Anti-corruption Compliance Guide

Why do companies have to create and implement anti-corruption policies and procedures. The answer is easy: to meet the legal compliance obligations and mitigate corruption risks. Corruption creates potential criminal, civil and business consequences. Implementing adequate procedures can help manage these risks while creating a competitive business advantage.

Gan Integrity Inc. has developed a Compliance Program Guide and I have taken the liberty to quote on some of their arguments for risk management:

Liability - criminal and civil penalties for corruption offences can cost your company millions and result in tough prison sentences. Some pieces of anti-corruption legislation have near global jurisdiction and can hold almost any company liable for corruption.

Opportunity - business partners and suppliers are increasingly required to document their anti-corruption compliance programs or risk losing contracts.

Reputation - your company’s reputation is its most valuable asset. Corruption investigations can harm business opportunities.

Blacklisting - companies convicted of corruption offences can be excluded from bidding on contracts. The EU, the World Bank and others blacklist convicted companies.

In this context, your company should perform periodic risk assessments of its internal and external risks. Your company must focus most on managing the most serious corruption risks. Perform a periodic and comprehensive risk assessment to identify and weigh internal and external risks and in turn define your priorities. Remember to work together with those familiar with your company’s processes and sales channels to make effective risk assessments.

Geographical Risks - identify the nature and levels of corruption including relevant regulations in the countries you do business. For instance, the Chinese Compliance Guideunderlines the high risk of official bribery as many Chinese companies are state-owned enterprises.

Sector and Products - your market sector may entail a higher risk of corruption than others. If you operate in sectors dependent on large-scale government contracts or tightly controlled licences your business may be exposed to a higher risk of agents or subcontractors committing a corruption offense on your company’s behalf.

Representatives - make sure to identify current and anticipated future representatives. Different types of representatives have different risk profiles and include third-party agents, consultants and joint venture business partners.

Corruption Types - evaluate risks for the various forms of corruption. Does your company risk encountering big-value kickback payments, or small-value bribery or facilitation payments? Does your company give gifts or donations, and could these be seen as a corrupt influence on their recipients? Keep in mind that some legislation does not distinguish between bribery and facilitation payments.

Keep Records - document your compliance activities, including your risk assessments. This will demonstrate your commitment to fighting corruption, facilitate potential cooperation with authorities, help establish possible legal defences, and demonstrate compliance to your business partners.

Define Priorities - your risks should be evaluated for likelihood, impact and velocity. And tools can be used to help visualize your assessments to distinguish risk levels. Remember, your compliance activities should be proportionate to your risks!

If you need assistance, contact us at the Integrity Initiative – email me under [email protected] contact Gan Integrity, Inc. (www.ganintegrity.com ) directly.

Remember, implementing adequate procedures can help manage risks while creating a competitive business advantage.