Grease money is money that is paid to an official to facilitate the rapid processing of bureaucratic paperwork. Such a payment is known as a grease or facilitating payment, and the legality of such payments varies, depending on the laws that govern the activities of the official and the person or company offering the payment. Some people consider these payments to be a form of bribery, since they involve offering money to a public official with an expectation of a result, while others argue that they are only used to expedite a task that will be performed anyway, whether or not funds are offered. As such, it is simply a cost of doing business in some parts of the world.
As a general rule, grease money is offered to an official to speed the process of what is known as a “nondiscretionary task.” In other words, the task will be performed eventually, because it is part of the official's job description, but the process could be dragged out over a period of weeks or even months. The payment is offered to rush the process through.
Grease payments are most common in the developing world, where public officials are often paid minimal salaries, forcing them to rely on this money to make a living. In a classic example, someone who wants a travel visa might offer a sum higher than the typical visa application fee to rush the application through, ensuring that it will be ready in time for the trip. Such payments are also used to get things through customs and for a variety of other bureaucratic tasks.
In some countries, companies are specifically banned from offering grease money, whether at home or overseas. In other regions, these payments are considered acceptable, and they may even be tax deductible, as a business expense. Taking this action can be a very slippery slope, however, and it is easy to cross the line into bribery, given the nature of such payments.
Opponents of grease money argue that it promotes unfair competition, as people and companies without excess funds cannot offer payments, and they may find themselves unable to accomplish basic bureaucratic tasks in some regions of the world as a result. Such payments also promote questionable business practices, making it easier for unscrupulous individuals to cross the line into more dodgy dealings. Demands for money can also ultimately hurt a country by driving off foreign investors who frown on such practices.
