How to Reduce Your Compliance Risks from Third Parties

In the world of compliance, it’s a good idea to focus on ensuring your employees behave ethically-codes of conduct, compliance policies, procedures, training, etc.-but what about the third parties you work with?

What is a Third Party?

A third party is anyone you deal with that is not part of your company and not your customer. Who can that include?Here’s a short list of some examples:

  • Resellers
  • Distributors
  • OEMs
  • VARs
  • Agents
  • Representatives
  • Brokers
  • Vendors
  • Contractors
  • Sub-contractors
  • Suppliers
  • Consultants
  • Couriers
  • Joint venture partners

But please remember thatnames are not important, it’s what they do that matters. And if “what they do” includes assisting with improper payments under the FCPA, UK Bribery Act or other anti-corruption laws, then those problems can become your problems.

Global Anti-Corruption & Bribery Training

Our training on global anti-bribery and corruption laws seeks to enforce the fact that these laws apply to everyone, including your partners and the other third parties that work with you.

You Can Be Liable for Third Party Anti-Corruption Violations

Most FCPA and anti-bribery/corruption violations involve the actions of channel partners and other third parties. Their actions, even if you weren’t aware of them, can lead to your liability.

Under the FCPA, UK Bribery Act and most anti-corruption laws, if you cannot make a certain payment, provide a gift or “something of value”, give a kickback, act a certain way-then, a third party is not allowed to do it on your behalf.

Ways to Reduce Your Risks in Dealing with Third Parties

It is therefore a great idea and a big step to compliance to try to reduce your risks in dealing with your third parties. Here are some examples of what you can do:

  • Anti-Corruption Training for your third parties
  • Conduct due diligence
  • Enhanced contract language
  • Establish a partner code of conduct
  • Conduct audits/business reviews
  • Targeted communications focused on your company’s expectations

This isn’t always easy and may require explanations that transcend the law, cultural differences, business environments, etc., but in the end these steps can help your partners understand what you expect of them-and also help them meet those expectations.

Compliance starts at home, but remember, know your third parties and reduce those risks, too. Learn more about our anti-corruption training for partners and third parties.