On 17 January 2014, the Hong Kong Government promulgated new guidelines on the bestowal of gifts and provision of official meals. In this article, we will discuss the revised guidelines and their implications for Hong Kong companies.
Why was there an update?
Due to public concerns over the handling of official entertainment, gifts and duty visits by Timothy Tong, the former Commissioner of the Independent Commission Against Corruption (ICAC), an Independent Review Committee was set up in May 2013 and a report on the review of the ICAC's regulatory systems and procedures was published in September 2013. The Government then made reference to the report and subsequently reviewed the Government guidelines.
What are the requirements for bestowal of gifts?
General principle: Officers should as far as possible refrain from bestowing gifts or souvenirs during the conduct of official activities.
Where it is necessary to bestow gifts or souvenirs: The items should not be lavish or extravagant, and the quantity should be kept to a minimum. The exchange of gifts or souvenirs should be made from organisation to organisation for functions involving outside parties. The bestowal should also be approved by the Heads of Bureaux or Departments.
How about the provision of official meals?
General principles: Official meals charged to public funds should be provided with good cause and only if the meal is directly related to the discharge of official duties or forms a necessary part of making or maintaining contacts in an official capacity and is in the public interest. Officers should exercise prudent judgment and economy when entertaining guests, to avoid any public perception of extravagance.
Where official meals are provided:
|1.||The guests should normally be non-civil servants. Other government officers, their spouses and the spouse of the host may be invited only if it is in the public interest for the principal guests to meet them or it is necessary to invite them to assist in entertaining the principal guests and/or the spouses of the principal guests.|
|2.||The frequency of official entertainment and the number for government officers attending should be kept to the minimum. Lavish official meals must be avoided.|
|3.||The maximum amounts allowed for official lunches and dinners are HK$450 and HK$600 per person respectively, inclusive of all expenses incurred on food and beverages consumed on the occasion, service charges and tips. Costs of food and beverages that are separately procured and provided for consumption at the same official meal are included in the limits.|
What should companies do?
The new guidelines serve as a reminder to Hong Kong companies to implement internal bribery prevention policies and to review their current procedures.
In view of the increasing public awareness to combat corruption and the extra-territorial application of foreign anti-bribery legislation, such as the UK Bribery Act 2010 (for details, see our June 2011 Legal Update), companies should implement or review their anti-bribery procedures in order to keep up with the changes in the expectation and situation of society. Although the new government guidelines do not have the force of law and are not binding on private companies and individuals, they serve as a good starting point for companies to set up or update their internal measures.