Christmas Gifts and the Bribery Act
Dec 7, 2011
Charlotte Lloyd LLB (Hons), Employment Law Advisor/Non Practicing Solicitor at Howarths Employment Law, discusses how the Bribery Act 2010 affects corporate gifts at Christmas
With Christmas almost here, it is likely that many businesses will be spreading festive cheer to their customers or suppliers by giving gifts or providing hospitality events, but how will these festive practices be affected by the Bribery Act 2010 which came into force in July?
The Bribery Act criminalises the paying and receiving of bribes and has far reaching implications for organisations which are based in, or trade from, the UK. As we approach the festive season when traditionally many companies send corporate gifts and invites, we anticipate that many business owners will now be considering what is acceptable and if their intended tokens of goodwill and cheer might fall foul of the Bribery Act.
The Bribery Act guidelines suggest that gifts, hospitality invites or other similar actions will generally be acceptable if a company can show that:
- It is providing genuine business hospitality/promotional gifts
- Its activities are ‘proportionate and reasonable’
- Its gifts, or hospitality, are not intended to/do not encourage any person to perform improperly
Currently however, in relation to the above points there is no definitive guidance to assist companies in determining whether a particular gift or act of hospitality will fall foul of the Bribery Act and it seems that it will be up to each business to decide what the guidelines mean for them.
Although there is a lack of definitive guidance it seems clear that the giving and receiving of gifts within the ordinary course of business will generally be acceptable provided such gifts do not lead to a sense of obligation or affect judgement on the part of the recipient. The giving and receiving of promotional items of nominal value is also likely to be acceptable. In light of such, it is likely that when giving the following gifts, the following imputations would be made:
- Gifting a bottle of champagne to the business accountant- this gift is likely to be considered permissible as a gift of moderate value, received to celebrate achievements
- Gifting a ticket for the 2012 London Olympics to the MD of a potential client, but only in return for the MD’s agreement to do business in the future- this gift is not likely to be considered permissible as it is being made for commercial advantage
- Gifting an overnight stay in a 5 star hotel for the FD of a retained client- this gift may be considered acceptable providing that the gift is reasonable and proportionate and not intended to put the FD under any pressure to continue the business relationship
- Gifting £500 to the County Court clerk in return for all of the company’s CCJ’s to be deleted from the system- this gift will definitely be considered to be in contravention of the Bribery Act.
The best way for a company to avoid falling foul of the Bribery Act is to ensure that it has proper policies and procedures in place to deal with bribery and corruption. If you are thinking about doing this in your business for the first time, then we would suggest that you consider the following:
- Review your employment contracts, policies and procedures to ensure that they clearly define how the giving and receiving of corporate gifts should be handled and what the consequences are for not abiding by the company rules
- Carry out a risk assessment to identify any areas where the potential for bribery is greatest within your business, for example, sales, and put an appropriate control measure in place
- Introduce a policy for the prevention of bribery and corruption and train all employees, including directors and managers, on the content of such
- Introduce a procedure for recording all gifts both gifted and received by the company
If you would like to discuss the potential implications which the Bribery Act could have upon your business in any further detail, or if you would like to discuss the possibility of having a tailormade bribery and corruption policy prepared for your business, then please contact Howarths Employment Law on 01274 864999.
