| Gift-giving is the act of transferring a present, or | | | | or communities. It may be traditional to provide |
| gift, to another. Gift-giving occurs in both social | | | | some gifts, particularly entertainment and small |
| relationships and economic or business exchanges. | | | | tokens of respect or appreciation, in business |
| A gift is anything of value, however large or small | | | | settings. Corruption is bribery of or extortion by |
| in value. The gift can be money or something else | | | | agents in which typically money, or some other |
| of value such as personal goods, services, | | | | item of value, is exchanged for a contract or |
| property, or in many cases entertainment. In | | | | other valuable opportunity. |
| principle, a gift should be a voluntary free transfer | | | | The key feature of corruption, demonstrated in |
| not requiring any form of compensation or | | | | the form of bribery, is that an agent accepts |
| reciprocity. A voluntary gift is neither a gratuity or | | | | something of value from a third party to act |
| a tip, provided as full or partial compensation for | | | | contrary to the interest(s) of the agent's |
| some personal service (such as restaurant | | | | principal(s). Public employees in democracies and |
| tipping), or a bribe, provided or offered to an | | | | privateenterprise employees are agents. Their |
| agent in expectation of some desired opportunity. | | | | principals are the citizens or the owners, |
| Customary gift-exchange occurs mostly at | | | | respectively. With certain exceptions, it is not |
| specified times of the year, such as Christmas, in | | | | generally possible under this definition to bribe a |
| ritualized social relationships. Gifts and | | | | principal. Some transactions with a hereditary |
| entertainment are typical aspects of business | | | | sovereign, as a principal, might still be corrupt or |
| etiquette and marketing or promotion efforts in | | | | unethical on some other basis. Gifts and |
| various countries. Business practices and national | | | | entertainment expenses are important even in |
| laws vary with respect to such activities. | | | | advanced market economies. |
| Multinational enterprises typically provide guidance | | | | The pharmaceutical industry is well known for |
| to employees concerning gift-giving and | | | | company gifts to business customers, such as |
| entertainment to customers and from suppliers. | | | | physicians. Reciprocal exchange relationships may |
| Gift-giving, gift exchange, and gratuities are also | | | | be highly established in some societies, such as |
| established customs or traditions in various | | | | Japan and China. In Japan, ritual and courtesy are |
| societies to express appreciation or as a sign of | | | | still very important in social and economic |
| thoughtfulness. In some advanced economies, | | | | relationships. A classic instance of a gift economy |
| tipping for personal services is expected income in | | | | is China. The guanxi networks of gifts, obligations, |
| lieu of full wages. | | | | and reciprocity are reportedly important sources |
| Because the boundary between bribery and | | | | of personal influence in business and government |
| giftgiving may be ambiguous, the overlapping of | | | | circles. These networks are systems of trust |
| economic and social relationships, varying by | | | | relationships for mutual support through favors. |
| culture, is a problematic dimension of | | | | Such networks may function in some |
| anti-corruption efforts. The Foreign Corrupt | | | | circumstances as patron-client relationships, which |
| Practices Act (FCPA) of 1977, as amended, | | | | were important in ancient Rome. Multinational |
| exempts facilitating payments (i.e., "grease") under | | | | enterprises commonly have policies and guidelines |
| some circumstances and provides for certain | | | | governing gifts and entertainment expenses for |
| affirmative defenses concerning marketing and | | | | customers and from suppliers. In general terms, |
| promotion expenses including entertainment. All | | | | for U.S. and European companies, some |
| such expenses must be carefully reported. Some | | | | "reasonable and limited expenses" by employees |
| gifts, gratuities, and entertainment permissible | | | | may be acceptable for gifts, entertainment, and |
| under the FCPA may be illegal under local | | | | customer travel and living expenses in connection |
| anti-bribery laws. In practice, gift-giving may be a | | | | with promotion or contract execution. Employees |
| mandatory part of ritualized social and economic | | | | may sometimes accept purely nominal-value gifts |
| reciprocity. | | | | and entertainment expenses from suppliers. |
| A transfer of value with the appearance of a gift | | | | With respect to both customers and suppliers, |
| might arise in a number of motives including | | | | there must be no appearance of impropriety and |
| appreciation, altruism, bribery or extortion, custom | | | | no improper advantage sought (a violation of the |
| or tradition, gratuity, reciprocity, or tax incentive. | | | | FCPA, as amended). Accurate records must be |
| Reciprocity is an act or expectation of exchange | | | | maintained and local anti-bribery laws, as well as |
| between two parties. This reciprocity may be an | | | | the FCPA, must be obeyed. |
| established custom or tradition in some societies | | | | |