Third-Party Due Diligence: Expanding a Compliance Programme to Suppliers and Clients
In a world where the use of third parties in a company’s efforts to expand its business – whether internationally, domestically or locally – is not only inevitable but necessary, awareness of the third party’s activities is critical to ensure success and to prevent liability. The Foreign Corrupt Practices Act (FCPA) and laws around the world that model it prohibits companies from directly or indirectly bribing non-US government officials and commercial entities to obtain or retain business or a business advantage. Indirect bribes expressly include payments made by third parties acting on behalf, at the direction, or with the knowledge of the company.
As part of Latin Lawyer’s The Guide to Corporate Compliance, Second Edition, this chapter discusses practical steps companies can take to expand their compliance programs to mitigate the risks that arise from dealings with business partners and agents, including suppliers and, in certain circumstances, customers. We address the practices used by many companies and expected by regulators, including: conducting thorough background checks or due diligence prior to engaging a third party, educating a third party on the applicable anti-bribery and anti-corruption laws, contractually mandating a third party’s compliance with the same, and monitoring the third party’s actions throughout the life of the contract.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.