Passive bribery and bribery
Setting limits
Benefits granted to public officials
Comment
Despite strict compliance regulations, it is customary to offer small gifts of friendship and entertainment to business partners, especially at Christmas. Successful collaboration is based on personal trust and appreciation. However, caution is required – non-compliance may have labour and criminal law consequences and could even lead to dismissal.
It is a criminal act for an employee or company representative to demand or accept a benefit in the course of business for himself, herself or a third party as consideration for giving unfair preference to another in the procurement of goods and services in domestic or foreign competition. It is a breach of the employee's or representative's company duties. This primarily protects free competition, but also the businessperson's assets.
Benefits are not limited to money. Favours may also constitute a criminal offence if its perceived value is disproportionate – for example, if a business partner's child is offered an internship despite lacking the necessary qualifications. This is intended to avoid even the pretence of bribery, whereby the secrecy of the benefit is only an indication of inadmissibility. Cheques or cash should never be given as gifts, as it could suggest an impression of corruptibility. Gifts must always be declined if they are offered close to the date on which a transaction is concluded. For example, a bank employee who has received a gift from a customer could be suspected of not dutifully examining the creditworthiness of that customer when issuing a loan. Both the borrower and the bank employee would risk criminal liability. The bank employee must also expect to be dismissed without notice.
Judges and the legislature are aware that not all benefits constitute a criminal act. Benefits which are in accordance with common practice are permitted. Small gifts of up to €35 can be given with a clear conscience. However, boundaries are unclear. Therefore, a small gift of €50 to an employee with a monthly income of €2,000 may be seen as an attempt to influence the employee, while a €500 gift to an executive director of a DAX company may be seen as quite safe. One crucial factor is whether the recipient is easily able to afford the gift himself or herself.
There may be an impression of bribery if, by accepting the gift, the employee becomes involved in a conflict of interests or his or her judgement is impaired. An indication of common practice may also be that the gift is connected to the recipient's work. Such gifts are permitted. For example, an expensive textbook providing professional know-how may be given as a gift. Gifts which benefit the entire staff are also permitted.
Even if secrecy of the benefit is not a legal requirement, bribery is deemed a secret act. Therefore, it is recommended that both donor and recipient always consult with the management, compliance or legal department and report any benefits. However, with reference to the company's internal rules, the recipient may accept a gift and, for example, enter it into the company's Christmas raffle. Labour law consequences may ensue irrespective of criminal liability if there is a breach of corporate compliance rules.
Benefits granted to public officials
The law is even stricter on benefits granted to public officials, and particular caution is required. As a rule, public officials and public-sector employees may not even accept gifts of €35, as the impression that public officials may be bribed must be avoided. Such benefits or larger gifts must be declined or passed to the employer.
Under criminal law, there are no objections to the common practice of offering small gifts on certain occasions. To avoid the impression of passive bribery or bribery, employees either giving or receiving gifts should consult the company's compliance regulations.
For further information on this topic please contact Daniel Kaiser or Björn Demuth at CMS Hasche Sigle by telephone (+49 711 97 64 0) or email ([email protected] or [email protected]). The CMS Hasche Sigle website can be accessed at www.cms-hs.com.