The Rules of the Road

Relationship Building with Integrity

 CTEBA Is Supported By
The Following IBM Policies
Business Conduct Guidelines
In our day-to-day business activities, we may offer and receive customary business
amenities (like meals and entertainment) and, in limited circumstances, gifts, to
promote IBM products and services, build goodwill and strengthen working
relationships. You must follow IBM processes and obtain required pre-approvals
before giving or receiving business amenities and gifts.

Review Corporate Instruction FIN/LEG 168 Business Amenities and Gifts for
additional guidance.

Get your manager’s approval before giving business amenities and gifts to others.
Finance and Legal approval must be obtained through the Compliance with
Transportation, Entertainment, and Business Amenities (CTEBA) process before
giving amenities over a certain value to government officials, employees of
government entities, GOEs or, in some countries, employees of commercial entities.

Corporate Instruction FIN/LEG 168:

All business amenities and gifts require a legitimate business purpose AND must
be:

• appropriate in nature and venue

• reasonable in cost and frequency
• not used to secure improper advantage or preferential treatment
• not prohibited by law or known practices of recipient

DO NOT USE BRIBERY TO GET BUSINESS!

 Audio script
IBM’s position on bribes and kickbacks is simple: IBM will not tolerate any employee’s
involvement in bribery or kickbacks. This applies whether you are dealing with an External
Party in the private or public sector, whether the party is a current or prospective client,
Business Partner, or supplier or has some other relationship with IBM – such as a government
regulator, tax authority or licensing agent.

It is against IBM’s policy to offer or give a business amenity and gift to anyone if it is not per-
missible under applicable law or regulation. The laws and regulations regarding offering or
giving a business amenity and gift to External Parties vary from country to country and must
be adhered to. You must not use any personal funds or intermediaries like Business Partners,
agents, or consultants to circumvent the law and IBM’s policies. All expenses must be
reasonable (not lavish, inappropriate, or too frequent). They must be actual expenses
incurred in good faith – in other words, not used to improperly influence a decision – and be
directly related to a legitimate business purpose.
 Business Amenities And Gifts
Six categories of Business Amenities and Gifts
are defined in FIN/LEG 168

Meals Transportation Accommodation

• Breakfast • Airfare • Hotel
• Lunch • Train • Motel
• Dinner • Ferry • Inn
• Appetizer • Car rental
• Dessert • Ground
• Beverages transportation
• Parking

Event
Entertainment Gifts Entrance Fees
• Tickets to a sporting • Promotional item, • Seminar, Trade Show
event or cultural e.g., (face-to-face
activities 1. IBM logo or virtual)
• Music merchandise • Education or lecture
2. Pens
3. USB keys
• Book / CD

Important: Fair market value/estimates for all amenities must include applicable
packaging, shipping, taxes/VAT, service fees, and gratuities.
 Audio script
As per Corporate Instruction FIN/LEG 168, “business amenities” are defined as six
categories:

• Meals,
• Transportation,
• Accommodation and Lodging,
• Entertainment,
• Gifts,
• Waived Business Events’- Entrance Fees

Please take a moment to review the examples illustrated to become familiar with them
and note that fair market value/estimates for all amenities must include all applicable
taxes/VAT, packaging, shipping, service fees and gratuities.
 What Is CTEBA And When Is It Required?

Compliance with Transportation, Entertainment and

Business Amenities (CTEBA)

What is CTEBA?
9 Corporate wide mandate
9 Pre-approval process
9 Before offering business amenities and gifts to
External Parties

When is it required?
CTEBA applies to the provision of business
amenities and gifts to GOEs (Government Owned
Entities) and all Commercial Parties in countries
that require CTEBA pre-approval, as listed in the
CTEBA Community, which are above the
applicable clip level.

Processes are in place to detect

CTEBA bypasses and drive accountability
 Audio script
If you will provide business amenities and gifts to an External Party, then you must be
aware of, and comply with, the Compliance with Transportation, Entertainment and
Business Amenities (CTEBA) process.

Here’s how it works – before offering any business amenity and gift over the applicable
CTEBA clip level to any employee of a Government Owned Entity or any Commercial Party
in the countries listed in the CTEBA Community, you must obtain prior management,
Finance, and Legal approval through the CTEBA tools.

By ensuring that business amenities and gifts offered to External Parties comply with IBM
policies, CTEBA helps protect IBM and its employees from claims that these business
amenities and gifts are being improperly used as bribes to help IBM win business.

If CTEBA does not apply (because there is no GOE or Commercial Party from a country
requiring CTEBA pre-approval involved, or the amenity is below clip), you must comply with
FIN/LEG 168 and secure management and other required approvals before offering
business amenities and gifts to External Parties.

It is your responsibility to comply with CTEBA. If you are unsure about whether it applies or
how to secure approvals, contact your CEM Compliance Advocate.
 Who Is A Government Owned Entity?
Anyone employed by a government agency or
government -owned or government- controlled entity
Examples include:

Clerk who Employee of IT manager at a

processes permits state-owned utilities government
controlled company

IBM divides GOEs into two categories: Government Entities (GEs) and State Owned
Enterprises (SOEs).

GEs include:
• Governmental Bodies (national, state, local or municipal)
• Government-owned or -controlled schools, hospitals, utilities, etc.
• Public international organizations (e.g., United Nations)
• Companies subject to public procurement laws

SOEs include:
• any other type of companies, both privately held or publicly traded, that are
owned, controlled, organized, or sponsored by a GOE
• e.g. a public company where the largest shareholder is a GOE with 15% or
more shares

It can be challenging to determine which

companies are GOEs, particularly in countries where
state-owned enterprises or state
investments in companies are common
 Audio script
Special attention must be paid to government-owned or -controlled entities which we refer
to as GOEs. You must determine whether an entity (customer, supplier, prospect,
consultant, Business Partner or other) is a government entity, or government-owned or
-controlled entity, or an employee or representative of the same, before offering business
amenities and gifts.

First, let’s clarify the terms. We differentiate two categories of GOEs: Government Entities
(GEs) and State-Owned Enterprises (SOEs).

Certainly, Government Entities include traditional government agencies, departments,

territories, branches, instrumentalities and public enterprises, whether regional, national,
or local, such as national tax authorities and local municipalities, as well as:

• Government-owned or -controlled schools, utilities and organizations licensed to

provide public services;
• Public international organizations;
• Entities subject to public procurement laws and regulations.

State-Owned Enterprises can be any other type of entity even if privately held or publicly
traded, that are owned, controlled, organized, or sponsored by a GOE or a government
official. That would also include commercial businesses operating under government
power of attorney.

Pay particular attention if you are dealing with US Federal, State or Local entities, including
public hospitals and public universities.

In the US, the law is very strict – there are monetary caps on provision of business
amenities that vary by business amenity type, State, or branch of government. IBM also
has reporting obligations if business amenities and gifts are offered to government
employees in some circumstances.

If you are offering business amenities and gifts of any value to US Federal, State or Local
entities, be sure to use the applicable CTEBA tool and submit a request for pre-approval.

IBM has a repository where you can check if an External Entity is a Government Owned
Entity or not. The link can be found on the Resources page in this module.
 What are CTEBA Clip Levels?
Clip Levels are dollar values assigned to business amenities and gifts to
establish a threshold above which approval (i.e. Line management, Finance, and
Legal review and approval) is required.

Which CTEBA Clip Level applies?

• Clip levels vary by country, amenity type, External Entity type (GE, SOE,
Commercial)
• The venue country clip levels apply except when an External Entity’s home
country is an Exception Country.
• When an External Entity is from an Exception Country, apply the clip level from
the country where they are from (do not use venue country clips) to determine if
CTEBA pre-approval is required. A listing of Exception Countries can be
found in the CTEBA Clip Level file found here
• When the External Entity is from a country where Commercial Parties require
CTEBA pre-approval, ALL External Entities from these countries (not limited to
GOE) require CTEBA pre-approval when amenities exceed the clip levels. A
listing of countries where Commercial Parties are subject to CTEBA pre-approval
can be found here

Note 1: External Entities from the US defined as US State/Local and US Federal, are
considered exceptions and their clip levels apply regardless of where the amenities
are offered.

Note 2: For External Entities from the US defined as Government Entity (GE) and
State-Owned Enterprise (SOE), apply the venue country clip levels to determine if
CTEBA pre-approval is required.

If you have questions regarding which CTEBA clip

level applies, contact your CEM Compliance Advocate
 Audio script
Business amenities and gifts are assigned a clip level, or dollar value to establish a
threshold above which approval is required.

Clip levels vary by country, amenity type, and whether an External Entity is a GE, SOE, or
Commercial.

The venue country, or the destination country clip levels apply except when an External
Entity’s home country is an Exception Country. When an External Entity is from an
Exception Country, apply the clip level from the country where the entity is from to
determine if CTEBA pre-approval is required. A listing of Exception countries can be found
in the CTEBA Clip Level file at the link provided.

If your External Entity is from a country where Commercial Parties require CTEBA pre-
approval, ALL External Entities, not just GOEs, from the country require CTEBA pre-
approval when amenities exceed clip levels. Visit the CTEBA community at the link
provided for a listing of countries where Commercial Parties are subject to CTEBA pre-
approval.

When dealing with External Entities from the United States, those defined as US State/
Local and US Federal, are considered exceptions, therefore their clip levels apply
regardless of where the amenities are offered. Furthermore, External Entities from the
United States defined as Government Entity or GEs, and State Owned Enterprises or SOEs,
require the venue country clip levels to be applied to determine if CTEBA pre-approval is
needed.

Remember, if you have questions regarding which CTEBA clip levels apply, contact your
CEM Compliance Advocate. A link to the listing of CEM Compliance Advocates is available
on the Resources page of this module.
 Do Commercial Parties require
CTEBA pre-approval?
• While some anti-corruption laws focus on government bribery, the principles
can also apply to Commercial (i.e. non-GOE) Parties. A growing number of
countries maintain strict commercial bribery laws or present other risk factors
that make the provision of business amenities and gifts to Commercial Parties
in that country higher risk.

• Where business amenities and gifts to Commercial Parties may create the
appearance of bribery, corruption, or other impropriety, such business
amenities and gifts to Commercial Parties must comply with CTEBA
pre-approval requirements.

• A listing of countries that require CTEBA pre-approval for Commercial Parties

can be found here

• When CTEBA pre-approvals are not required (non-GOEs or Non-CPICCs) you

must follow guidance detailed in IBM Corporate Instruction FIN/LEG 168.

Where Do I Determine Entity Classification?

• Check the CTEBA Repository to determine whether your External Entity is
Commercial, GOE, or Commercial that requires CTEBA pre-approval.
•

If no result is found after checking the CTEBA Repository,

do not assume the External Entity is Commercial,
contact your CEM Compliance Advocate for assistance
 Audio script
While some anti-corruption laws focus on government bribery, the principles can also apply
to Commercial (i.e. non-GOE) Parties. Many countries maintain strict commercial bribery
laws or present other risk factors that make the provision of business amenities and gifts
higher risk to Commercial Parties in that country.

Where business amenities and gifts to Commercial Parties may create the appearance of
bribery, corruption, or other impropriety, such business amenities and gifts to Commercial
Parties must comply with CTEBA pre-approval requirements.

To determine whether a country requires CTEBA pre-approval for Commercial Parties, click
on the link provided here or visit the CTEBA community for the listing.

When CTEBA pre-approvals are not required, i.e. non-GOEs or Commercial Parties from
countries that don’t require CTEBA pre-approval, you must follow guidance detailed in IBM
Corporate Instruction FIN/LEG 168.

Lastly, check the CTEBA Repository to determine whether your External Entity is
Commercial, GOE, or Commercial from a country that requires CTEBA pre-approval.
If no result is found, do not assume the External Entity is Commercial from a country not
requiring CTEBA pre-approval, contact your CEM Compliance Advocate for assistance.
 Your Responsibilities

If you are providing or arranging the business amenity:

• Be sure that there is a legitimate business purpose

• Follow the CTEBA requirements – get the required pre-approvals
• Be sure that what you are offering is reasonable
• Be aware of even the appearance of impropriety!
• Be sure to enter your External Party expenses accurately and completely in
Concur using the Top Tips found here

If you are only a participant:

• Be aware of IBM’s policies
• If you think a business amenity and gift is unreasonable or does not meet
IBM’s policies or legal requirements, please consult with your manager or use
any IBM Communication Channel to report.

Review the Tips on the following pages

 Audio script
You are taking this education because you are either providing or arranging a business
amenity and gift or are a participant. For example, you’re arranging a business meal or
you’re going to be participating as a guest in a meal.

If you are providing or arranging the business amenity and gift, you must comply with
applicable laws and IBM’s requirements. Make sure the business amenities and gifts are
reasonable and there’s a legitimate business purpose. Follow the CTEBA requirements and
secure the required pre-approvals. Additionally, be sure to enter your External Party
expenses accurately and completely. For guidance on how to enter External Party expenses
in Concur, check out the Top Tips available through the Travel & Expense community via
the link provided.

As a participant we rely on IBMers like you to be aware of IBM’s obligations and speak up
if you think business amenities and gifts are unreasonable or if you think they don’t meet
applicable laws or IBM’s policies. Consult with your manager, Legal, Trust and Compliance,
or use an IBM Communication Channel to report your concerns.

In most cases, business amenities and gifts are appropriate when they are:

• Incurred for a legitimate business purpose,

• Appropriate in nature and venue,
• Reasonable in value, and
• Not used to secure improper advantage or preferential treatment

The following pages will provide tips to consider when planning.

 Transportation And Accommodations

Must have a legitimate Adhere to IBM’s Travel Policies

business purpose and Guidelines

Real examples of improper travel:

• Contracts establishing training trips when the actual destinations were

the Grand Canyon, Napa Valley, Disneyland, and Universal Studios as
well as Las Vegas, New York City, Chicago, Washington D.C., and Hawaii

• A “Factory Acceptance Test” which mostly comprises sightseeing

activities

No accompanying person No side trips/sightseeing

(such as spouse) paid by IBM
 Audio script
When you plan a trip on behalf of an External Party, the trip should have a legitimate
business purpose, such as the demonstration of IBM products, services, or solution, or
providing training or education to the client. The destination should match the purpose –
for example, you should not invite a client for a product demonstration in Las Vegas when
IBM does not have a proper demonstration center there.

You cannot invite an External Party’s spouse to a business trip unless this spouse has a role
appropriate for the business trip.

The agenda of the trip should correspond with the business purpose of the trip. For
example, if the trip is to visit an IBM demonstration center in California, you should not add
another 5 days in Hawaii. IBM also does not pay for any side trips or sightseeing tours for
GOEs or Commercial Parties in countries that require CTEBA pre-approval. As required by
IBM policy, secure CTEBA approval for transportation and accommodation.

Listed are two real examples of travel offered by other companies to GOEs – these
companies faced fines, penalties and reputational harm as a result.
 Meals And Entertainment

• Must have a legitimate business

purpose
• Reasonable cost, not lavish or
excessive
• Appropriate venue
• Frequency of meals should be
appropriate for the business event
or meeting
• No accompanying person (such as
spouse or family member)
Meals

• Must have a legitimate business

purpose
• Limited to sports or cultural events
only
• Appropriate venues only
• No adult entertainment or karaoke
bars
• IBMer must accompany the client
• No GOEs
• No accompanying person (such as
Entertainment spouse or family member)
 Audio script
When you plan a business meal with an External Party you should use the time at the table
to build a relationship and have a business discussion.

The cost of the meal should always be reasonable. Choose a place that is proper for a
business meal.

Undoubtedly you want to take your External Parties to a nice restaurant and provide them a
great experience, however you must operate within reason!

Avoid private dining rooms or unique dining experiences. As spectacular as they might be,
they are likely to give the appearance of impropriety. Do not forget to plan accordingly to
obtain your required CTEBA pre-approvals if you will be providing a meal to a GOE or
Commercial Parties in countries that require CTEBA pre-approval over the clip level.

Also, the frequency of business meals matters – ensure you are not taking the same
External Party to meals too often.

Since it is a business meal, a GOE’s or Commercial Party in countries that require CTEBA
pre-approval’s spouse or family should not be invited.

As for entertainment, IBM limits entertainment to only sporting or cultural events. You
cannot purchase the tickets and have the External Party go by themselves – you or another
IBMer must accompany them and use the opportunity for “talk time” and business
discussions.

As with the other categories – reasonableness is key. What is reasonable is not always
black and white – you must apply good business judgment.
 Gifts And Event Entrance Fees

Gifts Event Entrance Fees

• Exercise extreme care when • Business event attendance /

providing gifts
• No cash, gift cards, or other cash
equivalents
• Insignificant or nominal value only
registration fees, e.g. THINK
• Do not confuse tickets to
concerts, sporting events, entrance
fees for golf, etc, as Event Entrance
Fees, they are Entertainment
• Event entrance fees where
transportation and accommodation
are also included

Examples:

• In 2014, Avon Products Inc. paid $135 million fines to settle FCPA charges.
- Improper gifts: Louis Vuitton, Gucci and high expense meals and
leisure travel.

• In 2019, Juniper Networks paid the SEC $11.7 million to settle FCPA offenses
- Sales employees of the company’s subsidiaries falsified trip and
meeting agendas for customers, including public officials, that
understated the real value of entertainment involved on the trips.
 Audio script
While gifts to GOEs and Commercial Parties in countries that require CTEBA pre-approval
are not prohibited in all cases, gifts provide a personal and pecuniary benefit to the
recipient. There should be a legitimate purpose to offer the gift, such as to promote the
brand or to foster good will. To award the placement of an order is not a legitimate purpose.

Gifts should generally be insignificant in value - such as an IBM advertising/marketing

novelty with the IBM logo. Cash, gift cards, or other cash equivalents are forbidden.

Please be aware that under some local laws providing a gift is prohibited. Further, the
internal policy of the invitee may prohibit the provision of a gift. Listed are two real
examples of gifts offered by other companies to GOEs – these companies faced fines,
penalties and reputational harm as a result.

As for Event Entrance Fees, these are limited to fees offered to invitees to attend business
related events (such as the registration fee for a conference or IBM event like Think).
Providing tickets or passes to sporting events or other cultural events are not Event
Entrance fees, those are considered as Entertainment.
 Where Can I Find Help?

Search for CTEBA on w3, and bookmark the following resources:

Have a question? CEM CTEBA

Ask the Blueseller Compliance Repository
Chatbot Advocates

CTEBA IBM Event

Community Marketing Community
 Audio script
Lastly, there are several resources available to you. We recommend you search for CTEBA
on w3 and bookmark these links as FAVORITES to quickly access them in the future. Take
advantage of the CTEBA Blueseller Chatbot for questions on CTEBA. If you can’t find the
answer, reach out to your CEM Compliance Advocate.

Not sure if your External Entity is a GOE or Commercial Party in countries that require
CTEBA pre-approval, you can check the CTEBA Repository. In addition to these resources,
you will find a host of other helpful information on the CTEBA and IBM Event Marketing
Communities.