As the festive season approaches and another year draws to a close, we are reaching the time when traditionally firms are more likely to offer – or be offered – gifts and/or hospitality in recognition of the relationships that have been formed between them. This might be a reward from a supplier for the volume of new business transacted, or a gesture to a valued client in recognition of their continued loyalty and custom. Whichever situation you are in, it is important to retain a clear head and keep such offers in perspective.
The Bribery Act 2010 makes it clear that all firms have a duty to prevent bribery and must take reasonable steps to prevent the firm being exposed.
By having a Bribery policy, with appropriate limits and a robust review and reporting mechanism, you will be able to demonstrate that this matter is being taken seriously. The FCA has the strategic objective of ‘ensuring that the relevant markets function well’ and preventing financial crime is therefore a priority. Firms must be able to show that they are assisting the FCA with its objectives.
A Gift and Hospitality Register enables firms to keep track of what has been offered to/by individuals in the firm and also helps them spot any trends or issues which can then be investigated, so hopefully reducing their exposure. The register will apply to all people within the firm, from the receptionist right through to directors.
Depending on the type and size of your firm, a de minimis limit will be set, representing the minimum value of a gift that must be declared in the register. Typically, this will be around £20, meaning that gifts worth less than £20 do not have to be declared and added to the register – although you may still choose to do so. However, some firms require all gifts to be declared, regardless of value.
A pattern of low-value, small gifts can highlight a potential risk to your firm in just the same way as larger, less frequent gifts. If something is offered on a regular basis, it may be wise to err on the side of caution and declare it, even if it is lower than the de minimis limit defined by your firm.
Often firms will require you to seek approval before offering or accepting gifts or hospitality – it is important that you are aware of any specific requirements that affect your role, and ensure that you abide by the rules.
You should always refer to your manager or HR department if you are unsure.
You may also be required to make “nil” returns – or let your manager know/record on the register for your firm that you have not made/received any offers within a specific time period. This process acts as a sort of safety net to ensure that everyone is prompted to update the register regularly, and to minimise the risk of misinterpretation of the information recorded – it provides a clear difference between forgetting to declare items (and leaving a gap) and positively stating that there is nothing to be declared (a “nil” return) for a period.
The process of maintaining a Gift and Hospitality register does not have to be onerous, and the Development Zone incorporates a simple module that can be used and configured to meet the needs of your firm. If your firm could benefit from support creating a Gift and Hospitality Register and you haven’t used the Gift and Hospitality module before, we recommend that you visit the DevZone Academy (via the Support option on every page) to find out more.