Gifts and Favors
Gifts and favors, of any kind (including entertainment), should never be given or accepted when they are given or received with the intention of influencing someone. Cash or cash equivalents (such as securities) will never been offered or accepted.
What does our policy say?
Business decisions should be based solely on the benefits for BMC, never on personal benefits that were or could be obtained. BMC employees can give and accept small corporate objects (such as promotional material with the name/logo of the company) to create and strengthen legitimate business relationships. However, given that favors and personal personal gifts may negatively influence business relationships, they may not be asked for nor given, especially in situations where they may compromise the integrity of business decisions or where they may seem inappropriate. Prior approval must be requested from a superior or local manager for exceptional circumstances.
The obligatory guiding principles are:
- Exchanging gifts and favors with third parties may only be done as a business courtesy, as long as this practice is accepted, on a local level and within the sector, as a sign of appreciation and is in accordance with the applicable legislation and with the third party’s ethical policies.
- The gift or favor must be given/done voluntarily and not be valuable enough to influence a business decision and/or lead to a dependent relationship or seem inappropriate.
- If the beneficiary has decision-making power regarding an issue or decision still to be made that affects the interests of BMC, it must not be implied that the gift or invitation has been made for this reason.
- Gifts and favors should never be given or accepted in the form of cash or cash equivalents.
- It is strictly forbidden to give or accept personal financial advice, of any kind, to/from clients, vendors, or other business contacts.
- When giving gifts and favors, you should check with and respect the other party’s ethical code of conduct, if they are available and it is possible, to be sure that they are also respected along with ours.
What does this mean in practice?
Small gifts of less than €100 and restaurant meals:
Giving or receiving small gifts is often a part of local culture; it’s also an international custom to discuss business affairs over a meal. Prior authorization is not required for these gifts, as long as their value is not excessive.
Trips and accommodation:
Sometimes, it can be necessary to pay for (or receive payment for) travel and accommodation expenses for (from) third parties, for example, to attend an event related to the business, such as a conference, seminar, or multi-day business meeting, or even an occasional leisure event. However, since these expenses can constitute a financial and personal benefit for the person whose expenses are being paid for, prior authorization is required from the next-highest management level. Normally, this permission will be given, as long as the following conditions are met:
- These expenses are in line with the aforementioned obligatory guiding principles.
- The trip is directly related to the promotion, demonstration, or presentation of BMC products or services.
- The distance of the trip and the duration of the stay must be justified for good-faith business reasons, such as a meeting of all responsible persons for a trade fair, the availability of flights, etc.
- Employees may not accept trips or accommodation from (potential) vendors, except for training and/or education, and only if the expenses are limited and reasonable in relation to the benefits of the training/education.
- Expenses for spouses or other companions of the guests will not be paid for, except for exceptional occasions, when there is a social or cultural obligation, or when BMC organizes events for employees and their spouses.
- Government authorities and federal agencies may have strict policies regarding accepting gifts, sponsorships, and tickets to sporting or other kinds of events. These policies must be respected.
Payments to Third Parties
Payments, made via remunerations or other methods, to agents, consultants, middlemen, distributors, intermediaries, government employees, and other similar third parties should be (1) in accordance with the applicable laws and regulations, (2) appropriate for the services provided, (3) be made only for legitimate services, and (4) be duly registered in our accounting books.
BMC divides payments to third parties into the following categories:
- Payments for routine actions (“facilitation” payments).
- Payments to third parties: agents, consultants, middlemen, distributors, intermediaries, and other similar parties.
- Payments to political parties and politicians.
These are small payments made to low-level government officials (customs, etc.) or employees in the private sector, as personal tips, to ensure or expedite routine operations that the person paying has the right to carry out. A characteristic of these “facilitation” payments is that the service obtained as a result of the payment is one that is already inherent to the work of that person.
Why are “facilitation” payments an issue?
They are a type of bribe, since they are used to obtain a preferential position or service.
- Payments for routine actions are illegal in almost every country, including the Netherlands (only certain, limited legal regimes still allow for “facilitation” payments, but under strict conditions, such as in Canada, the United States, and Australia).
- Paying for routine official events opens the door to more serious corruption issues.
What is our policy?
Since payments for carrying out routine actions (“facilitation” payments) can be linked to corruption, and by virtue of the applicable legislation, BMC is strongly opposed to making “facilitation” payments. We are conscious that these, in practice, create problems in the daily operations of companies in certain countries. If this is the case, you must discuss this promptly with your immediate supervisor or with the general director, to obtain guidance. In all cases, the applicable laws and regulations must be complied with.
Payments to Agents, Consultants, Middlemen, Distributors, Intermediaries, and Other Similar Parties (“Third Parties”)
Why can third-party payments be (or become) an important issue?
BMC’s general policy on corruption and bribery should not be ignored when making payments to third parties (thus eventually generating a last payment that will be in conflict with our policies). To avoid this, all payments for services provided by a third party to BMC must be clearly justified and logical.
What is our policy?
Accepting that a payment is to be made to a third party must be a decision based on an exhaustive assessment and evaluation by the manager responsible, of all the information regarding the payment in question, the services provided, the obligatory guiding principles listed below, and the third party to be paid.
Obligatory guiding principles:
- Any payment made to a third party for services provided by them to BMC must be clearly justified and logical. BMC will only make payments for goods or services that have been received, based on documentation via an invoice.
- Any payment to a company for a product or service must be made to that company, not to an individual.
- Payments being made to so-called “numbered accounts” or those which are requested to be made to an offshore entity or person, are strongly discouraged, and these will always require prior authorization from the next-highest management level.
- All payments must be correctly and duly recorded in the accounting books, so that they can later be inspected by internal and external auditors and local or tax authorities.
- All payments must be made to a bank account that is agreed upon in writing. Payments in cash are strongly discouraged and will always require prior authorization from the next-highest management level.
- Payments to government officials are prohibited.
- Bribery is prohibited (this includes kickbacks).
- The company or its employees shall not get involved in racketeering (including extortion, blackmailing, or requesting bribes), collusion (such as bid-rigging), or fraud.
What does this mean in practice?
- Payments shall not be channeled through Third parties.
- All payments to be made to a third party will be sent to that third party. In the case of distributors and/or agents, an exception to this rule can be made: payments made by BMC, under previously agreed conditions (such as discounts, deductions, etc.), can be funneled through the distributor/intermediary when these payments are destined to the end user. These exceptions can be granted after checking with the next-highest management level.
- Payments made to third parties cannot exceed the normal, reasonable business percentages for the legitimate service provided by them.
Payments to Political Parties and Politicians
Payments to political parties are defined as donations of any amount to support a political objective. For example, these include payments made at local, regional, or national political fundraising events, via the donation of goods or services, payments to employees during work hours made with a political goal in mind, or paying political campaign costs.
Why is this an important issue?
Political donations can create problems for BMC because:
- Political donations made by companies are vulnerable, since they can lead to abuse.
- Political donations made by companies are illegal in many countries.
What is our policy?
BMC will not pay consulting fees, and will not make payments or donations, either in cash or in kind, to political organizations or politicians.
Payments to industrial associations or membership fees for organizations that work in the interest of the business are not considered political donations.