When are Gifts For Women At Work Not Acceptable or Illegal?
Gift giving in business has been around as long as business itself, and why not? Business is about relationships. Showing appreciation for consideration or a job well done is a necessary way to develop, nurture and maintain relationships over time is as important to business as a marketable product.
Is There a Law about Gifting?
As old as gift giving is, and as important as gift giving is to business, did you know it can also be illegal?
Did you know the United States Government actually passed a law forbidding giving or accepting gifts? Did you know there are rules about getting gifts from foreign governments?
When In Rome…Don’t Give Gifts
It’s been ten years since the Wikileaks releases of 2010. It was then revealed massive gift giving and receiving on the path of US defense contractors in countries like Saudi Arabia.
According to the FCPA or Foreign Corrupt Practices Act, the US Government draws a line when doing business. The line drawn by the United States Government both at home and abroad by laws like the FCPA underlined one thing.
It is important to know the difference between a gift and a bribe.
What is the problem?
In business transactions around the world, the idea of what we would call bribes are as old as the cultures themselves. It is offensive not to offer a gift or percentage of the deal as part of the agreement.
In the Arab world this business arrangement is called backsheesh. For example, the Al Yamamah contract awarded to British Aerospace by Saudi Arabia was one of the largest examples of bribes in history, yet it was all perfectly acceptable in Saudi Culture.
The Difference Between a Gift and a Bribe
Without going into the legal details of the difference between a gift and a bribe, let’s look at two situations.
Example 1: Janet is a retailer doing business with a company in a different city and state than her own that makes women’s shoes.
Sophie, the head of the company making shoes wants to make sure their shoes continue to be prominently displayed in the mall windows of Janet’s retail outlet.
Every year, Sophie sends Janet a gift showing her appreciation in the form of a free time share condominium in Hawaii for Christmas.When Are Gifts For Women At Work Illegal? Click To Tweet
Example 2: Emma is a saleswoman for a medical supply company. For years, she has maintained a lucrative relationship with a number of hospitals.
Recently, a foreign competitor has begun offering her clients cheaper products and services than her company can offer.
In order to keep from losing her clients Emma sends the purchasing officers of the hospitals gifts. She might send tickets to events and other types of social engagements.
These gifts were easily convertible to cash.
It was understood in the case of a termination of their business relationship there would also be a termination of the gifts.
Test Your Gift Giving Knowledge
Can you tell in which instance is the gift being offered legal, or is it a bribe?
Example 1: In the first instance, Janet may have tax issues but her gift from Sophie would not be considered a bribe.
Example 2: In the second instance, the fact the gift is part of the business relationship and is available only to the purchasing officer clearly makes this a bribe.
What Is The General Rule For Doing Business With a US Company?
A gift given in business is a perfect legal way of showing appreciation provided:
It is not based upon a quid pro quo agreement, i.e., I give you this and you give me that.
The simple rule about a gift is that it comes from the heart. Think about a holiday when you give gifts.
When you give and expect nothing in return it’s a ‘gift’.
As long as you follow that rule, the gifts you give will find you somehow.