Gifting nightmares before Christmas

Bribery or gifting

With the festive season in full swing, many commercial organisations exchange gifts with those they’ve done business with during the year. The Bribery Act 2010 is probably far from your mind right now, but ignoring its impact could make your New Year far from happy.

Commercial organisations which fail to comply with the Bribery Act 2010 can find themselves subject to civil or criminal sanctions, not only for any act of bribery (few surprises there perhaps) but also for the corporate offence of failure to prevent bribery. Following the below guide will help you avoid gifting nightmares this Christmas.

The basic ingredients

The gifting and hospitality policies and procedures your organisation puts in place must reflect the unique risks of bribery it faces. You are better placed than anyone to consider what is necessary and what will work.

Remember, these policies and procedures don’t just apply to those within your business with responsibility for Christmas gifting. Any officer or employee could receive a gift from any party they deal with in their employment at any time of year.

Not sure if a gift for your business partner is appropriate? Contact our Dispute Resolution team now.

Add a dash of reality

Gifts and hospitality have a necessary and legitimate role as long as they are reasonable and proportionate. Consider:

Intention

Gifts/hospitality intended to “improve the image of a commercial organisation, better to present products and services or establish cordial relations” are an important part of doing business. However, if there is an expectation that either the business relationship or a commercial decision will be influenced by the giving/receiving of a Christmas gift or hospitality, you could be in difficulties.

Timing

Christmas or not, a gift which is for/from a party to a procurement exercise or contract renewal you are involved in may not be a good idea and might lead to an inference that there was an intention to influence.

Value

Context is important: what is acceptable/normal practice in the market in which you operate? How valuable is the gift or hospitality in the context of your business relationship?

Gifts of cash are probably unwise, but the value of a gift or hospitality package can be difficult to determine. Your frontline employees may not always be best placed to make these value assessments.

Contact our Dispute Resolution team now.

Cross-jurisdiction issues

If you have business interests in different jurisdictions, the challenges are potentially greater. For example, is there any risk that you may be dealing with a state-owned enterprise?

In some cultures, an offence can be caused if gifts/hospitality are not offered or accepted. Recognising these cultural factors is important, but you must still consider reasonableness and proportionality as well as intention/timing/value.

The proof of the pudding…..

Ultimately your organisation may be judged on how it puts these policies and procedures into practice. Remember:

• Keep it simple, or even the best-intentioned employees may struggle to understand what is required of them.
• Avoid inconsistencies. If the anti-bribery policy permits gifts up to £100 but the gift policy permits gifts of up to £75, which is right?
• Don’t leave too much to subjective judgment.
• Provide appropriate training and perhaps additional training for those dealing with procurement, contract negotiation or international investment.
• Maintain a positive dialogue with your employees about what is acceptable.
• Common sense will get you a long way. A good starting point is “How would I feel if I heard about this on the news?”

If you would like any assistance in connection with your gift and hospitality policies and procedures, or any other aspect of your Bribery Act 2010 obligations,

please contact Clare Murphy on 0121 312 4785 or by email at [email protected].