Compliance Lawyers - Compliance Attorneys for International Businesses

Archive for April, 2013

Compliance Issues Using Third Party Contractors

Monday, April 29th, 2013

Compliance Issues When Using Third Parties

Global Compliance 

Global Third Party ComplianceThird party actions taken on your behalf are to a significant extent as much as your responsibility as actions taken by your employees.  As such, it is necessary for all parties involved at every level of the transportation and relocation industry to establish effective processes to govern and direct appropriate activities that are conducted on their behalf.

Expectation is that you know the identity of third parties, that you have a process in place to screen third parties, and that you retain control over the activities that they conduct on your behalf.

Your concerns should be raised and special care taken in cases where you do not know who you are doing business with, you use geographically dispersed contractors, you work in different cultures (particularly high risk cultures), and

Know Who You Do Business With

Maintain a database of third parties who you do business with.  The database should include information on the applicable contractor and the process that was followed to conduct due diligence.

Risk Assessment of Third Parties

You should have a system in place to identify the third parties who present the most risk.  Risk factors may include geographic high risk areas (Transparency International Competition index).

Incorporate Due Diligence

Adopt a process for selection of third party contractors based on risk.  Your system should categorize the level of risk that is presented by each subcontractor.

Written Contracts

Written contracts that set forth expectations and standards for third parties must be put in place.

Responsible Individual

One individual with your organization should be designated as being responsible for managing the third party

Be Guided by Red Flags

You should create a list of “red flags” that will alert you to existence of facts that suggest that there may be a higher degree of risk with a specific subcontractor.

Foreign Corrupt Practices Act Summarized

Thursday, April 18th, 2013

FCPA Summary ComplianceThe  as amended by the International Anti-bribery and Fair Competition Act of 1998 (collectively, “FCPA”) was enacted to prohibit bribes and other illegal payments to officials of a foreign government, public international organization or foreign political party by American companies and by foreign persons present in the United States to obtain or retain business or to secure any improper advantage. The FCPA is part of the Securities and Exchange Act of 1934 and contains provisions concerning record keeping and accounting as well as penalties for violations.

The accounting provisions require companies to keep detailed books, records and accounts accurately reflecting corporate payments and transactions. They also require such companies to institute and maintain internal accounting control systems that would assure management’s control over the company’s assets. The prohibited payments (antibribery) provisions are designed to prohibit U.S. citizens and companies and foreign persons present in the United States from using the mails or any instrumentality of interstate commerce corruptly in furtherance of an offer, payment or promise to pay or give anything of value to officials of a foreign government, public international  organization or foreign political party, or (with knowledge or belief that it will go to someone in any such class of recipients) to any person for purposes of influencing official acts (including failures to act) in order to assist in obtaining or retaining business or to  secure any improper advantage.

John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

Tel 715.845.4336
Fax 715.845.2718

Ruder Ware is a member of Meritas Law Firms Worldwide

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