Creating A Credible & Defensible Third-Party Program

March 7th, 2017

Complying with the Foreign Corrupt Practice Act (FCPA) is a challenging undertaking as the components of an effective program vary from company to company. In particular, legal and compliance teams often struggle with establishing and maintaining a robust third-party due diligence program. In the event that a third-party violates the law on your behalf, absence of authorization combined with a credible and defensible compliance program will send a clear message to regulators of your company’s commitment to compliance.

Legal and compliance teams often struggle to implement and maintain a cost-effective ethics and compliance program, and specifically, a robust third-party due diligence program. To complicate matters further, while companies attempt to reduce their operating costs, they continue to outsource back office functions and engage third parties. Consequently, their exposure to potential corrupt business practices continues to increase. A company’s compliance program should prevent and detect corruption without creating unnecessary administrative and budgetary burdens.

A third-party due diligence program – however well-intentioned – that only includes a review of sanction and embargo databases as well as basic internet searches will likely not meet regulator’s expectations. Federal enforcement authorities expect companies to develop a due diligence program customized to reflect the organization’s unique risks and operating environment. If not properly managed, the program can easily become cost-prohibitive and present a significant administrative burden. A well designed and executed compliance program can cost-effectively satisfy regulatory demands.

Download "Third-Party Due Diligence: Creating a Credible and Defensible Program" for best practices relating to the systematic vetting of third parties such as resellers, agents, distributors, sales and marketing representatives, and joint venture partners. Get access to:

  • The credible and cost-effective approach of risk-based due diligence
  • The steps involved in the third-party vetting process, including the evaluation of business connections to local government
  • The critical components of an automated third-party due diligence program