In times of changing foreign bribery legislation, it is more important than ever for a company to be diligent in sufficiently assessing the risk before entering into a new business relationship.
The Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 proposes to introduce a new offence of failing to prevent bribery of a foreign public official, relating to a company failing to prevent the actions of its associates that may constitute foreign bribery.
Austrade provides a template for conducting a risk assessment for associates, which can provide a useful starting point for developing risk assessment procedures specific to an organisation.
Developing an effective risk assessment process: 6 key steps
Engage with the appropriate business area within the organisation to notify of a potential engagement with a new associate and commence due diligence planning.
Conduct an Anti-Bribery Risk Assessment. This should occur where entering into a formal agreement. The following should be considered:
- Nature of the relationship
- Information on potential bribery concerns
- Existing relationship with the company
- Potential associate operates in a high risk sector / industry
- Potential associate operates in a high risk jurisdiction
- Potential associate will be operating with other parties on behalf of the company
Assess the level of due diligence required. The results from step 2 may determine whether further due diligence checks are required before proceeding with the engagement, for example if any ‘red flags’ are identified.
Carry out standard or enhanced due diligence process.
Standard due diligence may include search engine research or business registry checks, whereas enhanced due diligence may include referee checks or independent verification of the information provided.
Austrade recommends that if the search results are suspicious, the third party should be treated as high risk and referred to the appropriate representative or legal team.
Manage risks in accordance with appropriate internal procedures or advice. For example, reinforce the company’s anti-bribery policies and include related terms in the contract.
Ensure the due diligence process is appropriately documented with a clear audit trail.