Chinese custom meets the FCPA

The Chinese have a wonderful custom of gift-giving, which is why, whenever I go there, I pack a lot of small gifts--especially preferring to give out books.  If you don't, you'll end up feeling weird when your Chinese hosts give you all sorts of gifts at each stop, a lot of it being traditional crafts with company or agency logos attached.

But here's the rule for Americans or any company that lists here: whenever gov officials are involved, to include state-run companies, there are strict dollar limits on the value allowed for gifts exchanged. These limits aren't all that hard to meet, so long as you're not in the serious graft business.

But even in that more exalted realm, US agencies are more vigorously prosecuting violations of the Foreign Corrupt Practices Act (FCPA):

In late June, more than 150 executives from Siemens (SI), the German industrial giant, met in Beijing to discuss compliance with Chinese and U.S. anticorruption laws. That a multinational would spend millions to strategize about avoiding bribery charges in a country where bribery is rampant shows how much business is changing in China.

U.S. prosecutors, empowered by the Foreign Corrupt Practices Act of 1977 (FCPA) to investigate allegations of bribery anywhere in the world, have been stepping up their activities in China, where a tradition of gift-giving in business often degenerates into serious graft. The FCPA bans U.S. companies from bribing foreign officials. It also applies to foreign companies like Siemens that list their securities on U.S. exchanges. Companies that violate the FCPA face millions in fines, and executives can go to prison.

Yes, yes, it's a thin red line that separates pleasant custom from corruption.

Says one former USG official involved in compliance, it's all about "reconciling Chinese customs of entertainment and gift-giving with the culture of compliance."

Beware of enabling middlemen, says the article, because they can get you in trouble.

The more you connect, the more you're subject to the rules--and customs--of others.  I see this rule-set clash going down rather quietly, like the rustling of red envelopes.