Glossary term
Extortion
Subject: Financial Crime, Bribery and Corruption
Also known as: Blackmail, Shakedown
Extortion is obtaining money, property or a favour from someone by threat, whether of violence, damage, exposure or the misuse of official power, so that the payer has no real choice.
Explanation
The test is coercion. Bribery is an improper exchange both sides agree to; extortion is one side forcing the other. A public official who holds back a permit until she is paid, a gang that demands protection money from shopkeepers, and a person who threatens to leak embarrassing facts unless paid are all extorting. The line between the two can blur, because a person who pays an official to get an ordinary service they are entitled to is often treated as a victim, not a briber. Laws differ on whether the payer commits an offence. Anti-corruption policies usually cover the point by allowing a payment only when someone's safety is at immediate risk, and requiring it to be reported at once. Without a written rule, a driver held at gunpoint has to guess whether paying breaks company policy.
Example
A site manager for a construction contractor is stopped at a road checkpoint. Armed men say the lorry carrying machinery will not pass unless 500 is paid on the spot, and they threaten the driver. The driver pays to get out safely and calls the manager. The company records the payment, reports it to compliance within a day, and reviews the route so the same threat is less likely to recur.
Not to be confused with
- Bribery
- Bribery is a voluntary improper exchange between two willing parties. Extortion is a payment forced out of someone under threat.