Sending the wrong gift to the wrong person could leave a company facing bribery charges.

During the holiday season, we naturally want to acknowledge and thank our clients and vendors. Today, however, with stricter regulatory requirements and varied country cultures, gift giving can pose a real risk to the recipient, the gift giver, and the companies involved. Consider this scenario:

An invitation is extended to two members of a client team to join an account manager and an associate for a Major League Baseball game. They graciously accept and when the game day nears the account manager sends them the tickets. Shortly thereafter, he receives an email saying they cannot accept the tickets after all as they are too expensive. The tickets are promptly mailed back.

Providing a gift that could be interpreted as a bribe to a foreign government official or someone tangentially connected to a foreign official can result in fines, regulatory action, and potential brand damage for companies. Your company no doubt has the proper controls in place. There is, however, no better time to re-educate your employees about the compliance requirements surrounding this delicate issue. Be sure to do the following:

• Make sure that the types of gifts that are appropriate are clearly defined.
• Ensure that gifts to individuals in government, if given at all, adhere to government dollar limitations. These gifts should be reviewed, approved, and clearly documented by a member of the company’s compliance team.
• Break down your gift-giving policy on a country-by-country basis, as cultures and local laws will vary.
• If possible, encourage employees to give gifts that have your company logo affixed.
• Encourage employees to be transparent with their gift giving (i.e., give gifts that can be shared by a group of team members).
• Never allow cash or cash equivalents such as gift cards to be given.
• Document, document, document!

Don’t let holiday gift giving become a New Year’s nightmare. With robust internal controls around gift giving—and timely reminders that gifts given during the holiday season can form a part of a Foreign Corrupt Practices Act (FCPA) violation—such complications can be prevented.