Corruption, bribery, and improper payments remain significant compliance risks in India. These issues have evolved beyond simple cash exchanges, taking on various forms. The Prevention of Corruption Act (POCA) of 1988 explicitly prohibits government officials from accepting any form of remuneration, financial or non-financial, other than their legal salary for services rendered. Furthermore, the Prevention of Corruption Amendment Bill, 2013 establishes giving bribes as a specific offense. These guidelines offer a reference for organizations and employees to align their practices with compliance standards.

Adoption of Guidelines

• Companies without specific guidelines on business courtesies may consider adopting or modifying these industry guidelines to fit their operational needs.
• For companies with existing policies on business courtesies, these guidelines can serve as a reference document, ensuring that proper monitoring and tracking mechanisms are in place as outlined.

A. Need for Industry-Wide Guidance

The prevalence of corruption, bribery, and improper payments presents ongoing compliance challenges. These activities are increasingly taking on forms beyond simple cash transactions. In India, the Prevention of Corruption Act (POCA) and the Prevention of Corruption Amendment Bill make clear that accepting or giving bribes is prohibited. Similarly, in the private sector, businesses aim to make decisions impartially, without conflicts of interest or efforts to secure improper advantages.

B. Common Areas of Interaction

Business courtesies are often extended in the following common situations:

• Customer meetings or visits at company sites or external venues
• Inspections, audits, or on-site investigations by government agencies
• Pre- and ongoing project discussions (e.g., technical meetings)
• Visits to manufacturing facilities by government officials or regulators
• Interactions during festive seasons, weddings, and other celebrations
• Company-sponsored training sessions or visits to company facilities

C. Definition of Business Courtesy

A business courtesy refers to any gift or hospitality extended to build and maintain relationships with commercial counterparts or as part of cultural customs. It may also be part of business etiquette during regular interactions. These courtesies are sometimes referred to as "gratuities."

D. The "Reasonability" Test for Business Courtesies

• No expectation of favor
• Infrequent and reasonable
• Permitted by employer rules
• No adult entertainment
• Non-monetary
• Proper documentation
• Timing considerations & Avoid when decisions are pending

E. Gifts & Entertainment:

Modest, Gifts with company’s monogram, No Gifiting to family members, strictly avoiding gifts like Cash, jewelry, artwork, or items. Providing reasonable mode of transport, Light Refreshment & Meals should be offered as informal social hospitality.