In a decision made in March 2009, the Hong Kong courts highlighted the importance of adhering to local anti-bribery laws. The defendant, a director of a local construction company called Brilliant Ray (the “Company”), was sentenced to two months’ imprisonment for offering 15 boxes of moon-cakes to police officers with whom he had business dealings. Moon-cakes are traditionally eaten during the Chinese Mid- Autumn Festival.
The Company had been appointed as the construction subcontractor for certain roadworks in Hong Kong. Prior to commencing the work, the Company had to submit notices and obtain approvals from the local Police Traffic Team. Between January and September 2007, the traffic team approved 54 projects to be carried out by the Company, with the defendant acting on behalf of the Company in its dealings with the police.
On 14 September 2007, only 11 days before the Mid-Autumn Festival, the defendant met a police constable at the local station and gave the constable 15 boxes of moon-cakes. A senior inspector later contacted the defendant and returned the moon-cakes.
The defendant pleaded guilty to offering an advantage to prescribed officers contrary to Section 8(1) of the Prevention of Bribery Ordinance.
The court rejected the defendant’s argument that he was ignorant of the law and that he was merely following a Chinese custom appropriate for that time of year.
This case is important because it involves giving a gift of relatively inconsequential value. It is customary in Hong Kong to give moon-cakes to clients, suppliers and third parties in the lead up to the Mid-Autumn Festival. Nevertheless, according to Section 19 of the Prevention of Bribery Ordinance. merely following a custom is not a defence to prosecution.
While the reaction to the severity of the punishment has been one of surprise, compliance experts have stressed the importance of paying attention to local anti-bribery laws and not just focusing on the U.S. Foreign Corrupt Practices Act. They suggest that companies have particular regard to the size and quality of the gift so as to ensure that both are commensurate with the recipient’s stature. Furthermore it has been recommended that companies implement procedures to ensure that employees are aware of anti-bribery laws both in the country of incorporation and in the territory where the gift is to be given.