Technology Company (TC) has developed a new type of cellular tower, capable of covering twice the area of traditional towers and offering faster data download and upload capabilities. A foreign state-owned telecommunications company (SOE) is interested in contracting with TC to purchase and deploy the new technology. Before doing so, SOE wants to visit TC’s facilities to examine the technology, test it, and speak with TC executives about the technology’s potential and reliability. SOE expects TC to pay for the flight, lodging, and meal expenses for the visit. SOE’s executives insist on flying first-class. After the two-day visit to TC, SOE also wants TC to arrange a two-day side trip to Las Vegas and a tour of the Grand Canyon. The CEO of SOE, who will be making the trip, plans to bring his wife with him. She is not an employee of SOE.
- The FCPA and the UK Bribery Act 2010 do not provide explicit monetary thresholds or other criteria of per se acceptable travel, entertainment, and hospitality expenses. Rather, enforcement authorities will consider the totality of the evidence and surrounding circumstances in determining whether an inference can be drawn that the travel, entertainment, and hospitality was intended as a bribe.
- Thus, the following should be considered with any business trip: the business purpose of the trip; how much time will be devoted to that business purpose versus socializing or leisure; what entertainment is planned for the trip; what accommodations and class of flights will be booked; what limits the company’s policies place on business trips for its own employees; and whether any spouses or family members of SOE will be attending.
- Extensive entertainment, long side trips, lavish accommodations, and expenses for family members or other guests should be avoided.
- The company should purchase the flights and pay for the hotel rooms directly if possible. If not, the company should reimburse the SOE executives only after receiving appropriate receipts and documentation for the expenses.
- The business purpose and schedule for the visit should be documented, and all accommodations and other costs should be properly accounted for and documented.