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By Patty P. Tehrani, Esq.
We all want to believe we work for organizations that operate ethically relying on well-defined compliance and ethics programs to support this belief. But even the most robust compliance programs are tested from time to time. These tests often arise in the ongoing efforts to battle corruption in all sectors, both private and public. Bribes, kickbacks, and false or unrecorded transactions all too often become part of the way an organization does business in jurisdictions where this is the norm.
The reality is that with an increasing list of global laws and regulations designed to manage corruption, including dire consequences for non-compliance, organizations must make every effort to comply. The U.S. Foreign Corrupt Practices Act (FCPA), the preeminent anti-corruption law, now sits atop of growing list of expansive anti-corruption and bribery regulatory requirements. Collectively, these efforts have created a rigorous enforcement atmosphere in international business where compliance is not optional but the new norm. And customary practices that at one time accommodated non-compliant behavior must now be retired.
The good news is that there are measures your organization can take to avoid corruption risks. Instituting anti-corruption controls under one framework—an anti-corruption program—is an absolute necessity. In doing so, your organization will want to consider some preliminary questions, such as:
Your organization will be in a much better position to manage its corruption and bribery risks and possibly garner points from regulators in the event of enforcement action or other legal liability. Using the the Bloomberg Law practical guidance materials on anti-corruption programs is a great start. The materials outline effective program controls that include:
Before you delve into the anti-corruption assessment, make sure to pay special attention to how you manage third-party engagements. No anti-corruption program can truly be effective without robust third-party management controls. Think of your organization’s current operations and its reliance on third parties: vendors, distributors, consultants, lawyers, accountants, independent contractors, agents—the list can go on and on. Some global organizations use thousands of third parties, so just having a current inventory of who they are is a challenge. And delegating responsibilities, and in some cases full organizational functions, to them does not exonerate your organization for their failures.
Your organization can manage these risks and liabilities by standardizing third-party risk and performance management processes. The Bloomberg Law practical guidance library provides materials to help establish a third-party management framework factoring in important principles that cover:
Having well-defined controls for anti-corruption risks, including management of third-party relationships, is critical to the long-term success of your organization. Some recommendations to help you launch your efforts:
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