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FCPA Due Diligence for Third Party Agents used in ACI Houston FCPA Bootcamp
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Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with whichMayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
Uncovering Connections: A Third-Party Due Diligence Checklist
Michael VolkovPartner(202) [email protected]
January 2011
Screen the Initial Terms of Relationship with Third Party
– Review the creation of relationship, or any subsequent changes to responsibilities or countries where agent operates
– Establish procedure for centralized review of contracts to ensure consistent standards
– Depending on size of company, should establish review at highest level within the company
Develop a Different Checklist for Review of Individual Transactions
Purposes of the Due Diligence Checklist
Existence of Relationships with Foreign Government Officials Purchasing Authority
Licensing or other regulatory authorities
Prior History of Bribery and other Crimes
Nature of Services, Compensation and Payment Method
Written contract Representations and warranties on compliance
Right to inspect and audit third-party books
Right to terminate contract if believe violation has or will occur
Basic Issues to Cover
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Guidelines for Due Diligence Checklist
• Do not over-standardize form– Need to tailor to individual circumstances in each country based
on risk
• Before the checklist is completed, need to conduct background check to determine (5-10 year history)– Existence of ties to foreign government officials and
employees
– Existence of any pending or prior investigations of bribery or other criminal conduct or civil violations
• Create written package and record of review and approval process to demonstrate compliance
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Make Sure Checklist Addresses Relationships with State-Owned
Enterprises• Justice Department interprets “foreign official” definition
to include “state-owned enterprises”
• Justice Department has construed definition to apply to private companies in which government ownership stake is as small as 43 percent
• Out of abundance of caution, checklist threshold should be set at 20-33 percent
