Does the law place any restrictions on hospitality, travel and entertainment expenses? Are there specific regulations restricting such expenses for foreign public officials?
Bribery & Corruption (2nd edition)
There are no specific restrictions on hospitality, travel and entertainment expenses. However, it is highly likely that such expenses would be considered as bribery if they exceed a reasonable amount, or involve extravagant non-business-related activities, and therefore, subject to restrictions that would vary by multiple factors such as type of industry and different cities.
A good frame of reference comes from the standards regarding travel, accommodation, and meeting expenses regulating public officials published by the Central Committee of the Communist Party of China (“CPC”) and local governments. For instance, the accommodation fee for a public official at ministerial level (eg. mayor of Shanghai) in large cities like Beijing and Shanghai is around RMB 1,100 per day. In addition, industrial organizations such as China Association of Enterprise with Foreign Investment R&D-Based Pharmaceutical Association Committee (“RDPAC”) also formulate certain restrictions that are applicable to its members.
Likewise, as for hospitality, travel and entertainment expenses for foreign public officials, no specific restrictions other than the prohibition against bribery to foreign public officials is clearly laid out. It is worth mentioning that the crime of offering bribes to foreign public official was amended into the Criminal Law in 2011, which regulates the act of offering financial interests to foreign public officials or officials in international public organizations. The criminal liabilities include criminal detention or fixed term imprisonment of up to ten years, along with the monetary penalty. Similar considerations on the nature, amount, and necessity of such expenses would be analysed for bribery related risks.
Under French criminal law, there are no specific provisions dealing with gifts, hospitality and invitations in a professional context. They nevertheless fall within the scope of bribery laws, and as such, are restricted. In addition, as provided by the AFA guidelines, companies’ codes of conduct should address such issues.
The law contains no restrictions on hospitality, travel and entertainment expenses. If case law does not apply, there is no statutory limit. Providing travel and entertainment expenses is not exempt from criminal liability. Notwithstanding this, case law exists which exclude socially adequate contributions from the statutory definition, as long as they are low in value and do not fall into a regular pattern.
Civil service law is more restrictive and prohibits public officials and servants from accepting any gifts, gratifications or benefits from a third party. In general, federal and state authorities’ own guidelines apply to public officials of the respective federal state. These guidelines contain internal administrative regulations in the public service which usually allow gifts below EUR 10 per donor each year. Hospitality to public officials with a direct connection to their official duties leads to the assumption that the official acts are in accordance with the employer’s consent. In other cases an explicit permission is necessary.
Attachment 1 section 4 of the Parliamentary Rules of Procedure (GO-BT), together with section 44b of the Law on the Legal Relations of Members of the German Bundestag (AbgG) cover all types of contributions a Member of Parliament can receive and necessary guidelines regarding them.
Therefore, there are no specific regulations restricting such expenses for foreign public officials.
General restrictions applicable to all businesses and activities are not in place, so these expenses are not totally prohibited and there are no threshold rules for such expenses. There are, however, restrictions or prohibitions in certain industries governed by special regulations or restrictions by the Accounting Regulation.
In the field of healthcare, for example, specific rules are applicable in relation to these expenses while in other fields (e.g. public works) these are totally prohibited.
Under the Ethics Acts, the Standards Commission has issued guidelines for office holders and public servants (the “Guidelines”). The Guidelines provide that all office holders and public servants are expected to adhere to the fundamental principle that an offer of gifts, hospitality or services should not be accepted where it would or might appear to, place the office holder or public servant under an obligation.
The Standards Commission has also published a Code of Conduct for Office Holders and a Civil Service Code of Standards and Behaviour (the “Codes of Conduct”), which set out in detail the standards of integrity and conduct expected of office holders and public servants in the performance of their official duties, and include specific additional guidance on accepting gifts and hospitality.
Failure to abide by the Guidelines and Codes of Conduct set out by the Standards Commission may result in Irish officials and office holders committing an offence.
In relation to hospitality and travel, the provision of local and non-local transportation is generally acceptable assuming there is no corrupt intent and no desire to influence a public official in the exercise of his/her official duties, however, office holders and such designated public servants are required to make appropriate disclosures in relation to gifts and related property/services.
Generally, small token gifts such as calendars, diaries or pens of small value are acceptable provided there is no intent to influence the government official. When the aggregate value of gifts during a relevant annual period exceeds the threshold of €650 each individual gift should be declared, even when the individual gift value does not exceed €650. In relation to surrendering gifts, the Standards Commission is of the view that the Ethics Acts do not require the surrender of gifts from one source where they are presented on separate occasions during a relevant annual period and while their individual value does not exceed €650, their aggregate value does. Also, where a number of gifts are presented on one occasion, these should be treated separately for the purposes of surrender (where not intrinsically linked), so the €650 threshold applies to each of them.
Common examples of corporate hospitality such as meals, match tickets and other entertainment also fall within the ordinary meaning of ‘gift, consideration or advantage’, language which is used in the 2018 Act. However, such gifts or entertainment do not necessarily fall within the scope of the 2018 Act. In order for the provision of corporate hospitality to amount to an offence under the 2018 Act, it must satisfy all of the elements of the offences under the Act. The purpose of the Act is not to criminalise corporate hospitality that is offered simply to maintain good business relations. For example, in order for the offence of active corruption to apply, the hospitality must be offered corruptly (ie, with an improper purpose personally or by influencing another person) and it must be offered as an inducement to or reward for a person doing an act in relation to their employment, position or business.
Although the law does not address directly the topic, both Scholars and Case Law have highlighted that gifts and other benefits related to hospitality can be the object of transactions that may amount to corruption or bribery. In fact, the relevant provisions of the Criminal Code and the Civil Code refer to ‘money or other benefits’, thus including anything that could provide an advantage to the corrupted party or that could be considered of any value by the latter.
As outlined above, under Belgian law, a bribe can constitute an offer, promise or benefit of any kind. Due to this broad scope of application it includes hospitality, travel and entertainment expenses that exceed the ordinary business practice. Sector specific legislation regulating this aspect also exists, such as the Act of 25 March 1964 regarding the pharmaceutical products.
As explained in Answer 3, hospitality, travel and entertainment may fall within the definition of bribery under Japanese laws. However, laws that regulate bribery, including the Penal Code, do not set quantitative or qualitative limitations on hospitality, travel or entertainment expenses.
In addition, the National Public Service Ethics Act and regulations issued thereunder place restrictions on national public officials regarding hospitality, travel and entertainment. For example, such officials may not receive entertainment or treats from interested parties or travel (excluding business travel for public service purposes) with interested parties.
There is no law that places any restrictions on hospitality, travel and entertainment expenses. In addition, there are no specific regulations restricting such expenses for foreign public officials.
The FCPA applies to bribes relayed by means of ‘anything of value’, including hospitality, travel and entertainment expenses if provided corruptly to a foreign public official to influence or induce such official to take an official action (or omit to take an official action) and seek to obtain or retain business. See question 3. The FCPA does not place dollar limits on such expenses; however, the DOJ and SEC issued guidelines on this topic in A Resource Guide to the U.S. Foreign Corrupt Practices Act [2012, updated 2015], which states that hospitality, travel and entertainment expenses of nominal value, such as cab fare, reasonable meals and entertainment expenses, ‘are unlikely to improperly influence an official, and, as a result, are not, without more, items that have resulted in enforcement action by DOJ or SEC’. Large and extravagant expenses, however, may, according to the Resource Guide, indicate a corrupt purpose.
There are no specific provisions regarding hospitality, travel and entertainment expenses nor any exception allowing such expenses; therefore, pursuant to Article 66 of the LGRA and Article 222 of the CPF, those concepts would be considered as bribery, to the extent the corresponding conduct meets the requirements to fall within the scope of such criminal offence.
Regarding the provision of gifts and business courtesies to public officials in Brazil, the laws and rules are not clear or restrictive. However, many Brazilian companies, adopting a conservative approach, follow the rules and guidelines regarding gifts and business courtesies set forth in the High Administration Code of Conduct, which applies to the most senior public officials in Brazil as detailed below.
Hospitality, travel and entertainment expenses are only permissible where they are of token value, such as a thank you gift for an appearance or attendance at an event. In this case, they are considered de minimus and just a normal courtesy (Field v R  NZSC 129).
Specifically in the case of foreign pubic officials, benefits can be given or offered but only when ‘committed for the sole or primary purpose of ensuring or expediting the performance by a foreign public official of a routine government action and the value of the benefit is small.’ (Crimes Act, section 105C(3)). A ‘routine government action’ is defined to include any decision about whether to award new business or whether to continue existing business, or the terms of new or existing business. The exception does not apply, however, to any action that provides either an undue material benefit to the person offering the benefit, or an undue material disadvantage to any other person.
Note that the above exception does not apply to New Zealand public officials, although the common law de minimus defence will.
Depending on the circumstances, such expenses may fall within the scope of the Criminal Code’s bribery provisions, especially for public officials. There is no specific regulation in relation to foreign public officials, however, the Criminal Code’s bribery provisions apply to Danish and foreign public officials alike. It has been recognised in practice that certain, smaller, gifts and expenses are excluded from the scope of sections 122 and 144.
Some guidance is given by the Ombudsman who has made several observations on gifts and hospitality. As a rule of thumb, a Danish public official may not accept any gifts or benefits (must be understood in a broad sense), although under certain circumstances modest gifts may be acceptable. As for invitations to attend concerts, dinners, etc., the Ombudsman has opined that invitations, etc. must be assessed on a case-by-case basis.
In relation to the private sector, there is no general restriction on such expenses beyond the general scope of section 299(2) on corruption.
According to the national regulation, there is no legal definition of the undue benefits, therefore their analysis and appreciation will be carried out by the court, based on the documents of the case.
Considering that according to the national law it is forbidden to solicit or receive undue benefits or accepts a promise of such benefits, in exchange for performing, not performing, speeding up or delaying the performance of an action which falls under purview of their professional duties or with respect to the performance of an action contrary to their professional duties, the law not embodying a legal definition of the undue, hospitality, travel and entertainment expenses may be implicitly restricted by the law.
Thus, in the interpretation of the law, hospitality, travel and entertainment expenses may represent a bribe in case they are offered to a public official or private person, considering that all the other incrimination conditions are met.
There are no specific restrictions placed on the provision of hospitality, travel and entertainment expenses per se.
However, careful consideration should be given before providing any hospitality, travel or entertainment to domestic public officials. This is since, under section 8 of the PCA, any gratification given to public officials will be presumed to have been given corruptly unless proven otherwise.
There are no explicit equivalent restrictions in the context of foreign public officials. However, the general prohibition of bribery under sections 5 and 6 of the PCA applies.
There are numerous administrative laws in place that limit expenses for hospitality, travel and entertainment for Swiss officials. They remain largely unharmonized, however. No such regulations are in place for foreign public officials, but foreign laws may provide for such rules, and the Swiss courts would examine any such expenses from the viewpoint of their likelihood to unduly influence the foreign public official.
Corporate hospitality will only amount to one of the general offences if there is improper conduct on the part of the person bribing or being bribed. If the act of hospitality is routine and inexpensive, it is unlikely to amount to a breach of an expectation of good faith, impartiality or trust.
The UK government has confirmed that legislation should not be used to penalise legitimate and proportionate hospitality, including in respect of foreign public officials, but its view is that hospitality is also an issue best considered by prosecutors rather than by Parliament.
Gifts, travel expenses, meals and entertainment may constitute an award, advantage or benefit in contravention of the CFPOA or the Criminal Code. Whether such expenses are acceptable or not is assessed on a case by case basis. As there is no government-issued guidance available for acceptable gifts and hospitality under Canadian law, the threshold benefit remains unclear. While the amount of a gift or payment is often considered when determining whether it was given for the purpose of a bribe, there is no de minimis threshold for a bribe under the legislation.
The CFPOA provides an exemption from an offence where the loan, reward, advantage or benefit was provided to pay reasonable expenses incurred in good faith by or on behalf of a foreign public official and the expenses were incurred related to promotion of the accused’s products and services or the execution or performance of a contract between the accused and the official. Expenses incurred for the purpose of demonstrating, promoting or explaining products, or executing or performing obligations of a contract formed with a foreign government will generally be permissible. However, entertainment of other similar expenses may not qualify for the exemption.
Conversely, the Criminal Code does not contain any comparable exceptions and courts have found that an advantage or benefit under that legislation may include such gifts. The courts have been clear that the size of the gift is a crucial indicator of whether it should be perceived as an advantage or benefit, such that a trivial gift would likely not constitute a benefit for the purposes of the code (R v. Hinchey, 3 S.C.R. 1128 (SCC), at para 68).
Codes of conduct applicable to public officials in provincial and federal jurisdictions also shed some light on the matter. For example, the federal government’s Policy on Conflict of Interest and Post-employment holds that gifts must be ‘infrequent and of minimal value, within the normal standards of courtesy or protocol, arise out of activities or events related to the official duties of the public servant concerned’ and not ‘compromise or appear to compromise the integrity of the public servant concerned or of his or her organisation’. However, these policies are binding on government officials and employees not the actual giver of any gift or hospitality. Resultingly, the exact threshold for what benefit constitutes a bribe remains unclear.
The difference between being unacceptable or acceptable in terms of hospitality, travel and entertainment expenses is whether such equities are perceived as compensation for the performance of public duties or not.
What can be seen as an illicit deal (a bribe) depends on the context, the amount involved or any other circumstances that might be relevant in the case.
The promotion of a good relationship throughout simple acts of courtesy that cannot in any way influence the public official’s activity is not criminally relevant.
There is a general regime that regulates gifts giving to public officials (including hospitality and entertainment expenses) and a specific framework regulating travel and lodging.
Public Ethics Act, No. 25188 establishes a general prohibition for public officials to accept gifts given in relation to their public functions, unless they were given out of courtesy or diplomatic custom.
Article 2 of said Act establishes that all persons performing public functions at all levels and hierarchies, permanently or temporarily, by election, direct appointment, competition or any other legal means, including all state magistrates, officials and employees must refuse any improper personal benefit derived of the realization, delay or abstention from an act inherent to his/her functions, or imposing special conditions deriving on a benefit.
Furthermore, Article 18 of the Act provides that public officials may not receive presents, gifts, or donations, whether of things, services or assets, in return for performance of their duties or in the course thereof. Should the gifts be given out of courtesy or diplomatic custom, the enforcement authority shall draw up rules on their registration and on the cases and manner in which they should become the property of the State, in order to be allocated for use in the areas of health, welfare, and education, or to be made part of the country's historical and cultural heritage, as appropriate.
Executive Decree 1179/2016 regulates the implementation of Article 18 of the Public Ethics Act. It reiterates the general prohibition for public officials from receiving any gifts, with the exception of those given for reasons of courtesy or diplomatic custom. Courtesy is defined as “demonstrations or acts which manifest the attention, respect or affection that one person has in regard to another on the occasion of events in which it is habitual to give [gifts]”. Diplomatic custom signifies, “protocol recognitions received from governments, international organisms or non-profit entities, under the conditions in which the Law or the official custom admit these benefits.”
The acceptance of any gift, even those given out of courtesy or diplomatic custom, is banned when they come from a forbidden source. Forbidden sources are:
a. Any person or entity carrying out activities regulated or controlled by the State agency or entity in which the public official is acting;
b. Any person or entity managing or exploiting concessions, authorizations, privileges or customs duty exemptions granted by the agency or entity in which the public official is acting;
c. Any person or entity who is a contractor or supplier of works, goods or services to the agency or entity in which the public official is acting;
d. Any person or entity requesting a decision or action from the agency or entity in which the public official is acting;
e. Any person or entity that has interests which could be significantly affected by a decision, action, delay or omission of the agency or entity in which the public official is acting (Decree 1179/2016, Article 4).
There is only one scenario in which gifts given out of courtesy or diplomatic custom by a forbidden source are allowed -when they are given “during an official visit, event or public activity, a situation the reasonableness of which shall be assessed in light of the competence, powers and responsibilities of each public official.” (Decree 1179/2016, article 4, last paragraph).
Decree 1179/2016 also regulates travel and lodging expenses. Public officials may only accept the payment of travel expenses by third parties in order to participate in conferences, courses or academic activities; only when the financing originates from governments, entities, natural or legal persons that are not forbidden sources; and only when doing so is not incompatible with their public functions.
All permissible gifts and travel must be registered in the Registry of Gifts to Public Officials (including things, donations, benefits, or rewards). The Anticorruption Office’s Resolution 18 E/2017 regulated the Gifts and Travel Registry. The public official receiving the gift must file an electronic form describing the gift´s characteristics (e.g. the exception—either courtesy or diplomatic custom—allowing it, its type, and its value),the details of the public officer receiving it (e.g. name, jurisdiction, hierarchy, function, etc.), the destination that the gift will have (e.g. education, public health, etc.), the circumstances in which the gift was given (e.g. official activity, public officer’s office) and information about the person or company making the gift. In the case of public officials’ travels paid by third parties, the public official must inform the dates and destination of the travel, who is paying for the trip, details of the event to which he/she is invited, and his/her role during the event (e.g. attendee, teacher, speaker, etc.). The Gifts and Travel Registry is available here: https://www.argentina.gob.ar/anticorrupcion/obsequiosyviajes
Finally, Decree 1179/2016 also establishes that all gifts that surpass a certain value threshold, currently set in 6,400 Argentine pesos (around USD 140, at the May 2019 official exchange rate) must be incorporated by the public official that received them to the State’s property, unless they are edible. Gifts received out of diplomatic custom that do not exceed this value must as well be incorporated to State property when they possess institutional value.