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Avoiding Bribery and Corruption: A Gift Giving Guide

Gift-giving is common in many workplaces, especially during the holiday season. While giving your coworker or customer a present can help to build business relationships, not all forms of gift-giving happen with such straightforward intent. The potential for improper gift-giving, such as bribery or misuse of corporate funds, means company controls and policies surrounding gift-giving need to be thoughtfully designed, and consistently enforced and monitored.

Legitimate vs. improper gift giving

For gift giving to be legitimate and honest, specific corporate funding and legal rules should be followed, including:

  • Gifts should be given to show esteem or gratitude for a business relationship only.
  • Gifts should be considered ‘modest’ and not ‘lavish’ in cost
  • Expenditures should be open and transparent while being accurately recorded for corporate accounting
  • Giving gifts should align with the local country law in which the company office is based. Some countries may have different rules and regulations surrounding gift-giving in the workplace
  • Under U.K. laws, such as the U.K. Legal Bribery Act, gifts must be given with honest intent. They must also be ‘reasonable and proportionate about the situation’

Examples of workplace gift-giving that may be considered to have corrupt intent:

  • Gifting someone a present as a form of bribery in exchange for a perk, e.g., special treatment in the workplace or a job promotion
  • Influencing the recipient with gifts to go against their duty and workplace obligations, such as giving them presents in return for confidential company information
  • Significant and overly expensive gifts that do not compare in size to the situation
  • Failure to record the cost of the gift, or the gift itself, in corporate accounting books (or intentionally hiding the price spent on a gift)
  • Gifts or expenses given to family members of executive members or government officials, such as tuition fees, paying bills, or gifting members partners on special occasions
  • Examples of a violation: £10,000 spent on a meal for a government official or a trip to another county, which included primarily tourism or sightseeing rather than a work-related business

Gifts and hospitality must be given in modesty, appropriate with the situation and categorized accordingly. Gifts labeled as “nominal or modest gifts” should not be intended to influence the recipient in any way. Nominal gifts can include transportation expenses, free company promotional items or coffee/snacks. One-off gifts categorized as a little higher as “modest” can consist of onsite meals (with a set budget per person) as a token of appreciation, wedding presents, or picking up a bar tab. The larger and more extravagant a gift becomes, the more likely it may be used in a bribery case or to influence a person(s).

Mitigating risks and enforcing policies

Companies should implement safe harbors into their company policies and code of conduct to avoid financial penalties or potential court cases. Those safe harbors should consist of what counts as appropriate gift giving, company expenses, travel and rules against bribery and corruption. In addition, thresholds for spending should be included and reviewed regularly by senior staff. Sources that can help businesses write these policies, and define necessary terms, include the FCPA Opinion Release Procedure, DOJ and SEC FCPA Guidance (updated 2020) or DOJ Evaluation of Corporate Compliance Programs (2020).

However, to ensure the created policies are effective, businesses should also have a communication program where company policies are easy to access for remote or hybrid workers – such as an online portal. Employees should also have web access to a space where they can disclose gifts, given or received, to compliance, HR or legal teams for approval. Systems must also be measured and subject to audits to monitor the number of receipts, expenses, travel details, approval documentation and disclosures.

In addition, global companies should consider that gift-giving policies may need to be adapted to align with different countries’ cultures. Certain cultures and regions commonly use gift-giving as a part of everyday work to form business relationships and social bonds. Therefore, adaptations may need to be made in relation to social norms for each country.

To learn more about how NAVEX services can help your company to manage gift giving effectively, bribery and corruption, discover the NAVEX RiskRate solution or download the COI: Gift Giving On-Demand webinar.

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