Third party anti-corruption due diligence didn’t stop during the pandemic, but it was different. And, as the world begins to, hopefully, emerge from the pandemic Ashley Coselli, Senior Ethics and Compliance Counsel, Total American Services and Daniel Wendt, Member, Miller & Chevalier suggest in this podcast that companies should now go back to their files and see where there are holes
The two of them will be leading the session Managing the Most Difficult and Most Important Anti-Corruption Due Diligence Projects at the 2021 SCCE Compliance & Ethics Institute, which will be taking place September 19-22.
As you look through the due diligence files you are likely to find that one of the more important pieces missing is the face-to-face interaction that can be so important when gauging the risks posed by a third party. Once travel becomes safe and practical again, it’s important to get those relationship going, especially with high-risk relationships such as those with sales agents and joint venture partners.
Next, determine how effective their compliance programs are, and begin to triage based on the greatest risks. But, they advise, don’t try to do everything all at once. It can just be too much.
Also, invest the time to fill in the knowledge gaps about ownership structure to determine if anyone from the government, a former government official, or even a close family member of one has a stake in the organization.
As you fill in the blanks, make sure to document what you are doing and have done, including the business justification for using a third party. It can be dreadfully difficult during a government investigation five years from now answering why the company decided it needed a third party, how it made the selection and why there were gaps in the due diligence. But, if you have been documenting your actions all along, the challenge is much less significant.
One issue to consider that doesn’t involve the pandemic: Stop periodically to assess your current relationships. Sometimes a third party is brought on to handle one issue, and then over time the relationship expands greatly. Be sure to periodically ask: Is there the necessary due diligence for all the entity is doing, or just what it was initially hired to do?
Listen in to learn more about this very thorny risk area, and then join us virtually or in person at the 2021 SCCE Compliance & Ethics Institute.