Doing Due Diligence Pays Off
Proper due-diligence and carefully looking at the suspicious activity could help in the uncovering of potential corruption and bribery acts. This is why companies have procedures and policies in place, in order to avoid potential financial loss due to Securities and Exchange Commission Fines and legal investigations. As companies begin to explore other financial opportunities, particularly overseas, companies open the door to possible acts of bribery and corruption. All industries experience this type of risk and all should have measures in place in order to safe guard themselves from possible risk. Taking the Commonwealth Bank incident, involving a U.S. national, who is a an executive within the IT department, we see how taking measures and notice to any irregular activity could be a precursor to possible corruption or bribery activity. Richard Cassin of the FCPA Blog website describes how Commonweath Bank’s internal measures, of “detecting suspicious U.S. dollar deposits” was the reason for uncovering the serious violations.
“Australia police started their investigation after receiving a report from Commonwealth Bank. It had detected suspicious U.S. dollar deposits from a shell company in the United States into an account at the bank controlled by one of the suspects, ABC News said”
Although Commonwealth Bank was able to uncover this activity due to its own efforts; many companies run the risk of not being able to track, monitor, and identify these possible points of entry, where corruption and bribery can enter into their organization. It also becomes a problem when policies are put in place but companies neglect to include any 3rd party partners they are working with. As history has shown, the SEC and DOJ are quickly putting the liability of any corruption act, whether from within the organization or outside, on the shoulders of the main operating company.
Interestingly, finding cost effective solutions has been a point of conversation for many companies, especially as they begin to expand. The benefit for expanding operations globally is high, but so is the cost of being compliant. For companies that are looking to get started or improve their existing compliance program, Source Intelligence powered by CREATe has compiled a reference guide to assist in understanding the FCPA and OECD framework based on our 7 key categories for a complete anti-corruption program. Click here to review.