The holiday season is supposed to be about celebration and connection—but for compliance teams, it is also peak risk season for gifts, entertainment, and hospitality. As vendors push to close year-end deals, employees look to strengthen relationships, and invitations start flowing, gray areas multiply: What’s an acceptable gift? When does entertainment turn into an improper benefit? How do you empower people to say “no” without damaging relationships?
In a recent webinar hosted by GAN Integrity's Kimberley Allan, Michael Volkov, CEO of Volkov Law Group, and Francesca Lulgjuraj, Associate General Counsel and Global Compliance Director at Starr Insurance, explored how organizations can use the holiday period not just to manage risk, but to reinforce a culture of integrity, transparency, and trust. Their message was clear: with the right mix of practical policies, connected processes, and thoughtful communication, holiday gifting can become a powerful proof point for your ethics program, not a liability.
Start With Risk, Culture, and Context
The foundation of strong, risk-aware gifting compliance begins long before the first holiday basket shows up at reception. It starts with understanding the organization’s specific risk profile: its industry, business model, geographies, and the kinds of relationships where gifts and hospitality are most likely to create pressure or perceptions of impropriety.
Three building blocks stand out:
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Risk identification: Map where risky situations actually occur in the business, especially around year-end contracts, vendor negotiations, and relationship-heavy functions.
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Cultural awareness: Avoid one-size-fits-all, “bright line” rules that ignore local norms, but do not let cultural expectations become an excuse for excess. Policies should be intelligently informed by local practices without losing sight of ethics and regulatory requirements.
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Integrated awareness: Treat holiday gift communications as part of the routine compliance program, not as isolated campaigns. When seasonal reminders are connected back to the code of conduct, conflicts of interest framework, and anti-corruption expectations, employees see consistency instead of one-off “holiday rules.”
The holiday period is also a timely moment for leadership to reinforce the company’s culture of integrity. Leadership messages around the holidays acknowledging the desire to celebrate, while reminding everyone that the organization’s commitment to ethics does not take time off can underline that gifts and hospitality are part of a broader culture, not just a technical rule set.
Bringing Gifting Gray Areas Out Into the Open
Many organizations struggle less with obvious violations and more with gray areas: situations that might technically fit within thresholds but feel uncomfortable or ambiguous. These gray zones are exactly where a strong compliance function adds the most value.
Typical gray areas include:
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High-value hospitality that edges from “business entertainment” into something more lavish, such as premium sports events or exclusive debates with ticket prices in the hundreds or thousands.
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Gifts or entertainment that begin as joint events but effectively become unilateral gifts when the host does not attend.
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Repeated low-value interactions that individually fall under limits but, in aggregate, form a pattern indicating attempted influence.
Most people do not see themselves as engaged in misconduct and often genuinely believe there is “no harm” in accepting something that feels generous but not obviously wrong. Behavioral ethics shows that humans are naturally inclined to reciprocate when someone does something for them, which is precisely why seemingly modest benefits can still create conflicts of interest or influence.
Rather than trying to script rules for every possible scenario, effective programs tend to:
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Use a few concrete, realistic examples to illustrate where the line sits.
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Anchor guidance in company values, not just numerical thresholds, so employees have a framework to recognize when something “doesn’t feel right.”
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Encourage employees to treat that uneasy feeling as a signal to pause and consult compliance, rather than push it aside.
Documentation is critical here. When a situation is close to the line, recording the reasoning, context, and decision helps demonstrate the absence of corrupt intent. If regulators or investigators later scrutinize the transaction, a clear paper trail showing a good-faith analysis grounded in policy and values is a powerful defense.
Practical Guardrails for Gifts and Entertainment Compliance
Several recurring risk patterns and practical guardrails emerged from the discussion on holiday gift and entertainment compliance.
Differentiate gifts from entertainment
Many organizations set different pre-clearance limits for gifts versus entertainment, because the risk profile changes when someone from the organization is actually present. Event tickets are a classic example:
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When an employee is invited to attend an event with a business partner, it is typically treated as entertainment under one set of limits.
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When the business partner cannot attend and offers the tickets anyway, the nature of the benefit changes; it becomes a gift and should be evaluated under lower thresholds and stricter rules.
High-value events such as exclusive sports tournaments or premium corporate hospitality can reach thousands in value, making them highly sensitive from an anti-bribery and perception standpoint. Clear policy language on when entertainment effectively becomes a gift, and how to treat those transitions, helps approvers and employees make consistent decisions.
Respect recipient-side rules
Sometimes the tightest constraints come not from internal policy, but from what the recipient is allowed to accept. In some countries and sectors, strict local rules limit what doctors, officials, or other professionals can receive in terms of meals and gifts, sometimes at relatively low values. If employees are unaware of those external obligations, they may inadvertently put partners in violation of their own policies or regulations.
Building checks for recipient policies into gift and hospitality processes, especially for government or heavily regulated sectors, helps avoid these issues.
Don’t be driven by “everyone else is doing it”
Business teams often argue that “competitors are doing more,” whether in hospitality, event spend, or sponsorship. Claims about competitor behavior are frequently anecdotal or exaggerated and cannot, by themselves, justify pushing the boundaries of policy and risk tolerance.
A more sustainable approach is to:
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Stay informed about market norms without allowing them to dictate ethical standards.
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Focus on modest, proportionate hospitality tied to legitimate business purposes.
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Use documentation to show how decisions were grounded in business logic and ethics, not in a race to match or exceed what others appear to be doing.
Watch hospitality-heavy marketing and site visits
Hospitality tied to marketing visits or site tours is a particularly high-risk area. Bringing customers, prospects, or officials to a facility can be entirely legitimate when there is a genuine, substantive agenda (product demonstrations, technical briefings, or financial discussions) but can slide into a cover for leisure trips if agendas are vague or falsified.
Empowering Employees to Say “No” the Right Way
Even when people know a gift or invitation is questionable, they often struggle with how to decline without sounding rude, ungrateful, or “tone deaf.” This human challenge is one of the most practical (and most overlooked) areas where training can help.
Effective training does more than list rules; it gives people language and scenarios. Employees can be equipped to:
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Clearly explain that company policy does not allow acceptance of certain gifts or hospitality, while offering an alternative way to connect, such as a simpler meeting or lower-value event.
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Escalate unusual invitations, especially high-value or open-ended offers, for pre-clearance before responding, instead of improvising on the spot.
Many employees are, in fact, more concerned today about what might happen if they accept something inappropriate than if they politely decline. Compliance programs can build on that growing awareness by providing practical scripts, FAQs, and quick-reference guidance that make it easier to do the right thing in real time.
Automation, Monitoring, and the Role of AI in G&E Compliance
Another strong theme is the need to move away from manual, email-based approval and tracking processes toward more automated tools for gifts, entertainment, and hospitality.
Automation within gifts and entertainment solutions helps by:
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Making disclosure and pre-clearance faster and easier for employees, which increases adoption and reduces the temptation to bypass the process.
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Allowing low-risk, low-value activities to be handled by business managers within defined thresholds, freeing compliance to focus on genuine gray areas and higher-risk scenarios.
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Enabling systematic monitoring, including pattern analysis and anomaly detection, rather than relying solely on isolated approvals.
Advanced analytics and AI are increasingly part of this monitoring layer, helping to spot patterns such as repeated spending just under approval thresholds or clusters of activity tied to particular vendors, events, or individuals.
At the same time, AI introduces new fraud risks. There is a growing concern about AI-generated fake receipts or documentation designed to slip past traditional controls. In this context, accounts payable and receivable teams remain critical gatekeepers, trained to recognize anomalies and escalate suspicious documentation.
Vendor fraud more broadly is a rising concern for finance leaders, making close collaboration between finance, procurement, and compliance crucial as control frameworks evolve.
Connected Compliance: Gifts, Conflicts, Third Parties, and Beyond
Gifts and entertainment disclosures do not exist in isolation; they intersect with conflicts of interest, third-party risk, anti-corruption, and even financial crime.
Key connections include:
Gifts and conflicts of interest
Accepting gifts or hospitality outside policy parameters can create the appearance of impropriety, even when no explicit quid pro quo is involved. Investigations into conflicts of interest often uncover related financial irregularities or broader ethical concerns, underscoring how closely these issues are linked.
Gifts and third-party risk
Vendors and intermediaries may use gifts or entertainment as a way to gain or retain business, including attempts to work around their own internal policies or those of the organization receiving the benefit.
Gifts and anti-corruption
Under laws such as the FCPA and the UK Bribery Act, anything of value given with the intent to influence decision-making can be problematic, regardless of whether it is labeled as a gift, entertainment, donation, or sponsorship.
A “connected compliance” perspective treats gifts and entertainment as one node in a wider risk network. This means integrating data and processes across conflicts of interest disclosures, third-party due diligence, gifts and hospitality workflows, and even expense management and accounts payable reviews. It also means recognizing the role of gatekeepers—such as finance reviewers—in spotting anomalies and patterns that may indicate abuse.
Extending Culture and Codes to Third Parties and Contractors
Finally, there is the question of how to ensure that third-party professionals and contingent workers (who often function like employees) are aligned with the company’s code of conduct and tone from the top.
Best practices include:
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Incorporate contingent workers into the risk assessment, especially where they sit in high-risk roles connected to gifts, entertainment, approvals, or payments.
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Extend targeted training and communications to these populations, tailored to their roles and exposure.
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Recognize that in some jurisdictions (such as certain Latin American markets and parts of the financial sector) regulators explicitly expect organizations to include contractors in ethics and compliance communications and training.
If contingent workers act as the face of the organization, then the organization’s culture, policies, and expectations need to reach them as clearly as they do full-time staff. Holiday gifting is one of the clearest arenas where that alignment, or lack of it, quickly becomes visible.
Interested in learning more about gifts and entertainment compliance during the holiday season and beyond? Watch our full webinar featuring compliance experts.