FCPA: To Give or Not To Give and If So How, Under the FCPA

To give or not to give? That is certainly a question but it may also include the question of the value of the gift. Under the Foreign Corrupt Practices Act (FCPA) and UK Bribery Act gifts and entertainment continue to bedevil compliance practitioners, business unit personnel and compliance programs in general. Yesterday at the Dow Jones Global Compliance Symposium there was a panel discussion on gifts that raised some interesting approaches.

Rules Based Approach

One company had a fairly typical US rules based approach which set the dollar value of gifts and entertainment in two general categories; they are gifts and entertainment for foreign governmental officials and gifts and entertainment for non-foreign governmental officials. Interestingly the company also had a third category which was gifts and entertainment that its own employees could accept. The limits were lower for the foreign governmental official than the non-governmental official. If an employee desired to go over the specified limit, then Compliance Department approval is required. However, the Compliance Officer said that if the gift or entertainment request was reasonably detailed and a clear business purpose was articulated in the request, she would usually approve the request if the amount of money did not appear to be unreasonable.

The compliance officer reported some numbers from her company’s Ethics’ Helpline from the past year. Almost one-third of the calls which came into the Helpline were categorized as inquiries rather than reports of issues which were investigated. Of this group of inquiries, the largest single group, almost 25%, were questions about gifts and entertainment issues. So even with this rules based-bright line approach there were still many questions from the employee base on gifts and entertainment.

Values Based Approach

The second company took a different approach ...

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