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Unaoil – The Trace International Piece Of The Puzzle


Trace International describes itself as “a globally recognized anti-bribery business organization and leading provider of third party risk management solutions.” (See here). According to Trace, its “due diligence solutions” are “based on internationally accepted best practices and our experience and familiarity with the compliance needs of multinational companies.”

According to Trace, being “Trace Certified” “means that you or your company have completed a comprehensive due diligence process administered by TRACE, the world’s leading anti-bribery standard setting organization.” Trace states that “the successful completion of TRACE certification demonstrates your commitment to commercial transparency, allowing you to serve as a valued business partner to multinational companies” and that one of the advantages of being Trace certified is “gain[ing] a valuable compliance credential that differentiates you from competitors and is widely recognized in the international business community.” (See here).

One interesting piece of the puzzle in the DOJ’s recent announcement of FCPA charges against former Unaoil executives (see here for the prior post) involves Trace International.

According to the DOJ:

“C Ahsani and S. Ahsani conspired with others to make false statements, through interstate and international wire communications, to ‘Due Diligence Organization,” an anti-bribery organization headquartered in the United States whose identity is known to the United States and the Defendants. Due Diligence Organization offered companies due diligence services, including screenings and certifications, which were designed to signal whether a company had met certain anticorruption standards.

Beginning in or around 2006, Rolls-Royce compliance department initiated a new control that required all sales agents to under Due Diligence Organization’s screening and obtain a compliance certification. In order to obtain Due Diligence Organization’s certification and continue doing business with Rolls-Royce, … C. Ahsani, S. Ahsani, and others agreed to cause materially false and misleading information to be transmitted, through interstate and international wire, to Due Diligence Organization in the United States, including false statements that [Unaoil] was not involved in the payment of bribes to foreign government officials. Further C. Ahsani, S. Ahsani, and others provided Due Diligence Organization with business references, including executives [at certain companies] who knew that [Unaoil] paid bribes to win business [for those companies]. C. Ahsani, S. Ahsani, and others caused [Unaoil] to submit false statements so that [Unaoil] could continue to maintain Due Diligence Organization’s certifications until at least in or around 2015.”

According to this article:

“Since 2007, Unaoil has been certified by anti-corruption agency Trace International. This in itself raises serious questions about the worth of such international accreditation.”

This 2016 blog post, authored by Trace President and Founder Alexandra Wrage, stated in pertinent part:

“We have conducted due diligence on tens of thousands of good, serious, well-run companies that have been reviewed (and re-reviewed) to a high, common standard with elaborate checks built into the process to assess the accuracy of the information provided.

TRACE member companies have been full partners in this.  They have helped us “crowd source” better more reliable information; they’ve been quick to share concerns with us and generous with suggested improvements to our due diligence processes.

And then came UNAOIL

We are not naive.  We knew that the sheer volume of due diligence we handle meant we would eventually have a UNAOIL in our midst. That is, a TRACEcertified entity under criminal investigation.


We can hope these cases come along only rarely.  And we can take some satisfaction at how the compliance landscape has evolved and the lengths, lies and doublespeak these guys were driven to in order to circumvent controls and advance their schemes.  But we’ll remain braced for the possibility of others.  The world will never be risk-free and it will never be corruption-free, just as it will never be free of other kinds of crime.”

As described here, Unaoil appears not to be the only instance in which Trace’s due diligence has been an issue.

The above is not necessarily a dig at Trace’s process. Conducting due diligence is of course not perfect and on some level due diligence providers need to trust information that may be provided to them unless red flags suggest that the information is false, misleading or in question.

Yet, the Trace International piece of the puzzle in the Unaoil matter does call into question the value of various certifications / seals of approval / whatever you want to call it offered by private business entities and perhaps raises the question of whether they represent a false sense of security to others dealing with the “certified” entity. For instance, the DOJ’s charging documents reference approximately 25 other companies caught up in the Unaoil matter. Did any of these companies rely on Unaoil’s Trace certification in doing business with Unaoil?

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