Important About Anti-corruption Due Diligence for Business

The Importance of Understanding Anti-corruption Laws – Do Your Due Diligence to Avoid Corruption Charges

The importance of understanding anti-corruption laws is essential in today’s challenging and constantly changing business environment. Corruption comes with consequences. Some of which can be dire and that is the last thing you want to be dealing with as a business owner.

Companies which have gone global need to constantly be alert of such practices which could severely harm their business. For the reason that corruption could severely affect the company’s reputation.

To avoid falling victim to corruption scandals, companies need to make a commitment to constantly be cautious. Also, they should put a stop to these crimes before they happen. Some examples of corruption include:

• Falsifying records to cover up a bribery

• Giving gifts to procurement managers or bosses to push decisions in their favor

• Making unauthorized payments in order to win

Anti-corruption laws are aggressively enforced on a global basis. Investors need to be familiar with the corruptions laws of the country before embarking on a new business venture by doing their due diligence.

Two Main Areas of Focus for Anti-corruption Laws

• Anti-bribery. It is not acceptable to bribe government or private sector employees. It is illegal to bribe or to be bribed. You must not offer to pay, promise or receive anything that is of value either directly or indirectly because this constitutes bribery. Accepting a bribe is also not acceptable under any circumstances.

• Books, records, and controls. Referring to these things is an easy way for authorities to record and carry out prosecutions for anti-corruption laws should the need arise. Corruption charges could happen if the company if found guilty of falsifying records. These records include travel and expense reports, mergers and acquisitions reports, and policies and procedure reports.

Anti-corruption laws come into effect whenever you’re trying to do a deal or to win business. Any improper advantage received during a business agreement is not allowed and you could be liable if charged with corruption.

How to Know if Your Company is at Risk of Corruption Charges

Understanding corruption charges and the red flag warnings that may pop up is a great way to ensure that your company is playing by the rules as it should.

Some common warning red flags include

• Past misconduct

• Refusal to sign an anti-corruption certificate

• Lack of transparency in expenses

• Offshore payment requests

• Cash payment requests

• False statements

• Hidden financial interests

How to Do Your Due Diligence for Red Flags to Avoid Corruption Charges

Once you suspect a red flag is happening within your business, you will be required to report your findings and get legal consultation on the matter. You need to do your due diligence by determining it is, in fact, a red flag and verify the information you have before you decide how to proceed with it.

Remember, if you don’t have the proper documentation and proof or a valid business reason why something needed to be done, it is best to stay away or not do it at all to avoid corruption charges.