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

Grinch

Media sources (as well as FCPA practitioners) are always looking for fresh angles regarding Foreign Corrupt Practices Act topics.  So as the holidays approach, it was not surprising to find articles (here “Making a List and Checking It Twice … Compliance Tips for Holiday Business Gifts” and here “7 Potential FCPA Pitfalls For the Holiday Season”) discussing the FCPA risks of holiday gift giving.

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 post (a review of the book “Suspicious Gifts“), 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. However, and invoking a concept from the book, in this new era of anti-corruption enforcement, everything it seems is viewed through a “bribery gaze.”

  • When you want to be generous – it could be bribery!
  • When you want to be friendly – it could be bribery!
  • When you allow yourself to be invited – it could be a bribe!
  • When you accept a present or prize – it could be a bribe!

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.”

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

Indeed, as the DOJ/SEC issued FCPA Guidance 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 upcoming 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.

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