Alliance: Opportunities and pitfalls of B2B & B2C promotional gifts (not only) at Christmas

The Christmas season – an opportunity used by many companies to distribute promotional gifts – gives rise to the question of legally compliant conduct in connection with giving and receiving gifts.

Promotional gifts are a proven tool for acquiring and retaining customers, both in the B2B and B2C areas. Especially for start-ups and SMEs, promotional gifts can make a significant contribution to making a name for the company and enabling it to grow faster; but established large companies and international corporations also use promotional gifts to maintain their image as well as to remind business partners and customers of their company and products.

Carelessness when giving or choosing promotional gifts is not advisable, however, since one could run the risk of making oneself liable to prosecution under anti-corruption law.

There are different provisions regarding the admissibility of promotional gifts, depending on whether the gift is given to a public official or to an employee of a private company, as well as depending on whether the gift is in connection with the performance of an illegal or dutiful act, or serves to maintain good relations.

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What does anti-corruption criminal law regulate and what is Compliance?

The anti-corruption criminal law is largely regulated in the respective criminal code. The conduct of both the party giving the gift (active corruption) and the party accepting the gift (passive corruption) can be punishable. Even the mere offering and promising – i.e. not only the actual granting and acceptance – of gifts or other improper advantages can be punishable by law.

Within the framework of Compliance, various risks – including corruption – are to be combated in companies. Compliance with applicable laws and ethical standards is to be ensured by both management and employees by means of corporate Compliance guidelines. At the same time, the company can largely protect itself against any consequences under corporate criminal law and the financial damages associated with this through appropriate compliance measures.

Are promotional gifts permitted according to the law or Compliance Guidelines?

Promotional gifts are generally permitted by law, whereby a distinction must be made between the public and the private sector.

(Public) officials – this includes all employees of regional authorities, public companies and all companies and organisations that are audited by the Court of Auditors – are subject to strict limits in terms of the permissibility of accepting benefits (including promotional gifts, if applicable). In the private sector, the limits are not so narrow. Thus, for example, maintaining relations (“sweetening”) is not punishable in the private sector or, if applicable, only in the context of competition law.

In any case, with regard to the admissibility of promotional gifts some general aspects have to be taken into account, such as the following:

  1. The promotional gift must be recognisable as such (company logo, advertising/greeting message of the company, etc.) and fulfil promotional purposes.
  2. In the case of public officials, in any case – but usually also in private business – de minimis limits or upper value limits for gifts must be observed.
  3. There must be no clear connection between the (promotional) gift and an act by the recipient for the benefit of the giver.

In the event of non-compliance with the (legal) limits, even promotional gifts may be prohibited. In general, the following applies: Corruption is punishable – both in the public and private sectors; however, it is sanctioned less strictly in the private sector than in the public sector.

Where is the specific (value) limit of the admissibility of promotional gifts?

Specific (value) limits for the permissibility of gifts are not legally defined.

The de minimis limit is generally assumed to be a total value of less than EUR 100.00, although this is not a legally defined limit, but a guideline. A further distinction must be made between the obligatory compliance or breach of duty of an official or legal act in connection with the (promotional) gift:

Benefits granted in connection with the proper performance of an official transaction are, therefore, permissible if they also meet the criteria of local or national custom and the de minimis requirement.

Granting of benefits for the breach of duty or omission of a specific official transaction is prohibited in any case, irrespective of the value and type of gift.

In the private sector, however, the granting of benefits to employees and agents is always prohibited exclusively in connection with the breach of duty or omission of a legal act.

Within the framework of compliance guidelines, numerous companies and authorities have also established their own regulations – which sometimes deviate from the law and are more restrictive – often with lower value limits.

Corruption: what penalty is to be expected?

All corruption offences in the narrower sense, both in the private and in the public sector, make provision for imprisonment.

In addition to the individual criminal liability of the respective acting person, the company itself can also be criminally liable. However, the establishment of appropriate compliance measures can prevent (administrative) criminal liability of the company or at least have a mitigating effect.

How does criminal prosecution work?

All cited corruption offences must be prosecuted ex officio. The – possible – withdrawal of an already submitted notification is not possible; the law enforcement authority must, therefore, initiate proceedings.

You can find out more about promotional gifts and tax law in our article "What tax aspects must be taken into account for promotional gifts?" >>



Autor: Oliver Plöckinger