Businesses in the West Midlands have been warned not to splash out and end up in deep water with over-generous Christmas gifts.
Elisabeth Glover, a lawyer with FBC Manby Bowdler, said businesses must ensure they don’t breach rules under the Bribery Act when they reward customers or receive gifts in the annual round of festive giving.
The corporate specialist, a member of the firm’s Regulatory and Business Crime team, said although Christmas gifts and hospitality are not banned, the Bribery Act ushered in a stricter anti-corruption regime when it came into force several years ago.
“If you’re worried there are too many bottles of wine bearing a Happy Christmas message from your suppliers, it’s worth checking out the facts and making sure staff know the right and wrong way to go about corporate gifting.
“The Bribery Act simplified and consolidated existing law on corruption and created a new crime of failing to prevent bribery. When it became law, many commentators thought it might end all corporate hospitality.
“It wasn’t the case but any gifts must be reasonable and proportionate. So companies who splash out and are over-generous in their gifting could find themselves breaking the rules and getting both themselves and the recipient into deep water,” explained Elisabeth.
In simple terms, bribery is defined as giving or offering a person a financial or other advantage with the intention of inducing them to act improperly. It is also a crime to ask for or to receive an inducement in return for acting improperly.
Elisabeth’s advice is to have a clear threshold that’s appropriate to the sector you’re operating in, whether giving or receiving, when it comes to gifts or any form of hospitality.
“Then, if anything offered has a value beyond that, employees must obtain permission. It’s also sensible to make sure everything, however small, is logged in a central register,” she said.
“As well as looking at the price ticket on gifts or hospitality, companies also need to demonstrate that they are doing it with the right intentions. A gift given at Christmas-time is less likely to be problematic than something offered during contract negotiations or when an extra invoice has been submitted.”
Similarly, hospitality that doesn’t involve any opportunity for business development on the part of the giver is likely to raise questions.
Elisabeth added: “Entertaining your customers at a Christmas party, or providing a modest bottle of wine, is unlikely to cause problems.
“But the more valuable the gift or hospitality offered, the more risk that it might be considered excessive. In assessing whether a gift is appropriate, it can be useful to consider how the gift might look to someone completely unconnected with the business or the individuals involved, which is why it is helpful to make sure that your process for corporate hospitality and gift giving is transparent and open.
“Preventing bribery is important for any business, whatever their size, and every company must demonstrate they are taking it seriously. That includes undertaking risk assessments, making sure staff know the procedure, and setting everything out in writing.”
Since the introduction of the Bribery Act, the Serious Fraud Office has shown a tough attitude to enforcement and seeking out corruption.
In one recent high profile case, construction and professional services company Sweett Group PLC was ordered to pay £2.25 million as a result of a conviction arising from a failure to prevent bribery taking place. A subsidiary company in the United Arab Emirates had made corrupt payments to an individual with the intention of influencing the awarding of a building contract in Abu Dhabi.
For more information go to www.justice.gov.uk/guidance/bribery.htm or contact Elisabeth on firstname.lastname@example.org.