The holiday season is that time of the year when companies reward their business partners with reasonable gifts, entertainment and travel (GTE) offers.
It’s also during this season when companies are most vulnerable to GTE-related compliance risks because ignorant compliance professionals are not aware of risks involved or are simply trying to play dodgy by offering bribes to raise prospects for the coming year.
Gift-giving is a long-standing global tradition that many companies practice by offering reasonable rewards to their clients, suppliers, distributors, resellers, vendors and other business partners.
It goes without saying that the practice of giving reasonable gifts over the holiday season is not illegal but regulators expect companies to create and implement water-tight GTE policies and procedures that clearly distinguish what is a reasonable gift and what is not.
Over the last 10 years, companies have been sanctioned or fined for paying bribes disguised as seasonal gifts.
What does holiday gift-giving mean for Compliance Officers?
The holiday gift-giving season is the time for Compliance Officers to stay on top of their game and ensure that no gift of value goes to an external partner. Most importantly it is that time of the year when compliance practitioners MUST be very vigilant by ensuring that all GTE offers are done in a transparent manner and in line with their companies’ written policies and procedures.
As you look forward to a holiday season full of gift-giving and gift-receiving events, The Red Flag Group® has put together some actionable tips to look out for as you prepare to share and receive gifts with your valuable partners.
Policies and Procedures: Ensure that you have a GTE policy (if you don’t have one already) that clearly stipulates what reasonable gift is. The policy MUST also clearly outline cash limit that can be offered or accepted. Every transaction MUST be recorded and all the books and records updated.
Transparency: Ensure that all offers are transparently awarded to the deserving partners and clearly labelled with your corporate colours and logos. Your employees should immediately report back if they are offered lavish travel or entertainment gifts. NEVER allow cash to be given or received. Everything MUST be kept corporate and within reasonable cash limit.
Internal controls: Set up a clear reporting system where all members of your company can consult and seek clarity when they are not sure what to offer or accept.
Technology solution: If you are a multinational company with numerous global operations, ensure that you have a centralised and automated GTE tracking and reporting system. This will ensure that ALL gift-related activities undertaken by your subsidiaries or other related entities outside your HQ are well recorded.
The Red Flag Group®’s ComplianceDesktop® | Compliance Technology Platform enables companies to track all payments in a secure system with a full audit trail for robust compliance.