Hard to believe, but it is almost that time of year again. Several important holidays are just around the corner including Diwali (1 November), Christmas (25 December), Hanukkah (25 December – 2 January), Lunar New Year (29 January 2025), and Eid al-Fitr (30 March 2025). Each of these holidays involves customary gift-giving. Executives, sales and marketing teams and other departments at companies worldwide, including yours, will prepare for the festivities in their usual way by ordering gifts to be distributed to clients, customers and business partners.
In fact, they may order even more than last year. According to some research polls, corporate gift giving increased by as much as 60% during the pandemic. Companies were eager to maintain strong business relationships in those fully remote WFH times, and the trend has not slowed in our brave new hybrid-working world. Compliance Officers naturally want to stay ahead of the risk that gift-giving presents (yes, pun intended). Here are three suggestions to help:
Send a Policy Reminder. Now, before the gifts are ordered, is the time to remind employees about the company’s gifts, entertainment & hospitality policy. Work with your senior leaders to send an email alert to their teams clearly stating the policy’s gift amount limits and approval process, to use the automated gift clearance system (if you have one), and to contact Compliance if any government official or agency is on the recipient list. An email (that you help ghostwrite) sent by the regional, country or department leader should get the attention of employees this topic deserves. The email sets an ethical tone from the top and serves up bite-size training – a win-win for compliance.
Confirm the Gifts and Recipient Lists. Visibility into and an ability to approve (or not) the planned gifts and recipient list(s) by way of an automated gift clearance system can be ideal, so long as employees use it. Many companies do not have such a system, and if that describes your company then walk both the carpeted and digital hallways to confer with managers who order or approve gifts to get the detail you need to evaluate the risk. If you hear crickets or are not confident about the data you are receiving, ask the procurement or accounts-payable teams what’s been ordered and by whom.
Focus on Government Officials. It will not come as a surprise that some of the planned gift recipients are government officials. From your internal client’s perspective government clients and customers should be shown the same appreciation as others. You can’t really argue with that. Well, unless your company policy prohibits providing gifts to any government official under any circumstance. The relevant guidance from UK and U.S. enforcement agencies, however, does not completely prohibit holiday gifts to government officials. The Serious Fraud Office (SFO) announces a commonsense approach on its website: “Bona fide hospitality or promotional or other legitimate business expenditure is recognised as an established and important part of doing business.” Also, the FCPA Resource Guide (second ed.) states that providing small gifts to government officials is appropriate “when the gift is given openly and transparently, properly recorded in the giver’s books and records, provided only to reflect esteem or gratitude, and permitted under local law.”
If your company policy allows gifts to government officials, take these precautions:
Check Local Law. Check restrictions under the law of the country where the government official is from to ensure she legally may accept a gift. TRACE members have free access via the Resource Center to ‘Gifts & Hospitality Guides’ for 138 countries. These are authored by local TRACE partner law firms and updated annually. Each Guide answers key questions such as “Are there any restrictions on the value of gifts that can be given to government officials?” Otherwise, check with of your company’s usual outside counsel for that jurisdiction to ensure that a gift may be accepted and any limitations under local law.
Timing is Everything. . . in love, comedy, and even gifting. To avoid any appearance of impropriety, if any part of your company (i) currently is in negotiation with a government client or customer on a specific transaction or (ii) recently has received a benefit from a government official or agency, then gifts should not be provided on the upcoming holiday to such government official(s).
Spread the Joy. Address the gift to the government office, not the top person. A gift that can be shared amongst several people is best. Everyone loves holiday sweets.
Sameness is Good. Check that government gift recipients are not receiving a gift that is more elaborate or of higher value than other company gift recipients will receive.
An Accompanying Statement. No, not an audit opinion letter! A card or other communication included with the gift should convey only best wishes for the holiday and gratitude for their partnership generally. Ask employees to avoid referring to a specific transaction or other matter with the government agency.
Record Accurately. Of course, any expenditures on gifts must be recorded accurately so they truthfully and fairly “reflect the transactions and dispositions of the assets of the issuer.” 15 U.S.C. § 78m(b)(2)(A)(the FCPA’s ‘books and records’ provision).
The above steps will help protect your company from any gift-giving missteps. You might even choose to save a link to this post in your calendar so that it pops up on this date (or sooner) next year as a reminder to prepare. Ideally, the above steps will save you time that is better spent with family and friends on whichever holidays you celebrate!
General Counsel
In honor of National Whistleblower Appreciation Day, it’s important to take a look at the extensive history that whistleblowing has within the United States, and the implications that this courageous and critical role will have for bad actors.
In 1777, naval officers Samuel Shaw and Richard Marven reported their commanding officer, Commodore Esek Hopkins for torturing British prisoners of war. Hopkins retaliated against the two by dismissing them from the Navy and filed a criminal libel suit against them. They were arrested and awaiting their trial when Congress ultimately intervened and unanimously enacted the Whistleblower Protection Act in 1778. Congress authorized a financial reward for the two men and ordered that Hopkins be fired. Shaw and Marven eventually won the lawsuit.
In 1961, when the American Civil War broke out, it was evident that fraud was rampant in the country, both on the Union and Confederate sides. Contractors knowingly sold faulty rifles, unfit horses, and rotten food to soldiers. To address the issue, Congress passed the False Claims Act, informally known as the Lincoln Law, on 2 March, 1863. It included a qui tam provision, which allowed citizens to sue others on behalf of the government, thereby earning a fraction of the damages. Additionally, the False Claims Act provides protection from employer retaliation and provides relief to any whistleblowers.
Since then, whistleblowers have been active across the country, from Frank Serpico calling out NYPD corruption in the 60s and 70s, to Edward Snowden leaking information about the NSA’s activity regarding data privacy and protection in 2013. Snowden’s actions in particular spurred Congressional action that led to National Whistleblower Appreciation Day.
In more recent news, Donald Trump, the official candidate for the Republican Party, was impeached while in office, with the proceedings stemming from a whistleblower’s actions. The whistleblower complained that Trump used “the power of his office to solicit interference from a foreign country in the US 2020 election”. Without this complaint from a whistleblower in the intelligence community, it would have been nearly impossible to challenge the conduct of one of the most powerful heads of state.
On July 30th, 2015, National Whistleblower Appreciation Day was born to honor the day, 30 July, 1778, when Congress passed the Whistleblower Protection Act. Each year since 2013, both the United States Senate and the House of Representatives pass resolutions that designate 30 July as National Whistleblower Appreciation Day. In fact, in 2021, over 10,000 people attended the virtual celebration, which spanned over three days. Whistleblowing is a career-limiting act, especially in the federal space, so it’s important to acknowledge and appreciate the sacrifices they make to put a spotlight on bad actors.
In the international corporate world, whistleblowing is a way to hold companies accountable for possible FCPA violations. The United States Securities and Exchange Commission, and the United States Department of Justice have launched programs to encourage whistleblower activity. Beginning in 2012, the SEC has provided whistleblowers with the SEC Whistleblower Program, and since its launch, the program has awarded hundreds of millions of dollars in whistleblower awards. In fact, on 5 May 2023, the SEC issued the largest whistleblower award to date, $279 million, over Ericsson’s violation of the FCPA by bribing government officials and falsifying company records.
On 22 April, 2024, the DOJ announced a pilot program designed for individuals to disclose wrongdoing, allowing the government to investigate, identify, and prosecute the culpable individuals responsible for corporate misconduct.
The role that whistleblowers play will continue to change the compliance landscape. With more governments and enforcement agencies recognizing the importance of whistleblower protections, the hope is that, as time passes, more and more individuals will feel empowered to speak up against misconduct and hold corrupt leaders accountable – furthering the goal of international transparency, cooperation, and good governance.
J.D. Candidate, The George Washington University Law School, Class of 2026
It is an exciting time for the world of sports. As the UEFA European Championships of Soccer kicks off, famous footballers take the stage to compete on behalf of their respective countries, while avid sports fans from all over the world anxiously await the Opening Ceremonies for the Summer Olympics in Paris next month.
Still, amidst all this excitement there remains a concern regarding Russian athletes. The World Anti-Doping Agency (WADA) has raised skepticism over Russia's anti-doping practices in the past, causing concern of fair competition. But more recently, given current geopolitical issues, namely the war in Ukraine, Russian competitors will be at the Games as “neutral” athletes, banned from competing under the Russian flag.
Additionally, in recent months, there have been several stories released about threats of violence at the Paris Games, concern over the validity of the International Olympic Committee (IOC), and overall distrust of the Western world and its institutions.
All of these stories appear to have one thing in common: they were developed and disseminated by Russian actors who are attempting to sow discord at the Olympics as a means to punish those involved with banning Russia from the competition.
A group dubbed “Storm 1679” has created a fake Netflix documentary, Olympics Has Fallen, using AI tools to mimic the voice of actor Tom Cruise and creating fake 5-star reviews to besmirch the members of the IOC, and the overall integrity of the Olympics.
It seems when Russia is unable to compete in the Olympics, it turns to degrading the games in an attempt to sour the event. When we reflect on the 1984 Summer Games, the Soviet Union boycotted the games and asked other countries to do the same, again in an attempt to discredit the competition.
The message, however, remains clear: if Russia cannot be seen as a world leader, then the institutions making that claim (or any claim against Russia for that matter!) must be weakened. And while this is a typical message from Russia —where dissidents are jailed, and even killed—with new technology, like AI and “deepfakes," it is becoming increasingly difficult to see what is information, and disinformation.
Nevertheless, we cannot allow the bad actions of one to degrade the hard work of many. The world looks forward to the healthy competition— seeing in action the best of their nation competing on the world’s stage. As global citizens we must remain ever vigilant. For many, sports are the purest form of competition. Current events remain an unfortunate reminder that even sports at the global level can breed political mistrust and corruption if not monitored and regulated appropriately.
“Citius, Altius, Fortius – Communiter” and “Faster, Higher, Stronger – Together”
Blaise Stanicic
Associate Director, Compliance Training, TRACE