It is 2016 (almost). We all have heard about corruption – outrageous tales of money changing hands to enable access to new markets in under-regulated parts of the world, or payments for access to foreign ports, expediting the customs process. Perhaps the “ask” is more subtle, such as a large donation to the favorite charitable organization of a high-ranking government official in a faraway (but much coveted) market. In your own company, these practices – once, possibly, business as usual – are now prohibited by an anti-corruption compliance program and, more importantly, the law.
But, what is the state of compliance within the company that your company is looking to acquire? Are you considering the Foreign Corrupt Practices Act (FCPA) during due diligence? Are you investigating the relationships and business dealings of the target company as if they were your own? How much diligence is due?
The answers to these questions are fact-dependent. But, they are critical. The government will hold your
company (and, potentially, you personally) accountable for the conduct of the company you are acquiring. Consequently, as the due diligence checklists are being drafted, minimally consider whether the target company has operations abroad. If it does, then consider asking a host of other questions.
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