Don't Let Corporate Holiday Gift Giving Become an Anti-corruption Compliance Hangover

Global anti-corruption enforcement to increase in 2016

18 Nov, 2015, 08:30 ET from Deloitte

NEW YORK, Nov. 18, 2015 /PRNewswire/ -- As the holiday season begins, 20.4 percent of respondents to a recent Deloitte poll say their companies don't assess employee gift-giving corruption risk. Yet, more than 4 in 10 (43.4 percent) expect anti-corruption enforcement to rise in 2016.

"As generous as the holidays make many feel, giving gifts that could be seen as bribes to non-US government officials can result in fines, regulatory action and brand damage for multinational organizations," said Bill Pollard, Deloitte Advisory partner, Deloitte Financial Advisory Services LLP. "Now is the time to conduct gift-giving compliance training and increase efforts to help ensure anti-corruption compliance through the holiday season. As global enforcement continues to increase, take a note from regulators and make sure your corporate records around travel, gifts and entertainment are transparent and show no 'corrupt intent'—particularly when out-of-country government officials are recipients."

Poll results show that anti-corruption policies for giving gifts to non-US government officials run the gamut with 18.2 percent maintaining a no-gift policy and providing no gifts to customers, 16.4 percent giving only small company logo items, 15.7 percent restricting gift value and 6.1 percent using separate policies for non-US government officials versus other customers and third parties.

Leading practices to prevent and detect corruption in gift giving include:

  • Set ground rules clearly — Describe the nature and type of acceptable gifts, payments, travel and entertainment. Escalate all gifts for government officials to compliance for review. Create an approval process with aggregate dollar limits. Define disciplinary process for non-compliance.
  • Act globally — Ensure rules are consistent not only with US laws but local laws and customs. Translate that guidance into all appropriate languages in which your organization operates.
  • Keep gifts corporate — Give gifts with company logos, reflect the organization's products and ensure they are intended for official — not personal — use (e.g., business card holder).
  • Make gifting inclusive — Give gifts publically and transparently, involve teams as opposed to individuals (e.g., specialty baked goods for a team to share)
  • Prohibit cash (e.g., gift cards)

To uncover anomalies pointing to corrupt intent and bribes disguised in gift giving, some compliance, legal and internal audit teams use visualization and analytics tools. However, just 8.4 percent of respondents said their organizations use visualization and data analytics technologies effectively to support anti-corruption efforts.  One-third (33.1 percent) didn't use the tools at all.

"Anti-corruption visualization and analytics tools can help address varied global anti-corruption laws and gift-giving customs, making multi-national anti-corruption management easier than before," said Pollard.  "But, nothing replaces the fundamental value strong anti-corruption professionals, policies and procedures do."

About the online poll
More than 1,600 professionals responded to poll questions during an October 29, 2015 webcast, titled "Gift-giving and corruption risk: Stress-testing your compliance program for the holidays." Respondents work in a range of industries including financial services (27.7 percent); commercial and industrial products (24.7 percent); and technology, media and telecommunications (16.1 percent).

About Deloitte Advisory
Deloitte Advisory helps organizations turn critical and complex business issues into opportunities for growth, resilience and long-term advantage. Our market-leading teams help our clients manage strategic, financial, operational, technological, and regulatory risk to maximize enterprise value, while our experience in mergers and acquisitions, fraud, litigation, and reorganizations helps clients move forward with confidence.

As used in this document, "Deloitte" and "Deloitte Advisory" mean Deloitte & Touche LLP, which provides audit and enterprise risk services; Deloitte Financial Advisory Services LLP, which provides forensic, dispute, and other consulting services; and its affiliate, Deloitte Transactions and Business Analytics LLP, which provides a wide range of advisory and analytics services.  Deloitte Transactions and Business Analytics LLP is not a certified public accounting firm. These entities are separate subsidiaries of Deloitte LLP.  Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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