Conducting FCPA Due Diligence

fcpa due diligenceUnder the FCPA,a company can be liable for the activities of its agents, consultants, advisers, joint venture partners, and other relevant third parties. As recent cases have demonstrated, Agents are one of the most common channels for illegal payments. Where an Agent acting on behalf of or as the representative of a company pays a bribe to a government official, the company may be held responsible. Therefore, it is important that a policy on selection, appointment, monitoring, and audit of Agents is included as part of an effective compliance program

FCPA Due Diligence

Some organisations conduct FCPA due diligence in order to mitigate the risk that a vendors or clients will engage in an illegal act like bribery. Others go further by helping their vendors or clients to develop their own compliance programs. This, in turn, reduces the risk of non-compliance for the organisation itself, thus, strengthening the management of channel risk.

Those organisations that simply view FCPA due diligence as a cost of compliance. Increasingly, though, companies are coming to the realisation that these programs add substantial value to their business including:

  • Reduction in investigations for alleged illegal conduct
  • Reduction in exposure to scandal from illegal or other unethical or unpalatable activity
  • Reduction in write-offs and returned goods
  • Reduction in parallel imports and counterfeit production
  • Increased margins and better pricing control
  • Increased brand value as an effect of a stronger channel
  • Increased safety factor to customers by embedding channel integrity into the sales and product quality process
  • Increased assurance that your channel partners actually exist as genuine physical entities, with the ability and integrity to protect and promote the property and reputation of your company’s products and brands
  • Increased protection of your company’s reputation