This week marks the start of the Chinese New Year,traditionally an occasion when gifts are exchanged not only byfamily members, but also by business associates. U.S. companiesthat operate in China have to tread carefully when it comes topresenting gifts to government officials, though, because of theU.S. Foreign Corrupt Practices Act.

The FCPA, enacted in 1977, prohibits bribing foreign officials,and that prohibition casts a shadow over corporate gifts. ScottMoritz, a managing director at Protiviti who leads itsinvestigation and fraud risk management practice globally, saidjust giving a gift doesn't violate the statute. “There has to beintent to influence some sort of business decision that then couldresult in an unfair business advantage,” Moritz said.

The simplest way to comply with the FCPA would seem to beeliminating all gift-giving. But companies have to take intoaccount the culture of the countries in which they do business, andin many countries, that culture includes gifts.