More companies are realizing the importance of training their employees on anti-bribery laws, but what about third party risks? Many companies, it would seem are overlooking these critical relationships in their compliance efforts. In a survey conducted by The FCPA Blog, almost 82 percent of companies only sometimes or never train their third-party intermediaries (TPIs) – suppliers, distributors, or financial advisors that are acting on behalf of a corporation – in anti-bribery compliance.
As companies continue to expand globally, there is an increasing need for these specialized consultants. However, TPIs, while necessary, can pose a serious risk. According to The Metropolitan Corporate Counsel, “almost 90 percent of all cases brought under the FCPA involve TPIs.” This statistic is even more troubling when you consider that companies can be prosecuted for actions by their TPIs for which they are totally unaware. So how can your company protect against third party risks?
TPIs, just like your direct employees, must receive adequate FCPA training. As the DOJ continues to enforce anti-corruption laws, businesses are taking a hit. Companies are forfeiting millions of dollars in penalties for the actions of their consultants that most likely received little to no FCPA training. Training can make the difference between being prosecuted or not.
Following last year’s non-prosecution agreement (and $2 million penalty) with the aircraft maintenance company Nordam, the DOJ made it clear that companies should provide extensive training for any staff member who poses a risk to their compliance, which includes consultants. As reiterated in the DOJ/SEC Resource Guide to the U.S. Foreign Corrupt Practices Act, the development of clear policies and the communication of those policies are two key elements in an effective compliance strategy.
Once a policy has been written, it is imperative that organizations implement a system to manage and communicate the standard. If your staff – and your third-party partners – are struggling due to a lack of knowledge, you owe it to your organization and its reputation to provide adequate FCPA training that can provide them with the education they need to make ethical decisions.