It may be a little early for moon cakes, but as we are well into the season of gifting, and where businesses are receiving gifts, consideration of what might constitute a bribe, should never be far from company owners' minds. After all, it wasn't too long ago, in 2009, that a local company director received a jail term for offering 15 boxes of moon cakes to local police officers.
Before we get too bogged down with the word 'bribe' however, we should point out that the local Hong Kong legislation, the Prevention of Bribery Ordinance (the "Ordinance") actually describes a bribe as an 'advantage'. An advantage is gained when there is an ulterior motive for offering or giving or even receiving a gift. The definition of what might constitute a gift, includes everything from providing a company's goods, to receiving money or a loan; providing services at beneficial rates or even free of charge; working for free; forgoing debts or obligations; or just pulling in favours. It is by no means instantly obvious that a bribe situation is on the cards. Do not wait until you have received a briefcase of cash to think 'potential bribe'.
You might be forgiven for thinking that there is a minimum value under which a gift will never be construed as an advantage. Indeed there is not, and although there is no specific requirement for a company to have a gifts or entertainment policy, it is clearly prudent that company decision-makers consider implementing one in short order.
Such a policy should, at the very least, have a register of all gifts offered, given or received by any employee of the business. This quickly highlights unusual situations such as overly-generous gifting, or gifts of an unusually high value. Although entertainment is excluded from the definition of 'advantage', hospitality might arguably be construed as such, and again while the line between gift and advantage is at best unclear, companies should always as a matter of best practise consider the potential myriad reasons behind the gift, as well as its actual value, both financially and to the business itself.
A more considered company policy is likely to train employees in key areas of corruption; lay down specific reporting requirements of all company employees, ensuring that senior members of the business are accountable; and put in place specific policies and procedures, particularly with regard to detailed record keeping, the value of which will be only too clear in the event that the company is investigated.
Having a policy and the ability to demonstrate to regulators that the company has solid anti-corruption and anti-bribery measures in place is a big step in the right direction to minimising the company's liability, where an improper advantage is implicated. Where the local company is a branch or local office subsidiary of a UK or US company, or equally, simply where employees are UK or US nationals, training should be given to employees, not just in respect of the Ordinance but on foreign legislation. The UK Bribery Act, and the United States Foreign Corrupt Practices Act both take a very 'long arm' approach to anti-corruption by citizens overseas and it pays to understand the risks of doing business even when not on home turf.
Bribery that takes place in Hong Kong (giving, offering or promising or accepting an advantage) is a criminal offence under the Ordinance, with tough penalties. Perhaps there really is no longer such thing as a free lunch.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Hongkong Business. The author was not remunerated for this article.
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Daniel Walker is the Founder of Lawyers Without Ties (LWT).