HSE University Anti-Corruption Portal
France Issues Guidance on Donations
Vladislava Ozhereleva

The French Anti-Corruption Agency (Agence Française Anticorruption – AFA) has issued a Guide on How to Counter Corruption in Sponsorship and Charitable Activities (Sécuriser Les Opérations De Parrainage Et De Mécénat Des Entreprises).

The paper stresses that sponsorship and/or charitable assistance can be associated with such corruption offences as:

  • Active and passive bribery of the authorised persons of the sponsoring/charity organisation or the recipient organisation: for example, the director of a construction company intends to conclude a contract with the supplier of materials that offers to supply the materials at a reduced price in exchange for the company’ sponsorship of a sport association whose member is the head of the supplier;
  • Active and passive trading in influence: for instance, a not-for-profit organisation organises a film festival and the head of the organization wants to get sponsorship; to this end, he offers the head of the film distributor to influence his cousin, a deputy mayor responsible for taking decisions on municipal subsidies, on allocating funding from the municipal budget;
  • Execution of duties in a conflict-of-interest situation: for example, the head of an industrial enterprise wants to sponsor the production of the outfits of the national sport team, being the son-in-law of the president of the respective sport federation;
  • Favouritism: for example, the director of the company that had bid for a tender of a local authority is contacted by a member of the procurement commission of the authority telling him that two bids are in line with the requirements and suggesting that he will take the decision in favour of the company and support its bid before the other members of the commission in exchange for the company’s sponsorship of a sport club whose board’s head is a member of the procurement commission;
  • Misappropriation of public funds: for instance, a company supports a foundation of public interest whose head contacts the head of the sponsorship unit of the company to urgently get funding and suggests to extend sponsorship in exchange for a part of the funding to be transferred directly to the head of the unit;
  • Misappropriation/embezzlement: for example, the director of a company wants to conclude a sponsorship agreement with a municipal body that stipulates that a building in the municipality is to be named after the company in exchange for annual funding for a certain period of time; the head of the municipal district who is also the mayor of a town thereof offers the company to dispose of municipal estates free of charge if it increases the amount of its sponsorship;
  • Abuse of the benefits provided by the corporate recipient of funding: for example, the tickets to a famous music festival provided to the corporate sponsor/donor by the organising association can be used by the company to convince an official who wants to attend the festival to speed up getting the administrative authorisation for its organisation;
  • Misappropriation of the funding provided to the recipient organisation: for instance, the organisation can allocate a part of the funding to bribe an official authorised to decide on the supplier under a state contract that the organisation wants to win.

The paper states that the risks of the aforementioned offences increase if there are the following factors in place:

  • Geographical location of the recipient organisation: the prevention of corruption can be hampered by the difference between the norms adopted in the region where the recipient organisation is located and the rules applicable in the region of the sponsor company/donor, as well as the location of the recipient of the funding in the regions with less strict anti-corruption control (oversight);
  • Participation of public bodies and organisations in sponsor and charitable activities;
  • Lack of compliance programmes in recipient organisations;
  • In a number of cases, the desire of the sponsor/donor to have a considerable public exposure as self-promotion: in this case the sponsor company/donor can commit a corruption offence to be the one to reach the deal on sponsorship/donation;
  • High competition both between recipient organisations and sponsor companies/donors;
  • Short time limiting the possibility to duly assess the vulnerability of sponsorship/charitable activities to corruption in order to ensure that the funding provided is used for its intended purposes;
  • Lack of a structured decision-making process with regard to the provision of sponsorship and/or donations etc.

In order to prevent and combat corruption in sponsorships/donations, the authors of the Guide put forward the following recommendations:

  • Ensure that sufficient resources, including human, technical and financial, are allocated to support sponsorship and charitable activities;
  • To appoint, as may be appropriate, a person responsible for processing the applications for sponsorship and charitable assistance but excluded from decision-making;
  • Adopt decisions on providing sponsorship and/or charitable assistance in a collegial manner, for example, in the framework of a dedicated commission that takes final decisions but does not initially consider the applications; the commission should also see the participation of the heads of anti-corruption, control (supervisory) and internal audit divisions, as well as any other professionals with the necessary qualifications and responsibilities;
  • Ensure the prevention and management of conflicts of interest of all persons involved in the provision/receipt of sponsor and/or charitable assistance, in particular, by introducing the obligation to disclose interests and establishing the procedure for removing persons in conflict-of-interest situations from decision-making;
  • Detect and incorporate in the general list of risks corruption risks that arise due to the sponsorship and charitable activities, including the risks of establishment of intermediary structures, i.e. corporate foundations, endowment funds, associations; these risks can depend on the sector of activities, organisational structure, size of the company and its geographical location;
  • Adopt the policy and procedures related to the sponsorship and charitable activities in line with the codes of conduct and anti-corruption norms of the organisation, indicating the permitted operations and step-by-step description of processes; in this context, it is recommended taking into consideration the corruption risks detected that in practice can differ from those reflected in the documents, for instance, for the parent and subsidiary organisations;
  • In the event that intermediary structures are created: involve qualified persons who have undergone anti-corruption due diligence in the management of these structures; adopt in-house rules and procedures to prevent and manage conflicts of interest for these structures; ensure collegial decision-making on the allocation of funding; oblige these structures to submit all administrative and accounting documents to the parent company;
  • Compile a written contract with an anti-corruption clause for each agreement to provide sponsorship and/or charitable assistance, formally stating the respective obligations of the parties and their commitment to countering corruption;
  • Conduct anti-corruption training of all persons involved in sponsorship and charitable activities;
  • Adopt internal due diligence procedures with regard to the third parties and projects, conduct these verifications in a mandatory manner in the framework of sponsorship and charitable activities, requesting information on the recipient organisation, the existing corruption risks for the organisation, measures to prevent corruption in place and information allowing the detection of indicators of conflicts of interest;
  • Provide the employees of the recipient organisations with the possibility to disclose offences through internal reporting channels of the sponsoring organisation/donor;
  • Establish special control of accounting operation associated with the sponsorship and charitable activities, as well as of the financial and material flows between the sponsor organisation/donor and the respective recipient organisations;
  • Conduct regular assessment of effectiveness of anti-corruption measures in sponsorship and charitable activities and adjust them to the existing needs in a timely manner.
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