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Distinctions between Kickbacks and Commercial Bribery

2018-12-12 15:15 Wednesday

Commercial bribery and kickbacks are similar in principle, therefore non-legal professionals often confuse the two terms. However, there are significant and important differences between kickbacks and commercial bribery.

Commercial Bribery

Concept of "Commercial Bribery" and "Kickbacks"

Commercial bribery is anti-competitive behavior that involves company operators secretly giving money or other benefits to the counterparty or relevant personnel who can influence the transaction in order to obtain commercial opportunities and exclude competitors. Commercial bribery is a type of bribery, whose subject is the operator or employee of a company, with the purpose of exploiting opportunities.

Kickback is the amount that an enterprise operator extracts from the payment for goods in a certain proportion and returns to the buyer in the sales process. According to whether it is included in the account book, kickbacks can be divided into those shown explicitly in the account book and the off-the-book kickbacks (not truthfully included in the financial account book).

The Difference between Commercial Bribery and Kickback

1. Kickbacks are only one form of commercial bribery

Kickbacks are a common form of commercial bribery. Commercial bribery can take many other forms, for example, when cash, sponsorship feed, securities, luxury goods and housing estates are directly given to the counterparty.

2. Not all kickbacks are commercial bribes

According to Anti-Unfair Competition Law, off-the-book kickbacks are illegal. Such kickbacks can be classified as commercial bribery, which is a criminal behavior. In contrast, kickbacks included in the regular financial accounts, whose evidence can be checked and confirmed, are permitted by law.

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