Gift or Bribery?

Recent History

Gift or Bribery?

In 2007, a legal investigation into the dealings of Utz Claassen, the CEO of one of the top five German utility companies (EnBW), caught the attention of the German public. Germany was the sponsor of the 2006 Soccer World Championship; “A Time To Make Friends” was its motto. Claassen must have taken this slogan very seriously indeed. With the corporate Christmas mailing in 2005 to, amongst others, local and state politicians, EnBW included ticket vouchers for some of the soccer matches. The vouchers had a value of up to several hundred Euros each.

Big deal? The decisive factor when making gifts to business partners (or politicians) in Germany is not the price of the gift. Rather, it is if the gift is given in expectation of a favor or a service in return. Think about it: When you give a real gift to, say, a friend, then you do it, because you want to make your friend happy and not because you want him to give you something back. So why would you make a gift to your business partner? You probably don’t even know him (yet) that well. You normally have no personal, but only professional interests in him. 

It may be customary in your own country to make a gift to somebody you intend doing business with. Well, you don’t have to abandon your habits altogether. But you need to be quite selective as to which gift you choose. In the past two to three years, numerous companies have adopted a so-called compliance or code of conduct policy. This policy governs the type of gifts a company’s employees are allowed to accept. Especially large corporations also publish their policy on their websites.

Which gift is OK?

In general, it is not too common in German business dealings to give or receive gifts. Even if you are used to giving something to your (prospect) business partner in your own country or area, you should ask yourself if you really want to do this in Germany, too. If, however, you decide to bring a gift, you may want to obey the following three basic and easy rules so as not to create an awkward situation or give rise to any undesired implications:

1. Try to find out if and which restrictions a company has established in their compliance or code of conduct policy. You may find it on the company’s website. If not, you can, prior to your business meeting, inquire with the compliance officer of that company or with a competent manager. (An example for how a company publishes this information on the internet can be found on the website of HENKEL, a German global player in the chemicals market.)
2. The gift you are brining should, if possible, have no practical purpose. The presentee should not be able to actually use the present. An example: Giving a framed picture of your company’s production site to be hung in the presentee’s office should be OK. A digital camera and a free flight to the production site is not.
3. Whatever your gift is, please make sure it has no significant material value. There is no law which limits the amount of what a gift is allowed to cost. But the higher the price of a gift actually is, the more likely you may encounter insinuations or suspicions of bribery.

Remember: With the inappropriate choice of a gift, you can cause anything from embarrassment to legal investigations to your business partner – not a good start into a successful relationship. Think very carefully about what you want to bring as a gift. And if you decide not to bring anything at all, none of your German business partners will be disappointed and you’re always on the safe side. And, although stating the obvious: Never give cash!

This page is part of the blog, “Doing Business With Germans,” by Sascha Röber.