zealand. The most corrupt? Myanmar and Somalia, just barely behind Iraq.

This entry was posted on Thursday, June 5th, 2008 at 9:38 pm and is filed under Businesses in hot water. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.