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Rigorous and pragmatic guide of the French Anticorruption Agency’s on Gifts and Hospitality Policy
In September 2020, the French Anti-Corruption Agency (AFA) published its guide “Gifts and Hospitality Policy in Private and Public Sector Corporations and Non-profit,”[1] (Guide) which has been submitted to prior public consultation one year ago.
While the Covid-19 pandemic is having a particularly severe impact on the event industry, the AFA aligns itself with its American[2] and British[3] counterparts.
It should be noted that the Guide is not legally binding. This is important since the Conseil d’Etat (the Supreme Administrative Court) considers that recommendations issued by independent administrative authorities can be contested if their impact goes beyond mere recommendation[4]. It is questionable whether this case law applies to the AFA since the latter is an agency within the Ministry of Finance. It is more likely that the non-binding character of the Guide simply means that a company that does not strictly adhere to the wording of the AFA’s recommendations is not necessarily in breach of the French Anti-Corruption law. This flexibility can only be welcomed.
The legitimate concerns raised by the draft submitted to public consultation
The draft Guide, which has been submitted to public consultation, raised concerns among the event industry since it did not take into account their business model based on hospitality programs and sponsorship contracts. Cultural and sports events are forming an important part of the French national identity. They are both a source of the country's attractiveness and conviviality in the context of business relationships.
This was not reflected in the draft Guide which had rather repressive than preventive character. Indeed, its first pages provided a list of criminal penalties for corruption. Moreover, the draft Guide prohibited invitations to weekend events whereas it is common practice to invite foreign officials to cultural or sports events during the weekend. Only gifts of “nominal value, i.e. of a sufficiently low value not to be perceived as an attempt to corrupt (box of chocolates, office supplies bearing the organisation's logo)” were allowed, which excluded the majority of cultural or sports events.
A balanced tone of the Guide
Following the US[5] and the UK[6] authorities’ recommendations on gifts and hospitality, the AFA publishes a balanced Guide whose tone is significantly different from its initial draft. Indeed, the AFA recognizes that gifts and hospitality are an important part of business relationships. Just like the US DOJ and the UK Ministry of Justice, the AFA underlines in the Guide that “[g]ifts and hospitality are an ordinary part of doing business and do not, in themselves, constitute bribery.” It also emphasizes that “[t]he majority of gifts and hospitality are not bribery, since they are given and accepted out of courtesy or for promotional purposes (maintaining business relationships or seeking to expand a customer base).”
An emphasis on risk management and employees’ training
The AFA emphasizes the need to identify and assess corruption risk: “the organisation identifies and assesses the bribery risk incurred in giving, soliciting or accepting gifts and hospitality, particularly with regard to its risk-prone businesses, locations, processes and functions. The Gifts and Hospitality Policy should be defined to be consistent with the risk map, making it a tool that the organisation can use to manage identified corruption risks.”
In a pragmatic manner, the AFA indicates that the internal rules of each company regarding gifts and hospitality may vary. A notebook – even a luxury brand – with the company's logo does not present the same risk as an emblematic piece from a French manufacturer. In addition, “there may be special rules set for hospitality involving sporting and cultural events,” since the prices of these events can be high.
Since it is prohibited to accept luxury gifts, the AFA emphasizes the need of employees’ training: “[f]or employees working abroad, if the Gifts and Hospitality Policy is contrary to certain local practices, the training may recommend special action to avoid offending the other party.” Indeed, the risk management at all levels of business organization implies the need for training.
Effective management of these risks demands a global approach which excludes employees operating in silos. As pointed out in the Guide, the Gifts and Hospitality Policy should be linked with the Code of Conduct and other internal procedures. Risk management also means internal controls. The AFA's recommendations regarding internal control are therefore valid for all corruption risks, and not only those related to gifts and hospitality. The management of these risks should involve not only managers of each business unit, but also accounting, second-level control, internal audit; compliance and legal departments whose joint work is crucial.
In addition, companies should establish monitoring system ensuring compliance with the Gifts and Hospitality Policy. This system should allow the traceability of accepted or offered gifts and hospitality and ensure that sanctions are imposed for non-compliance with this policy.
Recourse to the method of faisceau d’indices (bundled indicators) to identify gifts and hospitality presenting corruption risks
In order to identify gifts and hospitality presenting corruption risks, the AFA abandons the recourse to a ceiling on expenditure that was used in the draft Guide. Instead, the AFA recommends the method of faisceau d’indices (bundled indicators): “A criminal court judge looks at a body of evidence to see if offering or accepting a gift or hospitality may constitute a case of bribery. The judge considers the purpose of the gift or hospitality, its value and its frequency. This evidence consists of substantive elements that organisations may consider when defining their gifts and hospitality policies.” One should also take into account the timing of a gift or hospitality. For instance, the gift from a potential supplier participating in the call for tender presents an important risk.
The Guide demonstrates the AFA's willingness to consult and accompany companies and marks a turning point. This is reflected in several parts of the Guide, notably when it is stated that “[t]here is nevertheless little risk when gifts and hospitality are provided for professional reasons related to the recipient’s business and are compliant with the organisation’s policies, such as its public relations policy, so that it is clear why they were offered or accepted.”
Key takeaways
• After three years of existence, the AFA fully emplace its role as a national authority whose role is also to advise and help companies in establishing their compliance program.
• Companies are given latitude to design and develop their compliance program, with regard to their business model, provided that they establish an effective risk management system.
• The Guide also underlines the need to ensure that each employee feels responsible for anti-corruption risk management. This implies avoiding any bureaucratic excesses that could prevent compliance programs from being effective.
[1] AFA, Guide on Gifts and Hospitality Policy in Private and Public Sector Corporations and Non-profit, 2020.
[2] US DOJ, A Resource Guide to the U.S. Foreign Corrupt Practices Act, November 14, 2012.
[3] UK Ministry of Justice, The Bribery Act 2010: Guidance about procedures which relevant to commercial organisations can put into place to prevent persons associated with them from bribing, March 30, 2011; SFO, Q&A.
[4] CE, March 21, 2016, No 368082 and No 390023.
[5] DOJ Guide, supra, at 16: “the FCPA does not prohibit gift-giving. Rather, just like its domestic bribery counterparts, the FCPA prohibits the payments of bribes, including those disguised as gifts.”
[6] UK Ministry of Justice’s Guidance, supra, at 12 : “Bona fide hospitality and promotional, or other business expenditure which seeks to improve the image of a commercial organisation, better to present products and services, or establish cordial relations, is recognised as an established and important part of doing business and it is not the intention of the Act to criminalise such behavior.”
[7] DOJ Guide, supra, at 15: “Regardless of size, for a gift or other payment to violate the statute, the payor must have corrupt intent—that is, the intent to improperly influence the government official. The corrupt intent requirement protects companies that engage in the ordinary and legitimate promotion of their businesses while targeting conduct that seeks to improperly induce officials into misusing their positions;” SFO Q&A, supra: “The SFO will prosecute offenders who disguise bribes as business expenditure (hospitality and the like), but only if (a) the case is a serious or complex one that falls within the SFO’s remit and (b) the SFO concludes, applying the Full Code Test, that there is an alleged offender that should be prosecuted.”
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