Welcome to Special Episode ofCompliance Man Goes Global podcast of the Compliance Report-International Edition. We will be celebrating Christmas soon. In many countries, on December 31stpeople will be celebrating New Year as well. It is the right time to talk about compliance and gifts giving. We will explore this matter in a plain language so to say and in the simple game form. Moreover, to make the podcast handy and more appealing we attach respective illustration from the Compliance Man illustrated series, created by Timur Khasanov-Batirov.
For those of our listeners who are not aware about our format, in each podcast, we take two typical concepts or more accurately misconceptions from in-house compliance reality. We check out if these concepts work at emerging jurisdictions. For each podcast, we divide roles with Timur, a practitioner who focuses on embedding compliance programs at high-risk markets. One of us will advocate the concept identifying pros. The second compliance man will provide arguments finding cons and trying to convince audience that that we face a pure myth. As a result, we hopefully will be able to come up with some practical solutions for in-house compliance practitioners.
Tom Fox: OK, Tim, let’s get started.
In our corporate policy, it is prescribed that gifts giving is allowed. The main requirement is that gift has to be of modest value.Tim, would you think that this requirement is clear enough for implementing at high risk markets globally?
Tim Khasanov-Batirov: I think it is a vague and non-practical rule:
The cited statement from the corporate policy looks to be a legalized language. From practical prospective being located somewhere in Central Asia there is a challenge for local personnel to interpret this ambiguous “modest value” test.
Even if there is, an extra statement in the corporate policy saying that value of the gift should not exceed rates prescribed by local laws this is still a very non-practical approach. It requires local staff in various locations to research and understand local legislations. This might become a challenge specifically in the cases if there is no local compliance officer, who is in position to provide advice.
Tom Fox: I think, Tim that there are some cons here as well:
When we are talking about global corporations, which operate in dozens of countries it, is difficult to track rates of permitted values for gifts across the globe. Thus, the “modest value” approach serves as a basic principle. You can always use the common-sense test, if a gift seems to be too expensive, it is too expensive. As you note, what might be modest in Moscow, Oslo or New York may be of high value in a west African country.
I would agree with you that organization should tailor the language probably in the local corporate policies identifying rules applicable for each respective country. Moreover, in legislation on gifts giving to PEPs might significantly vary from country to country.
Tim Khasanov-Batirov: Tom, I agree with you. By the way, listeners, as you can see from the attached illustration Compliance Man and Ms. Corporate, congratulate us with the forthcoming holidays reminding us key compliance principles on gifts giving.
Tom: OK, Tim. We can formulate the next concept or maybe misconception in the following way:
We are ethical. In our organization, everybody knows that we are not giving expensive gifts. No need to repeat this mantra for personnel prior to each holiday. Tim, will you agree with this concept?
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