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The FCPA Need Not Be The Grinch That Steals The Holiday Spirit

In running FCPA Professor, I have conducted daily searches six years running for Foreign Corrupt Practices Act content. The flow of FCPA and related information is often predictable at certain times of year.

This time of year, FCPA Inc. and others look for fresh angles regarding FCPA topics.

So as the holidays approach, it was not surprising to find articles discussing the FCPA risks of holiday gift giving. (see here [1] “Don’t Let a Season of Giving Turn Corrupt;”  here [2] “Tis the Season to Revisit Gift Giving Policies and Procedures;” here [3] “Monitoring Gifting Policies During the Holiday Season;” here [4] “Giving Corporate Holiday Gifts Without the Bribery Risk;” here [5] “Giving the Perfect Gift: 4 Tips for Avoiding Compliance Risks This Season;” here [6] “Corporate Holiday Gift Giving and Anti-Corruption Compliance.”).

Yes, certain FCPA enforcement actions have involved gift giving, including in connection with holidays and festivals – such as Chinese New Year and India’s Diwali Festival.

However, as previously highlighted in this [7] post (a review of the book “Suspicious Gifts [8]“), throughout human history gifts have been a respected and legitimate form of gratitude and generosity, serving as a social glue important to any cohesive society. Yet, and invoking a concept from the book, in this current era of anti-corruption enforcement, everything it seems is viewed through a “bribery gaze.”

This “bribery gaze” has social and public policy consequences. As the author of the book argued:

“Campaigns to eliminate these gift exchanges are at the same time campaigns to restrict the gamut of courtesy or ritual exchanges. The manifestations of courtesy, gratitude, and social bonds, which are so important as social glue in any cohesive society, are not just called into question, but criminalized.”

This holiday season ought not be gift-less because of the FCPA or any other similar law.

Indeed, as the DOJ/SEC issued FCPA Guidance [9] states:

“A small gift or token of esteem or gratitude is often an appropriate way for business people to display respect for each other. Some hallmarks of appropriate gift-giving are when the gift is given openly and transparently, properly recorded in the giver’s books and records, provided only to reflect esteem or gratitude, and permitted under local law.  […] The FCPA does not prohibit gift-giving. Rather, just like its domestic bribery counterparts, the FCPA prohibits the payments of bribes, including those disguised as gifts.”

My own two cents on the FCPA risks of gift giving around the holidays is as follows.

During this season of giving, I think it would be wise for companies not to view everything through a bribery gaze, but with a sense of practicality. The corporate community – which is frequently bombarded with doomsday scenario after scenario by FCPA Inc. – sometimes needs to take a step back to realize that in order to violate the FCPA’s anti-bribery provisions there has to be corrupt intent. While it may seem a bit counterintuitive, gift giving during the holidays can actually be less risky because it is the holiday season and gestures of good will are common.  Companies should be more concerned with a gift that occurs outside the normal periods of gift giving.