Bribery Act threatens corporate Christmas gifts – PwC

NEW legislation is blowing the chill wind of austerity over corporate Christmas gifts, according to PwC Forensic Services.

The Bribery Act 2010, due to come into force next April contains radical changes which could have a significant impact on corporate gifts to customers and clients.

Severe penalties await those flouting the new rules, warned the adviser.

The long awaited Act will make it easier to convict people who pay or offer to pay bribes and those who receive or solicit them. There will also be more stringent requirements in relation to dealings with foreign public officials and a new corporate offence of failing to prevent bribery including by a person associated with a company, such as an overseas distributor or agent.

John Tracey, partner and forensic services expert at PwC in the Midlands, said: “Christmas is the peak season for client entertaining and gift giving but companies would be wise to ensure their policies in this area are adequate and are properly enforced.

“Employees need to be made aware exactly what the rules are in this area. Suppliers should also be made aware that excessive gifts and hospitality are often not wished for and can be counter-productive.”

As a guide to what can and can’t be given, the Ministry of Justice has said promotional expenditure which is “reasonable and proportionate” should not cause problems but monetary levels are not supplied, with the onus resting on companies themselves.

Acceptable gifts are considered to be: calendars, mouse mats, coasters, company logo-branded low cost merchandise such as stress balls, umbrellas and sports bags etc. Being invited to a modest lunch is also acceptable as is reasonable socialising such as attending a UK sporting events as long as the host is present.

Gifts deemed unacceptable include: lavish hampers, a case of champagne, overseas sporting events and entertainment, invitations to any sporting events where the host is not present and anything of significant value delivered to a home address.

Transparency International recently released its 2010 Corruption Perceptions Index which measures the degree to which public sector corruption is perceived to exist in 178 countries around the world.

The UK fell three places to 20th this year. From next April, the UK will have one of the world’s strictest set of anti-bribery laws and enforcement agencies have indicated their plans to make full use of the new powers.

PwC said UK companies needed to ensure now that they fully understood the rules around gifts and implemented procedures to control and monitor their use. Otherwise they may find themselves on the Serious Fraud Office’s Christmas list.