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
Hospitality, travel and entertainment expenses can come within the meaning of 'benefit' for the purposes of a bribery offence, although Australian law does not specify any specific quantitative restrictions on such expenses. Some domestic government departments or other state authorities have guidelines for their own personnel to comply with relating to the acceptance of hospitality, travel and entertainment.
Prescribed limitations on the value of benefits (such as hospitality, travel and entertainment) that may be given to persons performing public functions are only included in the Polish Pharmaceutical Law, which allows giving or accepting items with a value under PLN 100 and relevant to the practice of medicine or pharmacy, bearing a mark advertising a given firm or medicinal product.
Other than that the above, there are no generally prescribed limitations on the value of benefits (such as hospitality, gifts, travel and entertainment) that may be given to public officials. However, according to legal scholars and case law in some situations custom may constitute a defence against criminal liability for the offence of corruption in the public sector. Therefore, small customary gifts for public officials may be considered permitted. Essentially, this may be the case when the giving of such gifts/hospitality is: (i) customary and socially accepted as a gesture of courtesy; (ii) of small value; and (iii) provided as an expression of gratitude, i.e. after a given service/transaction with a person holding a public office has been completed and assuming that such gift/entertainment was not promised, suggested or expected in relation to the service/transaction in question.
At the same time, there is no clear boundary in the provisions of law, case law or views of legal scholars between a small socially acceptable gift and active bribery.
The Prevention of Corruption Act and the Criminal Justice (Theft and Fraud Offences) Act 2001 do not take the value or type of gift, consideration or advantage into account when determining if an offence has been committed. Such gifts will fall within the scope of the legislation if provided ‘corruptly’.
Separately, the Ethics in Public Office Act 1995 creates an obligation on certain categories of public office holders to furnish an annual statement of registrable interests disclosing certain travel facilities, living accommodation, meals or entertainment worth more than €650 and received outside the State.
No. Brazilian laws and regulations do not provide any restrictions on hospitality, travel and entertainment expenses, nor there are any specific regulations restricting such expenses for foreign public officials.
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.
Yes, the law does place restrictions on hospitality, travel and entertainment expenses. There are also specific regulations restricting such expenses for foreign public officials.
Article 234 and article 237 of the code punishes the acceptor of a bribe, the offeror of the bribe or intermediary as well as regulates the acceptance of any benefits.
Article 234 of the code states as follows:
“Any public servant or person entrusted with a public service, a foreign public servant or an employee of an international organisation who requests or accepts, whether directly or indirectly, a gift, benefit or other grant that is not due, or is promised the same; whether to the benefit of the employee himself or for another entity or establishment, in order for such employee to commit or omit an act included in his duties even if he has intended not to commit or omit such act, or if the request, acceptance or promise is made after the fulfilment or omission of such act, shall be sentenced to temporary imprisonment.”
Article 237 states as follows:
“Any person who promises, offers or gives a public servant or a person entrusted with a public service, a foreign public servant or an employee of an international organisation, a gift, benefit or grant that is not due, either directly or indirectly, whether to the benefit of the employee himself or for another person or entity, for such employee to commit or omit an act included in his duties, shall be sentenced to imprisonment for no more than five years”
Article 237 bis states as follows
“Any person who promises, offers, grants or gives, either directly or indirectly, a public servant or any other person, a gift, benefit or grant that is not due, to abet that public officer or person to abuse his power, whether actual or presumed, to obtain, from a public department of authority, an unlawful benefit for the benefit of the original abettor of such act or for the benefit of any other person.
Any public servant or any other person who requests or accepts a benefit, gift or grant that is not due, whether for himself or for another person, either directly or indirectly, so as such public servant or person abuse his power, whether actual or presumed, to obtain, from a public department or authority, that unlawful benefit.”
Finally, Article 237 bis 2 states as follows
“An intermediary between the briber and a bribe-taker to offer, request, accept, take a briber or any promise thereof shall be sentenced to imprisonment for no more than five years.
As you can note from the above code, it is clearly prohibited for public officials, whether foreign or local, to accept any form of hospitality, travel and entertainment expenses of any other kind."
Any gifts that are of a symbolic nature or promotional material must have the “gifters” logo on the material.
There are no specific restrictions placed on the provision of hospitality, travel and entertainment expenses per se. That said, under section 8 of the PCA any gratification given to any domestic government employee or employee of a public body by a person seeking to have dealings with the relevant government department or public body, will be presumed to have been given corruptly. This presumption can be rebutted in court if it can be shown that there was no corrupt intent. However, the evidential burden to rebut the presumption of corruption will be on the individuals suspected of bribery. Careful consideration should therefore be given before providing any hospitality, travel or entertainment to domestic public officials.
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 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.
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.
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 PCA, any public servant accepting or attempting to accept any form of illegal gratification as a reward for doing or forbearing to do an official act is an offence. The Act specifically explains that the term ‘gratification’ is not restricted to pecuniary gratifications or to gratifications estimable in money.
In addition to the specific provisions of PCA, public servants are also governed by their rules of service stipulated in the Central Civil Services (Conduct) Rules 1964 and the All India Services (Conduct) Rules 1968. These Rules prohibit a government servant or any member of his or her family or any other person acting on his or her behalf to accept gifts which include services like free transport, boarding, lodging or other hospitality services. In case such gifts are accepted by a government servant in conformity with any prevailing religious and social practice, then the official is duty bound to report the same to the Government. These Rules lay monetary thresholds for certain public servants regarding the acceptance of gifts, business courtesies and hospitality received in accordance with prevailing religious or social practice.
According to the LCMLO, gifts and hospitality may amount to an undue advantage (“vantagem indevida”). Any public official who, in the exercise of his public office functions or because of them, personally or through a third party, with their consent or ratification, requests or accepts, for himself or for a third party, an advantage (for value / in kind or not) which is not due (and this includes hospitality, travel and entertainment expenses) will be committing the crime of receiving an undue advantage .
The law excludes from the scope of this crime any socially adequate conduct consistent with habits and customs.
The term “undue advantage” is used in the law to characterize any benefit granted and it can include facilitation payments, gifts and hospitality and, therefore, their request or acceptance or on the other hand, their offer or promise to offer even where not in consideration for any act or omission, may constitute a crime of undue receipt as set forth in Articles 372 of the Penal Code and 16 of Law no. 34/87.
A conduct deemed as socially appropriate and consistent with customs and practice is excluded from this legal framework.
Reasonable criteria must be used when assessing each situation, taking into account the specific case, and in particular, the sector under consideration, the context and the parties involved.
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.
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.
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.
Macao’s legal system does not provide a specific rule to regulate facilitation payments, gifts and hospitality, for the purposes of corruption crimes.
As seen in the reply to the previous question, the concept of undue advantage is used in the rules that forbid corruption practices, to characterise any benefit awarded to the civil servant, to the worker of the private sector or to foreign civil servants, and this concept does not exclude facilitation payments, gifts and hospitality; therefore, requesting or accepting the same, or, on the other hand, offering or promising to offer as consideration for a certain action or omission, may constitute both passive and active corruption crimes.
However, the concept of undue advantage excludes the benefits offered or promised that must be deemed socially appropriate and in accordance with the habits and customs; furthermore, in case of civil servants, the CCAC Guidelines establish that such gifts must be reported to the hierarchical superior.
It should also be noted that contrary to the Portuguese regime, the legal system of Macao does not provide the crime of undue receipt of advantage. Therefore, the simple act of accepting or offering an undue advantage, where said advantage does not have in view the carrying out of an action or an omission, does not constitute a crime.
HRA: Bribery and corruption crimes are established with reference to “patrimonial or non-patrimonial advantages which are not due”. The term "undue advantages" also covers the facilitation of payments, granting gifts and hospitality. Thus, an official who, in the exercise of his functions or because of them, by himself or by interposed person, with his consent or ratification, requests or accepts, for himself or for third parties, patrimonial or non-patrimonial advantages which are not due (in which we can include hospitality, travel and entertainment expenses), is incurring in the crime of acceptance of an offer or promise, provided for in Article 509 of the Criminal Code.
Under the Ethics Code, public officials are basically prohibited from accepting hospitality and entertainment. Under the UCPA, a natural person is prohibited from giving hospitality and entertainment to foreign public officials.
The law doesn’t place specific restrictions on hospitality, travel and entertainment expenses. According to the Sapin II Act, each company must be vigilant with regard to these situations. According to the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions signed in Paris on 17 December 1997, 10 years' imprisonment and a fine of 150,000 euros shall be imposed for offering, directly or indirectly, without any approval, offers, promises , in order to obtain from a public official of a foreign State (or within a public international organization), whether he performs or refrains from performing an act stemming from his position, assignment or mandate or facilitated by its function, mission or mandate, with a view to obtaining or maintaining a market or other undue advantage in international trade.
The French anti-corruption agency provides that the organisation’s accounting record control policy should also target these operations that it considers especially risky, as determined by its risk mapping.
For example, an organisation can decide to target:
- operations such as donations and bequests, sponsorship and patronage payments,
- commission and fees, entertainment and marketing expenses, and gifts and hospitality,
- atypical transactions such as suspense accounts,
- one-off or high-risk operations such as acquisitions,
- operations involving third-party intermediaries such as agents or consultants, financial or material flows to high-risk accounts or third parties.
The OECD working group in its report on France in 2012 had criticized the very few number of convictions that had been handed down since the transposition by France of the Convention on Combating Bribery of Foreign Public Officials (1997) in International Business Transactions by Act No. 2000-595 enacted on 30 June 2000.
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.
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.