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Give a Little This Christmas – But Only If It’s Legal!

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Give a Little This Christmas – But Only If It’s Legal!

Give a Little This Christmas – But Only If It’s Legal!
December 06
10:43 2016

lawyer-cropMany businesses like to be generous with customers and suppliers to demonstrate their gratitude at Christmas time. However, few recognise the danger of breaking new anti-bribery laws. With catering , tourism and hospitality firms at the centre of festivities, diligence, prudence and discretian are strongly advised. Catriona Munro provides an essential guide to lawful gift-giving…

Could giving a Christmas present amount to bribery?

Yes, and companies and their employees need to be equally careful about accepting such gifts. The UK Bribery Act 2010 introduced one of the most stringent anti-corruption regimes in the world. But although it outlaws the giving and receiving of bribes, ‘reasonable and proportionate’ gifts and hospitality are not prohibited.

What is the difference between a gift and a bribe?

There is no clear line in terms of value that means a gift becomes an act of corruption. Building relationships with customers and suppliers is an important part of business but operators need to consider the context of the gift and what the effect of receiving it is likely to be.

For example, when a business entertains a customer, the aim is to engender good relations and ensure the customer continues to buy its goods or services. This does not make it bribery, though, which entails some impropriety. Bribery comes in where the customer decides to buy from a particular supplier not because that supplier produces the best goods or services, but because it entertained the customer so lavishly.

Physical gifts are trickier than entertaining to classify, as there is no obvious element of relationship-building, such as, for example, where a catering supplier gets to know a restaurateur’s needs and concerns over lunch. There is no such benefit from handing a present to an individual, so most anti-bribery compliance programmes set significantly lower limits on the value of gifts than on hospitality.

How may Scottish firms hospitality and catering firms ensure they stay within the law?

Employing a robust anti-bribery compliance programme in place can allow a defence to the charge of failure to prevent bribery. General principles to follow include:

  • Ensure that the person responsible for such matters is keeping track of the cumulative value of gifts and hospitality offered to customers.
  • Always be careful with the timing of any hospitality or gifts: how close in time are these being given to an award of a contract?
  • When it comes to receiving hospitality and gifts, operators also need to have their moral compasses on standby; is a company being unduly influenced to choose a supplier they wouldn’t otherwise select, perhaps through the receipt of a particular gift or experience?

So, offering customers a bottle of wine at Christmas, or inviting them to a meal is fine, as long as it is reasonable and proportionate. Nevertheless, it is worth running through a mental checklist before choosing gifts or providing hospitality, and someone within the organisation should be keeping track of the bigger picture at all times.

 Catriona Munro is a partner in the EU, Competition & Regulatory team at Maclay Murray & Spens LLP.

www.mms.co.uk

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Catering Scotland

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