In this episode, I am interviewed by Jonathan Armstrong, a partner at Cordery Compliance in London on the implications of the Paradise Papers and Saudi Arabian corruption crackdown for the compliance practitioner.
What every international business person should absolutely remember that there is no country in the world which makes bribery and corruption legal by statute. That means if and when a government decides to clamp down on what may have been a long-standing accepted business practice, of which you have been an active participant, there is nowhere to hide and very few places to hide. Witness GlaxoSmithKline PLC (GSK) in China in 2013 and 2014 where the Chinese subsidiary unit President returned to China to be criminally charged and convicted. He was summarily deported back to the UK where GSK almost as quickly summarily terminated him from his employment. Now we have the omens of a potentially equally seismic event, this time from Saudi Arabia.
In the Paradise Papers, it exposed mainly US and UK companies which use legal tax evasion strategies by moving to low tax rate havens. While these strategies may be legal, the reputational fallout may be greater for the companies doing business with them. How much do you really know about your third party partners, business venture partners or Supply Chain partners? Why is it important to know with whom you are doing business from the compliance perspective?
What can the compliance practitioner do in both situations to protect your company? What processes do you have in place to prevent or protect yourself from compliance contagion? How will your company respond when regulators or the press comes knocking? All of these questions and many more are raised by these most recent and very public events.
For more information, see my blog post Saudi Arabia Has a Corruption Crackdown – What is Your Response?
What are the implications of the Paradise Papers and Saudi corruption crackdown for compliance?Click to tweet