Mitigating FCPA Risks Associated with Incentive Awards to Third Parties

The use of incentive awards to recognize outstanding sales staff, dealers or downstream business partners who market or sell a company’s goods and services is a well-established business practice.  Such incentive awards can take the form of cash, gifts or vouchers for retail shopping, travel and dining.  For top sales staff or dealers, the incentive may be an off-site retreat that includes both training, promotion of products and services, and hospitality.  In a guest article, Adam Safwat, counsel at Weil, Gotshal & Manges, explains that when transparently administered between commercial parties, such incentive awards can be legitimate promotional activities without any intent on the part of the sponsor to corruptly influence the recipient’s conduct.  When the incentive awards are given to sales staff of state enterprises, however, there is a risk they may transgress the FCPA.  See also Gifts, Travel, Entertainment and Anti-Corruption Compliance: Sources of Authority, Best Practices and Benchmarking” (Nov. 6, 2013).

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