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The French Anti-Corruption Agency - Gifts and entertainment guide - AFA

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The French Anti-Corruption Agency - AFA published, approximately 1 year ago, a guide on gifts and entertainment in order to guide companies, foundations and associations to establish safe rules on this topic.

The guide was created with the purpose of promoting the reduction of the risk of corruption and influence peddling, whether it is active, by making the individual of the private initiative liable or passive, by making the public official or even another individual in the private sector liable.

The guide makes it clear that a conviction for corruption can lead to the following consequences:

- its temporary exclusion from the public procurement market;
- the loss of confidence of its business partners, which can result in the interruption of contractual negotiations or non-renewal of contracts;
- the deterioration of its image with consumers, investors and creditors;
- the deterioration of work relationships and the loss of employees' confidence in the organization's values, or even more difficulty in attracting new talent, sensitive to ethical commitments.

The AFA's recommendations emphasize that the code of conduct is not limited to a collection of good practices, but also formulates prohibitions aimed at the constitutive uses of probity violations. As a result, it must deal with gifts and hospitality, facilitation payments, conflicts of interest, sponsorship, as well as, if appropriate, lobbying.

In practice, an organization's gift and hospitality policy should be defined in accordance with its risk mapping and for training aimed at its staff and its employees most exposed to the risk of corruption.

The guide mentions, for example, the rule that prohibits gifts in the health sector, materialized in Ordinance No. 2017-49, of January 19, 2017, regarding the benefits offered by people who manufacture or market health products or services, which reinforces the gift ban, established in the laws of January 27, 1993, on various social measures and December 29, 2011 on strengthening the safety of medicines and healthcare products:

  • Article L. 1453-3 of the Public Health Code prohibits healthcare professionals from receiving benefits in cash or in any other form, directly or indirectly, offered or acquired by people who manufacture or market healthcare products or services;
  • Article L. 1453-5 of this code prohibits people who manufacture or market health products or services from offering or promising benefits in cash or in kind, in any form, directly or indirectly, to healthcare professionals.

The same code above establishes a sentence of one year in prison and a 75,000 euros fine for the healthcare professional who receives benefits and two years in prison and a 150,000 euros fine for those who offer benefits to the healthcare professional.

The formalization of a policy with guidelines for the management of gifts and entertainment, in addition to the code of conduct, will make it possible to detail the conditions relating to their granting and acceptance, as well as internal rules for traceability and validation.

To help companies, foundations and associations set up their gifts and entertainment policy, the guide mentions the following steps:

1. Create the definition and illustrate examples of gifts and entertainment.
2. Determine the legitimate criteria for offering and accepting gifts.
3. List the conditions under which it is possible to offer or accept gifts and entertainment.
4. Define the internal rules of approval and traceability.
5. Organize each other's responsibilities and roles.

The guide mentions, by way of example, conditions that should be taken into account when regulating the offer and acceptance of gifts and entertainment, seeking to differentiate an act of courtesy from an act of corruption:

1. are authorized by applicable law (s);

2. are not requested by the beneficiary;

3. do not aim to obtain compensation or improper advantage;

4. have no intention of influencing a decision and, therefore, are not practiced at a strategic moment (example: ongoing bidding, signing agreements, voting, granting authorizations, obtaining contracts, modifying legislation or regulations, etc.);

5. the beneficiary must not exercise decision-making power over an early or pending decision that affects the organization's interests;

6. are occasional with regard to professional activity;

7. do not cause embarrassment if they are revealed publicly;

8. are carried out within a strictly professional framework;

9. are registered in the organization's books and records (example: registration of gifts offered and received).

The guide continues to suggest the following rules:

Gifts - Should not be given in cash or equivalent (example: gift cards, gift certificates)
- Should not be provided in the form of services or other in-kind benefits (example: a promise to hire)
- the value of the gift received must be insignificant or reasonable (reciprocity test), including with regard to the context economic and social situation of the country in question and the uses that are practiced there
- the value must correspond to an amount compatible with the environment, service, functions and risks assumed by the entity and / or its employees
Meals and Entertainment - must allow participants to come closer to deal with professional matters
- the value of the meal must be reasonable in the sense defined by the organization
- must take place during the week and relatives should not be invited
- Entertainment must be approved by senior management or the compliance officer
Business Trips - cost coverage must be agreed in advance, formalized and strictly limited (without allowing tourism)
- the distance and duration of the journey must be justified by professional reasons (example: visiting a factory)
- the trip must respect the organization's business travel policy, if any

The guide makes it clear that companies, foundations and associations should not focus on controlling gifts and entertainment only on value, but also on the frequency with which they are offered or received. It is highly recommended that there be a register of gifts and entertainment offered and received, as this way, there will be transparency and control over what is being practiced with respect to gifts and entertainment.

The guide then establishes three elements that help to define the criteria for offering and receiving gifts and entertainment:

1. The assessment of reasonableness.
2. The determination of a limit beyond which an authorization is required.
3. Fixing a ceiling that must not be exceeded.

Regardless, the guide also suggests transparency, establishing the creation of necessary rules and an approval procedure, in case the limit is exceeded, in addition to allowing traceability; something that would be possible with a digital tool customized for that purpose.

If the company does not wish to register all gifts and entertainment offered or received, the guide suggests registering certain gifts or entertainment, regardless of value, to:

  • guarantee traceability and guarantee transparency;
  • demonstrate the effectiveness of the procedure;
  • warn about the behavior of certain third parties and, if necessary, carry out a subsequent assessment or remind them of company rules,
  • detect internal behavior contrary to the organization's rules,
  • illustrate the training given to employees with specific cases;
  • enrich the risk mapping when it is updated.

If the gift or entertainment is not appropriate according to company guidelines and it is not possible to return it, the guide suggests donating it to a non-profit institution or a drawing among all employees.

If the company operates internationally, it is important that its guidelines establish the use of the strictest rule, in case of conflict between the company's guidelines and local law.

The guide mentions everyone involved with gifts and entertainment as follows:

Top management Validates the gift and entertainment policy
Collaborators They are trained and subject to the rules of tracking and transparency
Hierarchical superior Validates authorization requests and expense reports
Compliance officer You are contacted in case of difficulty in applying the policy
Accounting Rejects payments if rules are not followed
Internal controls Controls respect for gifts and entertainment policy
Internal audit Reviews the respect for the gifts and entertainment policy, especially regarding its relevance and effectiveness

Senior management's commitment to a zero-tolerance policy towards any unethical behavior in general and any risk of corruption in particular, constitutes a fundamental element in preventing and detecting corruption. Thus, the launch of such a policy must have the organization's top management serving as an example, followed by training for all employees (collaborators), especially those most exposed to offering or receiving gifts from third parties. At the end of this training, the difference between something considered as courtesy or not should be clear.

Employees should be encouraged to always act with transparency, to ask, in case of doubts and to refuse and / or return gifts or entertainment received that do not comply with company guidelines.

Finally, the company must establish and detail the different levels of control, as suggested below:

1. Self-control Made by the employee himself
2. 1st level control Made by the superior
3. 2nd level control Performed by internal controls or by the compliance officer
4. 3rd level control Performed by internal audit

In the case of offering gifts or entertainment, according to the guide, controls must be exercised when paying or reimbursing expenses. Depending on the opinion of the author of this article, this is the only recommendation that deserved a review, since the controls should operate before the gift or entertainment is paid. The guide itself recommends the establishment of safe limits and registration in a digital tool.

Naturally, disciplinary measures should be applied to those who violate the guidelines established by the company regarding this issue, depending on the level of severity and frequency of the situation.

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