With Christmas approaching and businesses preparing to exchange gifts and hospitality, many firms are questioning how far they can go without falling foul of the Bribery Act 2010.
While the Act does not ban corporate gifts outright, advisers warn that intent remains central to how gifts and hospitality are judged.
Sarah Squires, Partner at MGI Midgley Snelling LLP, says many businesses misunderstand where the risk lies.
“People often assume any corporate gift could be a problem, but the law is not aimed at stopping normal business relationships.
“A modest Christmas gift, such as a bottle of wine, is usually acceptable. The problems start when a gift is given to influence a decision or reward someone improperly.”
Firms are being urged to consider intent, value and timing before offering or accepting any gift.
“People usually focus on the price tag, but intent matters far more. If the purpose is to sway a decision, the risk is there regardless of the price.
“Expensive or lavish items naturally attract attention from regulators and gifts offered during tenders, disputes or negotiations are especially high risk,” said Sarah.
“I encourage clients to pause and consider the message a gift might send, as even small, repeated gestures can create expectations or a sense of obligation.”
Many companies now rely on internal checks to protect themselves from scrutiny.
“Most businesses apply a reasonableness test and keep a gift register. High-value items, repeated gifts to the same person, gifts linked to a pending deal or anything that lacks transparency should always be challenged.”
Sarah explained that certain roles are more exposed to bribes than others, especially in the Christmas period.
“Anyone involved in buying, selling or approving deals needs to be especially careful with both the gifts they receive and the ones they send. Those roles sit closest to the decisions that others might try to influence.”
Sarah says that many firms are already tightening their approach even for modest gestures.
“Reputational damage can be as serious as legal penalties for a lot of businesses and owners are far more conscious now of how things might look from the outside, especially with how quickly rumours can spread online.
“Logging gifts, requiring approval and setting limits are now standard practice for many of our clients.”
Smaller and mid-sized firms are advised to keep policies on bribery and corruption clear and proportionate.
“Sensible thresholds, pre-approval for anything above a nominal amount and basic staff training go a long way in protecting your firm against bribery and corruption. The aim is to build relationships with clients and partners without creating risk,” said Sarah.
“Limits such as £50 per gift or £200 per person over a year are common practice.”
As the Christmas season is in full swing, Sarah would remind businesses to be careful with their approach to corporate gifting.
“If you would not be comfortable seeing the gift mentioned publicly or explaining it to a regulator, it is better not to proceed.”
For more information about MGI Midgley Snelling LLP or for further advice on keeping your business compliant with the Bribery Act, please contact us.
