FCPAméricas Blog
Transferring Third Party FCPA Due Diligence Responsibility to Your Business Units
7.26.2013
Building third party FCPA due diligence programs can be a daunting task. Reviewing all consultants, agents, distributors, suppliers, and other third parties is often overwhelming for companies with thousands of such relationships. Making sure you have dug deep enough when vetting entities is an uncertain exercise. Getting employees to take seriously the need to consider corruption risks before establishing new relationships can be difficult. FCPAméricas has previously discussed these issues here and here.
One approach to third party due diligence that is gaining steam among larger companies involves moving responsibilities from legal and compliance departments to business units. Putting commercial and sales teams in charge can address many common challenges.
For one, this approach creates an efficient way of managing large numbers of third party relationships. Relying on the chief compliance officer to vet all third parties can be impractical, so making the business units responsible for basic due diligence helps spread responsibility. It ... Read more
World Bank Sanctions “Stock Taking”: Corporate group treatment and other hot topics under review
7.18.2013
The World Bank is asking for your help in a “stock-taking” exercise to evaluate the system by which it sanctions companies and individuals found to have engaged in corrupt, fraudulent, collusive, coercive, or obstructive practices in connection with Bank-financed projects. The consultation is part of a larger review by the Bank’s Legal Vice Presidency and others aimed at improving the system. The final report will be submitted to the Audit Committee of the Bank’s Board of Executive Directors in late 2013. This is a welcomed step toward making a relatively new process better.
To submit your comments in the process, go here.
The request for input comes at a time when the sanctions system is experiencing significant developments. Primary among them is the publication of the Sanctions Board Law Digest... Read more
Latin American Monopolies: FCPA compliance when dealing with the only game in town
7.10.2013
In a recent discussion with a compliance officer of a U.S.-based food products company expanding reach into Latin America, I was told about the company’s difficulties in one particular state in Mexico. The distribution network there was dominated by a monopoly that had been family-owned for generations. Not only was the U.S. company unable to get the monopoly to provide the basic anti-corruption compliance assurances as part of its third party due diligence process, it could not even open up lines of communication with the company’s owners, the ones who would need to give such assurances. Over generations, the family members had grown disconnected from the company’s management even though they still exercised final authority over company operations.
In Latin American countries like Mexico, monopolies are common. And they present common FCPA compliance challenges for companies doing business there. A recent article in the Atlantic entitled “How Mexico Became So Corrupt” discusses the connection between corruption and Mexico’s histor... Read more
