International Farm Equipment Co.

Authors: Lane, Henry W.; Wesley, David T.A.
Source: Richard Ivey School of Business
Year: 2011
Company Name: International Farm Equipment Co.
Number of pages: 3

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Abstract:

In 1995, the United Nations began to ease sanctions on Iraq in what was known as the “Oil for Food” program. One of the first companies to return to Iraq under the UN program was US-based International Farm Equipment Co. IFE had been an important supplier of agricultural equipment to Iraq until the Gulf War in 1990. Shortly after it established its Iraq office, the Iraqi Ministry of Agriculture demanded a direct payment of 10 percent of all future contracts. Several other companies had agreed to make the payments, including at least one prominent IFE competitor. The payments would be classified as “post-sale commissions” and would be conducted through a third party agent working on IFE's behalf. The case is used in conjunction with Asis Electronics, product #9B11M057, to introduce the Foreign Corrupt Practices Act (FCPA) and discuss its impact on corporations and managers.