Buyers should beware of present policy

15 December 2011

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16 December 2011 | Paul Snell

Buyers have been warned to make sure policies around accepting gifts or hospitality this Christmas are enforced because suppliers could be tempted to offer generous presents to hold on to customers.

If organisations fail to take adequate measures to prevent any potential bribery they could be at risk of prosecution, following the introduction of the Bribery Act in the UK this summer.

“Christmas is the peak season for client and customer entertaining and gift giving, but companies would be wise to ensure their policies in this area are adequate and properly enforced,” said Andrew Gordon, partner and head of investigations at PwC forensic services.

“In the current difficult economic climate, although some companies may have reined in their spending, others may be tempted to bestow lavish gifts in a bid to keep their customers sweet.”

He added that businesses should proactively make vendors aware of their policy, including posting it on their website.

The Bribery Act allows for “reasonable and proportionate” corporate hospitality, but the definition of what this entails has yet to be tested in the courts.

The accounting and audit firm said items such as calendars, low-cost promotional items such as stress balls and umbrellas and modest hospitality should be fine. Expensive gifts or overseas entertainment should ring alarm bells and lavish hampers, cases of fine wine or anything delivered to a home address is not acceptable.

“A Christmas food hamper, for example, from Fortnum & Mason costing several thousand pounds would clearly not pass the reasonableness test under the guidance. But hampers aside, it’s not generally a black and white area; much will depend on the context and intent of the gift,” added Gordon.

This month, a survey found that less than two-fifths of US firms specify in a policy the maximum value of a gift that can be accepted. The CIPS code of professional ethics states members should “not accept inducements or gifts, other than items of small value”.

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