There is often discussion of “victims” of Foreign Corrupt Practices Act violations. Yet, I genuinely believe that one of the seldom-discussed “victim” categories of this new era of FCPA enforcement and resulting compliance “best practices” is foreign third parties.
For starters, a business organization can be exposed to FCPA anti-bribery violations based on the conduct of various third parties (assuming the “knowledge” component of the third-party payment provisions is met). Moreover, based on current enforcement theories, the mere “improper” recording of foreign third-party transactions may constitute a books and records violation and the enforcement agencies frequently find internal controls violations based on various alleged deficiencies concerning a business organization’s relationship with foreign third parties.
Because of these legal provisions (and aggressive and dubious enforcement of these provisions), an extensive and elaborate series of “best practices” have developed around pre-engagement, engagement, and post-engagement of foreign third parties.