One of your company's customers, Telecom Giant, is having a conference in Indonesia that they are hosting for all of their vendors/suppliers and they have asked that you send a sales representative from your company to attend.  You decide to send Grace Chu, one of your sales reps dedicated to the Telecom Giant account, who is based out of Shenzhen, China.  Your company is headquartered out of the US.

Grace arrives at the airport in Indonesia around ten o'clock at night.  As she attempts to pass through Customs & Immigration, the customs official demand a bribe in order to let her through. The amount is equivalent to US $20. Grace refuses to pay and the official asks her to stand off to the side.  She stands there for over an hour and eventually asks to see a supervisor. The supervisor also demands she pays the bribe and is becoming increasingly angry. Now almost midnight, Grace is beginning to feel unsafe in the rapidly emptying immigration hall and decides to pay the bribe.

Upon return to China, Grace submits an expense report requesting reimbursement for the payment to the customs officials.  She doesn't have a receipt for the payment, so the expense is flagged in the payment system for review. You get a call from accounts payables that they have a suspicious expense they want you to take a look at.

Your company has an anti-bribery policy forbidding facilitation payments. Human Resources in China asks that you reimburse the employee despite the policy as a matter of employee relations as $20 US actually translated into a significant amount of money to this employee given the exchange rate and the employee's pay rate.

 

Determine 1) whether or not you will reimburse the employee, 2) what the employee should have done in the situation she found herself in, 3) what sorts of internal changes you may make as a result of this issue coming to light, 4) setting aside the company policy, whether anything illegal has occurred.