Foreign Official Gifts
Even though heads of state have traditionally exchanged gifts as expressions of goodwill, the Constitution (Article I, Section 9) prohibits anyone in the US Government from receiving a personal gift from a foreign head of state without the consent of Congress. Today, the handling of gifts from a foreign official to any Federal Government employee, including the President, is largely governed by the Foreign Gifts and Decorations Act of 1966 and further legislation passed in 1977. Congress has allowed Federal employees to retain any gift from a foreign government, as long as the total US retail value of the gifts presented at one occasion does not exceed an amount established by the General Services Administration (GSA). Foreign official gifts over this minimal value are considered gifts to the people of the United States, which the recipient must purchase from GSA, at fair market value, in order to retain. The White House Gift Unit sees to the disposition of foreign official gifts that the President and First Lady do not retain.
Any gift not from a foreign government official is considered a domestic gift. Domestic gifts to the President and/or First Lady may be disposed of in any manner the President and First Lady wish. If they want to keep a domestic gift, they do not have to purchase it from the Government.
Reasons for Not Retaining Gifts
The President and First Lady keep for themselves only a small percentage of the gifts that they receive. Reasons for this include the following:
President Reagan with a gift
from Vice-President Bush.
The requirement to pay for certain foreign official gifts (see first section).
The White House Gift Unit constantly receives items from the general public, and it is impossible for the President and First Lady to ever see most of them.
To protect the President and his family, the Secret Service requires destruction of food and drink gifts, combustible items which may release fumes, and colognes and other substances that are applied to the skin.
Any gifts retained by the President and First Lady that are not from a close relative including foreign official gifts that they keep may have to be declared in an annual disclosure report to the Office of Government Ethics.
The President and First Lady may have to pay federal taxes on the appraised value of gifts that they keep.
What happens to gifts that the President and First Lady dont keep for themselves?
Most foreign official gifts which the President and First Lady do not retain for themselves are transferred to the National Archives by the Gift Unit, and become part of a presidential library museum collection. Most domestic gifts that the President and First Lady do not keep are given to charitable organizations or other non-Government recipients by the Gift Unit, or transferred to the National Archives for the future presidential library museum.
 During the Reagan Administration, the maximum retainable value was raised, in steps, from $100 to $180.
2 During the Reagan Administration, the law required an annual listing of all retained gifts from any source other than a relative which were valued at $35.00 or more, if the total value of such gifts that were received from that source during the year totaled $100.00 or more. For example, if President Reagan had kept three $35 gifts which he received from a particular individual in 1981, all three gifts would have been declared to OGE on the report for 1981, as their aggregate value would have been over $100.