The borderline between courtesy and corruption
The giving of gifts, invitations and hospitality has been a generally accepted business practice since time immemorial. This practice, as is well known, is deeply rooted in our society and can have different positive purposes: to thank the trust placed in us by a client or the services obtained by a supplier; or, among many others, to promote a specific product.
However, the close relationship between the giving of gifts, invitations and hospitality in business contexts with different practices that can be considered corrupt from a criminal law perspective cannot be ignored: among others, the improper promotion of a certain business relationship; the giving of a reward for the adoption of a business decision; or the giving of gifts with characteristics that are not considered socially appropriate.
In this context, the purpose of this note is to outline the basic lines for defining the boundary between what would be considered mere acts of courtesy and what would constitute corruption offences. Finally, a series of Compliance recommendations will be offered that any organisation can implement in order to effectively prevent corruption offences in the context of giving gifts, invitations or other hospitality.
As regards the scope of punishments of the giving of gifts, invitations and hospitality from the perspective of corruption offences, it must be stated that both case law and academic doctrine rule out a literal interpretation of the criminal law regulations governing this issue (Articles 419 et seq. of the Spanish Criminal Code in relation to public corruption; and Articles 286 bis et seq. of the Spanish Criminal Code in relation to corruption between private individuals), according to which any gift in the context of a business relationship should be criminal in nature.
According to doctrine and case law, these provisions must be interpreted in the light of the legal principles of insignificance (de minimis rule, Geringfügigkeit) and, above all, of social appropriateness (Socialadäquanz), allowing scope for the giving of gifts in the context of business relations without these in themselves being regarded as corrupt acts.
However, the definition of what is considered socially appropriate or insignificant is not straightforward. The lack of clarity in jurisprudential decisions as to how these principles should be translated into the conditions that should govern the giving of gifts may make it difficult to comply with the law in certain situations.
Thus, from the study of the case law on the matter, it is mainly derived that for a specific gift not to be considered as corrupting, (i) it must be of minimal value and (ii) it must not have the capacity to influence the specific person who is to receive it. Thus, the giving of lavish gifts should generally be considered as questionable, insofar as it could be considered as an appropriate vehicle for the commission of corruption offences.
In this context, a brief mention should be made of meal invitations, which are of great strategic importance for business development in our society. The current doctrine on the matter considers the invitation or acceptance of occasional meals to be socially appropriate as long as they are of a modest or reasonable value (although they could also be considered criminal if they do not meet the above requirements).
Having developed the state of the question with respect to the Spanish legal system, it is interesting to analyse the position adopted by different comparative law jurisdictions. As will be seen below, these jurisdictions introduce some elements that help to distinguish between gifts, invitations and hospitality that are considered lawful and those that could constitute corruption offences:
- German law: the doctrine of the Bundesgerichtof (BGH) has defined a number of elements which may lead to the consideration that a corporate gift constitutes an act of corruption:
- The existence of professional contacts between the parties (e.g. customer-supplier relationships, this criterion being stricter than those established by Spanish jurisdiction).
- The high value of the gift or care given.
- The clandestine delivery of the gift or care.
- Common Law: anglo-saxon legal systems have regulated the issue of corruption prevention with particular intensity (the Foreign Corrupt Practices Act of the United States and the UK Bribery Act of the United Kingdom being important examples).Common law also takes into consideration the social appropriateness and relevance of each particular attention in order to determine whether it should be considered a corrupt act or not. Likewise, it has become an interesting practice in these jurisdictions to establish a quantitative limitation on the amount of gifts that can be given or accepted in internal corporate compliance regulations.
By way of conclusion, it should be stated that, given the lack of clarity of the jurisprudential criteria used to determine whether a specific gift, invitation or hospitality is (or is not) of a criminal nature, it is of great importance to have solid internal compliance regulations that regulate these matters and establish controls in this area.
Thus, (i) the definition of a corporate stance against corrupt practices in the corporate Code of Ethics; (ii) the implementation of a process for the giving and acceptance of gifts (as well as the determination of the maximum value of gifts); and the development of other controls such as (iii) procedures for the identification and evaluation of third parties with whom each company does business, will contribute to the mitigation of corruption risks, ensuring the achievement of a correct corporate culture of ethics and compliance in the development of business activities.
Guillem Gómez Casalta, lawyer of the Compliance Department of Molins Defensa Penal.