FAQ

  • CPAS Advice

    Why should I care about corruption prevention in my company/organization?

    Corruption, fraud and other malpractice erode profits and jeopardise the business in the long run.  Management of any company, large or small, shall instigate anti-corruption measures as early as possible.  It sharpens their competitive edge and can improve profits.

    In what areas can CPAS render advice on?

    Specific systems and procedures such as procurement, store management, sales and accounting, staff administration, contract management and code of conduct for employees, etc.

    Do I need to pay for CPAS’s services (e.g. advice or training)?

    No.  The CPAS service is free.

    Is there any risk that confidential business information can be compromised when using the CPAS services?

    No.  Our services are provided in strict confidence to protect clients’ information unless individual clients are willing to share their experience of using the services of CPAS so as to assist in promoting the service.  Your company has full discretion to decide on the information to be given to us, and how/whether to take on board the tailored advice.

  • Offer/Acceptance of Commission in Referral of Business

    Am I violating the anti-bribery law if I accept commission/rebate for making a referral of business?

    In accordance with Section 9 of the Prevention of Bribery Ordinance (POBO) (Cap. 201), an agent, without the permission of his principal solicits or accepts an advantage (including commission/rebate) as a reward or inducement for making a referral in relation to his principal's affairs, commits an offence.  Please refer to the original text in POBO for details.

    Please make sure you are permitted by your principal (e.g. an employer, a person who you act on behalf of) to accept commission/rebate for making a referral relating to your principal’s affairs.

    Companies/organisations should clearly set out their policy and rules on acceptance and offer of advantages (including commission/rebate) in relation to their business for compliance by their staff, such as by way of a Code of Conduct.  CPAS can help a company in drawing up Code of Conduct.

    What should I pay attention to if I want to offer commission/rebate to someone/a business partner in return for a business referral?

    In accordance with Section 9 of the Prevention of Bribery Ordinance (POBO) (Cap. 201), a person, offer an advantage (including commission/rebate) for an agent without the permission of the agent’s principal as a reward or inducement for the agent for making a referral in relation to his principal's affairs, commits an offence.  Please refer to the original text in POBO for details.

    Hence, before offering a commission/rebate to any person in return for any business referral (i.e. referring a client to you), you should be aware of the following:

    (i) whether a “principal and agent” relationship exists between the person and the client referred by him;

    (ii) if he is an agent of the client, ensure that he has the client (his principal)'s permission to receive the commission/rebate;

    (iii) ensure that the person has his employer's permission to receive the commission if the referral is related to the employer's business or the commission is actually paid to the person’s employer (in which case points (i) and (ii) above also apply in respect of the employer); and

    (iv) if the person is an employee of a government department or public body and the client is connected with his duty, do not offer any commission/rebate to the person.

    Companies/organisations should clearly set out their policy and rules on acceptance and offer of advantages (including commission/rebate) in relation to their business for compliance by their staff, such as by way of a Code of Conduct. CPAS can help a company in drawing up Code of Conduct.

    Will I violate the anti-bribery law if I offer commission to my employees for making a referral to my company?

    This is a common business practice for a company to offer commission to an employee for the latter referring clients to the company.  Under normal circumstances, the practice does not breach the Prevention of Bribery Ordinance (POBO) (Cap. 201), unless the employee is also an agent of the client at the same time and the latter has not given permission for the former to receive advantage for the referral, there may be a risk of breaching Section 9 of the Ordinance.  Please refer to the original text in POBO for details.

    From the corruption prevention angle, a company should require its employees to disclose to the company their relationship with the clients being referred to the company so as to assess whether a “principal and agent” relationship may exist between the two, and if yes, require the employees to seek the clients’ permission for acceptance of commission before offering such to them.

    Companies/organisations should clearly set out their policy and rules on acceptance and offer of advantages (including commission/rebate) in relation to their business for compliance by their staff, such as by way of a Code of Conduct.  CPAS can help a company in drawing up Code of Conduct.

  • Anti-Bribery Law

    I often receive small gifts and souvenirs from my clients/suppliers/business associates as a gesture of showing their appreciation of my work. Am I violating the anti-bribery law?

    Under Section 9(1) of the Prevention of Bribery Ordinance (Cap. 201), an agent who, without the permission of his principal solicits or accepts an advantage as a reward or inducement for doing or forbearing to do anything, or favouring or disfavouring anyone, in relation to his principal's affairs, commits an offence.  The person offering the advantage under such circumstances may also commit an offence under Section 9(2) of the Ordinance.  Please refer to the original text in POBO for details.    
     
    Gifts/souvenirs constitute advantage under the Ordinance.  Hence, it is important for you to make sure that you are authorised or permitted by your company (i.e. your principal) to solicit or accept gifts from your clients, suppliers or business associates.  

    To prevent the staff fall prey to corruption traps, we strongly advise the companies/organizations to clearly set out their policy and rules on acceptance and offer of advantages in relation to their business for compliance by their staff, such as by way of a Code of Conduct.
      
    We can help your company in drawing up Code of Conduct

    What constitutes an “advantage” according to the law?

    Under the Prevention of Bribery Ordinance (Cap. 201), “advantage” includes money, gifts, loans, commissions, offices, contracts, service, favours and discharge of liability in whole or in part, but does not include entertainment.  Please refer to the original text in POBO for details.

    Does the law specify any limit on the value of advantage (e.g. lai see or gift) a staff of a private company/organization can receive from business associates?

    No, the Ordinance has not set any limit or threshold for the amount of the advantage an employee can solicit or accept.  If the advantage is accepted under the conditions specified in Section 9(1) of the Ordinance, the staff will commit a bribery offence regardless of the value of the advantage, unless the acceptance is permitted by his employer.  Please refer to the original text in POBO for details.
     
    It is up to the employer to decide whether to allow an employee to accept advantage from persons having business dealings with the company, and if allowed, to specify a limit on the value and the circumstances allowed (e.g. on traditional festive occasions where gifts are normally exchanged).  However, we strongly advise that the limit should not be of too high an amount that may be perceived as influencing the recipient's impartiality. 

  • Acceptance of Entertainment

    What is “entertainment” under the Prevention of Bribery Ordinance (POBO)?

    According to the POBO, “entertainment” generally means the provision of food or drink, for consumption on the occasion when it is provided, and of any other entertainment connected with, or provided at the same time as, such provision.  For example, the dishes or the bottles of wine and the music performance you enjoyed during the dinner at a restaurant are “entertainment”.  However, if you take away the dishes or the wine, they will be classified as “advantage” instead of “entertainment”.

    As “advantage” does not include “entertainment” under the POBO, does it mean that we do not need to pay any attention when accepting “entertainment”?

    Although “entertainment” is not regarded as an “advantage” under the POBO and is an acceptable form of business and social behaviour, you should be aware of any “sweetening” effect or conflict of interest in acceptance.  Let’s imagine the following situation:
    as a procurement staff member of the company, one of the potential suppliers/contractors always treats the staff member lunch or dinner.

    In the above situation, acceptance of the entertainment may probably put the staff member in an obligatory position or compromise his impartiality in the discharge of his duties.  In fact, many ICAC cases showed that corruption did not begin with a direct bribe, but a sweetening process, such as frequent entertainment.  Hence, a director or staff member should avoid accepting lavish or frequent entertainment from persons whom the company has business dealings or from his subordinates.

    How could company help staff to handle entertainment?

    It is always advisable to have the company’s policy and/or guidelines on acceptance of entertainment stated in its Code of Conduct.  Companies could refer to the sample code below or contact us for tailor-made advice on drawing up Code of Conduct.
     
     Sample Code of Conduct for the Private Sector
    Service Request Form
     Contact us for Corruption Prevention Advice

  • Conflict of Interest

    What is "conflict of interest"?

    A conflict of interest arises when an employee's personal interest is in conflict with his official position, which may lead to his discharge of duties counter to the best interest of his employer, if not properly managed.  

    While sometimes, conflict of interest may be unavoidable, it is important to handle a conflict of interest situation properly.  Otherwise it may easily end up with committing fraudulent acts or breaching the Prevention of Bribery Ordinance (Cap. 201).

    Are there examples of “conflict of interest”?

    (1) A staff member involved in a procurement exercise is closely related to or has financial interest in the business of a supplier who is being considered for selection by the company.

    (2) One of the candidates under consideration in a recruitment or promotion exercise is a family member, a relative or a close personal friend of the staff member involved in the process.

    (3) A director of the company has financial interest in a company whose quotation or tender is under consideration by the Board.

    (4) A staff member (full-time or part-time) undertaking part-time work with a contractor whom he is responsible for monitoring.

    (5) A director or staff member accepts frequent and lavish entertainment from the supplier or contractor of the company.

    How to handle “conflict of interest” situations?

    As a golden rule, directors and staff members should avoid any conflict of interest situation or the perception of such conflicts, and should not misuse their position or authority in the company to pursue their own private interests.  Private interests include both financial and other interests of the director or staff member himself, and those of their family members, relatives or close personal friends. 

    In case the actual or potential conflict of interest is unavoidable, the director or staff member should make a declaration to the management through the reporting channel using a standard declaration form.  

    The management should then carry out appropriate actions to manage the conflict of interest situations reported by directors/staff members, for example, remove the conflict by assigning other staff member to take over the job or require the supervisors to closely monitor the process.  The decisions made and the follow-up actions taken should be duly recorded to protect both the company and the director or staff member concerned.