2014 Winter Olympics: Anti-Bribery Considerations
08 January 2014
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Summary: The February 2014 Olympic games in
Sochi, Russia will serve as an opportunity for many companies to
market their products and develop customer relationships in an
informal setting. While the business value of these opportunities
is evident, companies must be mindful that the US Foreign Corrupt
Practices Act (FCPA), the UK Bribery Act, Russian anti-corruption
laws, and anti-corruption laws in other countries may impose
restrictions on hospitality and other Olympics-related
In recent years, the US Securities and Exchange Commission (SEC)
and Department of Justice (DOJ) have launched multiple
anti-corruption investigations relating to corporate hospitality
during major sporting events, such as the Olympics and World Cup.
For example, Weatherford International recently settled parallel
SEC and DOJ investigations relating to, among other things, its
provision of "improper travel and entertainment to officials
of a state-owned company in Algeria with no legitimate business
purpose . . . [including paying] for a 2006 FIFA World Cup trip by
two of the officials." At least one other investigation
relating to Olympics hospitality is currently ongoing, as
Notwithstanding these specific examples, anti-corruption laws do
not generally prohibit travel, gifts and entertainment of customers
for legitimate business purposes. However, the line can be grey
between bona fide business development activities and those that
might attract scrutiny from US and other regulators. While many
companies have been planning Olympics-related events for some time,
now is a good time to set forth some recommended steps to reduce
the anti-corruption risk presented by plans to invite and provide
hospitality to customers attending the Sochi Olympics.
- Document the business purpose of the event: Document the
legitimate commercial reasons for hosting the customer at the
Olympics. The absence of a clearly articulated statement of the
legitimate business-related purpose for the attendance could
increase the risk that its nature could later be misinterpreted by
regulators and prosecutors. The business purpose should be
reasonably related to the nature of the event.
- Prior approval for the provision of gifts and hospitality:
Require compliance or legal department approval for Olympics gifts
and hospitality over a nominal amount.
- Properly account for benefits provided: The costs of any gifts,
travel or entertainment, including amenities, and the name and
affiliation of each recipient, should be fully and accurately
documented in your company's books and
- Update and redistribute anti-bribery policies prior to the
Olympics: Ensure anti-corruption policies and procedures are up to
date and circulated in advance of the Olympics to relevant
employees involved in the planning or hosting of Olympics-related
- Consider local laws and rules: Consider whether invited guests
are permitted by the local laws and rules applicable to them to
accept relevant gifts, travel and hospitality. For significant
benefits, consider obtaining confirmation from the guest or
the guest's employing organization that the guest is permitted
- Consider issuing anti-corruption reminders to key employees
shortly before the Olympics: The reminder should emphasize that
provisions in the FCPA and other anti-bribery laws tend to be
broadly interpreted by governmental enforcement authorities. For
example, "anything of value" under the FCPA can include
numerous improper benefits beyond cash such as gift cards, loans,
donations, the hiring of family members and other special
- Generally avoid expenses that will attract scrutiny: Examples
of such expenses include the provision of lavish gifts, per diems
and/or side trips with no business purpose.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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