01 December 2016

One prediction for 2017 is that the Serious Fraud Office (SFO) will build on the enforcement of the Bribery Act 2010 that we witnessed during 2016.

As it is the season of giving, we are regularly asked by clients ‘where is the line?’ in relation to what is and is not allowed in the arena of Christmas gifts and hospitality.

By way of answer, we have prepared the following guidelines to prevent your festive season’s activities becoming the subject of the SFO’s to do list in 2017:

  • The first point is that corporate hospitality and gifts are not by themselves criminalised by the Act. Those that are reasonable and proportionate are perfectly permissible. The Ministry of Justice has said as much. However, it is plain that gifts and hospitality are vulnerable to being used as bribes.
  • Three critical factors to consider when proposing to offer, or when being offered, gifts or hospitality this Christmas are: the intention behind the offer, its value, and its timing.
  • Intention: Is the underlying intention to reflect good working relations with, or to thank, a customer for its custom, for example by hosting Christmas drinks or distributing branded merchandise (generally OK)? Or, is there really no business development aspect at all, for example by providing a customer employee with tickets to a Christmas show for him and his family, without any attendance by the business (generally not OK)? Worse still, is it in reality designed to induce improper decision making on the part of the recipient of the gift or hospitality (definitely not OK)?
  • Value: Is the gift or hospitality of relatively modest value in the context of the industry (e.g. a Christmas lunch or a bottle of wine (generally OK) or is it a case of rare vintage champagne (certainly requires more scrutiny)?
  • Timing: What is the timing of what is being offered? Is it being offered simply to mark the Christmas period (generally OK)? Or is it being offered to persons with decision making power during a tender or procurement process (generally not OK), or while there is an ongoing dispute over services provided or invoices (requires more scrutiny)?
  • You should operate an anti-bribery policy, together with gifts and hospitality register. Thresholds must be set in the context of the industry. However, example thresholds for written registration and approval might be £500 per head for hospitality (given or received) and £100 per head for gifts (also given or received).

We anticipate intensified SFO anti-bribery enforcement activity in 2017. Accordingly, we recommend that all of our clients take the opportunity to review and if necessary revise their anti-bribery procedures.

If you have any concerns over gifts or hospitality offered or received this Christmas, please contact our fraud and white collar crime specialist team.

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Paul Haggett

Paul Haggett Partner

  • General Counsel
  • DPO

Fraud and White Collar Crime

Our fraud and white collar crime team combines criminal, regulatory and civil fraud expertise to provide corporates and directors with a complete service in this challenging area.
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