Welcome to Episode 4 of Compliance Man Chooses the Target with Tim Khasanov-Batirov. My goal is to highlight matters that should be on agenda of practitioners that deploy compliance programs in industries or countries of active FCPA enforcement. I target three specific matters that you might like to address in the course of implementation of your compliance program. Today we will focus on Industrial & Consumer Goods industry.
Target #1: Politically Exposed Persons
The interpretation of the term politically exposed personis a tricky thing. For instance, you want to engage a law firm, which is owned by a sibling of a governmental official, let say, in Kazakhstan. If you do business in the country where culturally strong family ties extends beyond immediate family members it could be a challenge to define whether a person among many siblings of a particular PEP de-factocould act as a shadow representative so to say of that PEP. How to decrease compliance risks in this situation? The best way would be to the following:
- To find out if your company really needs offered legal services;
- To conduct fair market value estimation of fees to be paid;
- Talk to business people and folks in the professional community (or even better to do detailed background check in addition to due diligence) to find out if your potential business partner enjoys preferential regime before local state bodies being sibling of the governmental official.
Target #2: Construction of Plants
If your company decides to expand, its business by constructing a plant overseas we would recommend accessing the following three areas, which might encompass corruptions risks:
- Approvals of design of your plant by respective foreign regulators;
- Permissions on land allocation and construction permits to be obtained overseas;
- Taxation, which might vary subject to interpretation of the vague tax rules regarding construction works by overseas tax authority.
Target #3: Local Team
Bribes are paid by people. Thus, the most important assurance you want to get is adherence to ethical culture by your team in the fields. How to access whether your FCPA/Ethics program really works even on distance of thousands miles from the HQ? You may want to do self evaluation of your FCPA program using guidance called Evaluation of Corporate Compliance Programsby DOJ: https://www.justice.gov/criminal-fraud/page/file/937501/download I will give you some practical insights regarding this tip in the next episode of the show.
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