The U.S. Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act (UKBA), Sapin II and many other Anti-Bribery and Corruption (ABC) laws and regulations around the world make it clear that bribery and corruption is prohibited, illegal and the source of fines, penalties, reputational damage, and in some cases criminal liability. This is particularly true when the bribes are offered to foreign government officials, especially by third parties.
Due diligence on third parties may turn up bribery and corruption concerns within the day-to-day operations of a business. These concerns, referred to as ‘red flags’ are numerous and are often specific to a particular third party, industry or geographic location.
Having adequate procedures in place to notify you of red flags is one step in the process, but how do you appropriately respond to each red flag that may arise?
The first step is to review common frameworks that can help you build policies and procedures that can protect you against third party risk. Some common frameworks are:
- US Federal Sentencing Guidelines
- OECD’s 13 Good Practices on Internal Controls, Ethics and Compliance
- ISO 37001: Anti-Bribery Management System
These frameworks can help you develop a list of common red flags that are unique to you and your organization. The list compiled below is a snapshot that can be used as a starting point to develop an adequate response. Download the full list here.
As always, these are used for demonstrative purposes and your response will require input from Legal, Compliance and other appropriate business partners.
For a more comprehensive list, download the full framework.